DUBLIN--(BUSINESS WIRE)--The "IT Outsourcing Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" report has been added to ResearchAndMarkets.com's offering.
The global IT outsourcing market was valued at USD 318.5 billion in 2020, and it is expected to reach USD 425.19 billion by 2026, registering a CAGR of 4.5%, during the forecast period (2021 - 2026).
With digital transformation, organizations have become dependent on the success of creative applications and extensions that IT could provide. More certainly, IT has become a key competitive edge for most of the organization.
With the increasing cloud migrations and options of cloud services, IT outsourcing has become more than a simple cost reduction technique. Therefore, this new form is driven by organizational motivations in terms of business growth, customer experience, and competitive disruption.
More importantly, such increased preference amongst the newer and even smaller organizations has led the vendors of the market to increasingly focus on driving out a way to integrate the offshore team with the on-site. Another critical aspect driven by small-scale players is toward agility in vendors offering refers to the time-to-market.
For instance, as of Nov 2019, Atos announced a Digital Hybrid Cloud offering with VMware to enable businesses to accelerate time-to-market and reduce costs. The company addresses the businesses that need an agile, scalable yet securer digital infrastructure. Such aspects throughout its multi-cloud offerings led the small scalers to be able to grow and bring both innovation and flexibility together.
With the onset of Coronavirus (COVID-19), the vulnerability of supply chains has been exposed. For most IT organizations, a fragile ecosystem included providers of critical IT services. In addition, work-from-home mandates have led the service providers to ensure that mission-critical enterprise customers have the necessary tools and technologies to enable the speed, security, quality, and overall efficacy of services provided.
Key Market Trends
BFSI Segment is Expected to Hold Significant Market Share
- Financial organizations are increasingly outsourcing their processes and services to third parties. Banks can outsource everything from mailing campaigns to payment processing. Without a robust and comprehensive in-house IT department or trusted outside partner, banks have a little chance to survive and attract customers.
- Modern customers need more personalized and streamlined access to banks' services. IT outsourcing vendors can handle the migration to omnichannel platforms that provide easy access from any device. Moreover, such platforms facilitate real-time data collection and analysis so that financial institutions can improve customers' experience. Hence such developments are driving IT outsourcing in the banks.
- The market is witnessing an increase in outsourcing contracts, thereby boosting the market's growth positively. In 2019, IT services company Wipro announced that it had bagged an IT outsourcing contract worth around USD 300 million from ICICI Bank under which it would offer a comprehensive suite of services to the lender.
India is Expected to Hold a Significant Market Share
- India has been considered as one of the most mature global IT outsourcing destinations with a wide range of options. The country has been working in this direction for more than 25 years and has maintained its dominance among the top IT outsourcing destinations since then.
- With the demand for skilled software developers on the rise, IT outsourcing companies based out of the country are rapidly expanding their operations all over the world. The cost factor and talented skill pool have played a key role in assuring the dominance of the country in the market. This has also led to the average developer hourly rate in India to hover around USD 30.
- As per Tholons Services Globalization Index 2019, each year, more than 120,000 IT specialists graduate from the country's tech universities. This has further fueled the establishment of IT outsourcing destinations in the country, namely Bangalore and Hyderabad. These hubs offer high-end skills, yet they are still less expensive than similar destinations across the world. This has also enabled India to be in a position to further ask for higher prices in future, due to huge dependence of foreign organizations on the same.
Competitive Landscape
IT Outsourcing Market is highly competitive owing to the presence of multiple vendors in the market providing IT services to the domestic and the international markets. The market appears to be moderately fragmented with the major vendors in the market adopting strategies mergers and acquisitions, strategic partnerships among others in order to expand their reach and stay competitive in the market.
Some of the major players in the market are IBM Corporation, Accenture PLC, Infosys Limited, Tata Consultancy Services Limited among others.
MARKET DYNAMICS
Market Drivers
- Growing Demand for Efficiency and Scalable IT Infrastructure
- Organization are Increasingly Focusing on IT as a Means to Gain Differentiation by Relying on Outsourced Vendors
- Ongoing Migration Towards the Cloud and Adoption of Virtualized Infrastructure
Market Challenges
- Fragmented Nature of the Market And Growing Incidence of Data Breaches
Companies Mentioned
- IBM Corporation
- DXC Technologies
- Accenture PLC
- NTT Corporation
- Infosys Limited
- Tata Consultancy Services
- Cognizant Technology Solutions Corporation
- Capgemini SE
- Wipro Limited
- Andela Inc.
- WNS Global Services
- Pointwest Technologies
- ATOS SE
- Amadeus IT Group
- Specialist Computer Centres (SCC)
- HCL Technologies Ltd.
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