Market Insights Technology IT Services IT Outsourcing

Application Outsourcing - Germany

Germany

Revenue in the Application Outsourcing market is projected to reach €6.17bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 0.58%, resulting in a market volume of €6.35bn by 2029.
The average Spend per Employee in the Application Outsourcing market is projected to reach €135.30 in 2024.
In global comparison, most revenue will be generated in the United States (€39,740.00m in 2024).

Key regions: Brazil, Germany, United Kingdom, Netherlands, China

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Analyst Opinion

Germany is a leading destination for outsourcing services, including application outsourcing. The Application Outsourcing market in Germany is driven by a variety of factors, including customer preferences, local special circumstances, and underlying macroeconomic factors.

Customer preferences: German companies prefer outsourcing their non-core business functions, including application development and maintenance, to focus on their core competencies. Outsourcing helps them reduce costs and increase efficiency. Additionally, German companies prefer to work with outsourcing providers who have a deep understanding of their business and can provide customized solutions.

Trends in the market: The Application Outsourcing market in Germany is witnessing several trends. Firstly, there is a growing demand for cloud-based application outsourcing services as companies seek to reduce their IT infrastructure costs. Secondly, there is an increasing demand for application outsourcing services in the areas of digital transformation, such as mobile app development and data analytics. Finally, there is a trend towards nearshoring, as German companies prefer to work with outsourcing providers located in nearby countries to ensure cultural and language compatibility.

Local special circumstances: Germany has a highly skilled workforce and a strong education system, which has led to the development of a highly sophisticated IT industry. Additionally, Germany has a large number of small and medium-sized enterprises (SMEs), which are increasingly outsourcing their IT functions to improve their competitiveness. Moreover, the country has a strong regulatory environment, which ensures data privacy and security.

Underlying macroeconomic factors: Germany is the largest economy in Europe and has a stable political environment, making it an attractive destination for outsourcing services. Moreover, the country has a highly developed infrastructure, including a reliable telecommunications network and world-class transportation system. Finally, the German government is supportive of outsourcing services and has implemented policies to encourage foreign investment in the country.

Methodology

Data coverage:

The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.