IT Outsourcing - Germany

Germany

Revenue in the IT Outsourcing market is projected to reach €27.72bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 7.68%, resulting in a market volume of €40.13bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach €607.40 in 2024.
In global comparison, most revenue will be generated in the United States (€181.10bn in 2024).

Key regions: Brazil, Italy, United States, China, Germany

Definition:
The IT Outsourcing market refers to the external contracting of IT functions, services, or projects instead of relying on company-owned resources. By outsourcing IT tasks (e.g., to IT suppliers or software developers), enterprises are able to focus on their core functions and save internal resources and costs (e.g., office space, maintenance, and utilities). Thus, outsourcing teams becomes a viable cost resilience strategy in an environment where companies are looking to save money more than ever.

In an IT context, these activities include IT administration, IT application, and web hosting services. Non-IT-related outsourcing services are excluded.

Structure:

IT Outsourcing contains four distinct markets that are based on different services:

Administration Outsourcing refers to the market for services associated with the external sourcing of typical IT administration tasks such as hardware supply, setup, configuration, maintenance, security, and support.
Application Outsourcing refers to the market for all IT application services in a software production context, spanning from requirement assessments to concept and design of software applications.
Web Hosting includes all types of internet hosting services that allow companies or individuals to provide access to their web page via the World Wide Web.
Other IT Outsourcing refers to aggregated revenues of the types of IT outsourcing that are not specifically mentioned in the other IT Outsourcing markets, such as infrastructure outsourcing, network outsourcing, and managed services.

Additional Information:

The IT Outsourcing market comprises revenues, revenue change, average spend per employee, and revenues of the outsourcing types. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by enterprises (B2B) and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed. Key players in the market include IBM, Accenture, Capgemini, NTT, and Hewlett Packard Enterprise.

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Región

Comparación de regiones

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Analyst Opinion

Germany, known for its engineering prowess and technological advancements, has been a hub for IT outsourcing for several years. The IT outsourcing market in Germany has been growing steadily over the years, driven by various factors such as customer preferences, local special circumstances, and underlying macroeconomic factors.

Customer preferences: German companies have been outsourcing IT services to reduce costs, improve efficiency, and access specialized skills. Additionally, the shortage of IT professionals in Germany has led companies to outsource IT services to countries with a large pool of skilled professionals. German companies prefer outsourcing to countries with a similar cultural and language background, which has led to the growth of IT outsourcing to Eastern Europe.

Trends in the market: The IT outsourcing market in Germany has been witnessing several trends in recent years. One of the major trends is the shift towards cloud-based outsourcing. German companies are increasingly adopting cloud-based outsourcing to reduce costs and improve flexibility. Another trend is the rise of nearshoring, where German companies are outsourcing IT services to nearby countries such as Poland, the Czech Republic, and Hungary. This trend is driven by the need to reduce costs while maintaining proximity to the outsourced services.

Local special circumstances: The German IT outsourcing market is unique in many ways. One of the major factors is the strict data protection laws in Germany. German companies are required to comply with the strict data protection laws, which has led to the growth of IT outsourcing to countries within the European Union. Additionally, German companies prefer outsourcing to countries with a similar cultural and language background, which has led to the growth of IT outsourcing to Eastern Europe.

Underlying macroeconomic factors: The growth of the IT outsourcing market in Germany is driven by various macroeconomic factors. Germany has a highly skilled workforce, which has led to the growth of IT outsourcing to countries with a large pool of skilled professionals. Additionally, the shortage of IT professionals in Germany has led companies to outsource IT services to countries with a large pool of skilled professionals. The strong economic growth in Germany has also led to the growth of the IT outsourcing market as companies look to reduce costs and improve efficiency.

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.