The Growing Popularity of IT Outsourcing in 2024

 6 May 2024, 2:42pm

Research and Markets / ResearchAndMarkets.com

IT Outsourcing Market Growth and Key Trends

The IT Outsourcing market size is expected to see strong growth in the next few years, to reach $171.5 billion in 2028 at a compound annual growth rate (CAGR) of 7.4%. The anticipated growth in the forecast period can be linked to factors such as the prevalence of remote work and virtualization, concerns related to data privacy and compliance, integration of AI and automation, adoption of agile development practices, and a heightened focus on customer experience.

The IT Outsourcing market size is expected to see strong growth in the next few years, to reach $171.5 billion in 2028 at a compound annual growth rate (CAGR) of 7.4%. The anticipated growth in the forecast period can be linked to factors such as the prevalence of remote work and virtualization, concerns related to data privacy and compliance, integration of AI and automation, adoption of agile development practices, and a heightened focus on customer experience.

Key trends expected in the forecast period encompass an increasing demand for IT services, the imperative for cost savings, the growing complexity of IT systems, the ongoing trend of digital transformation, the prominence of cloud computing, and an escalated emphasis on cybersecurity.

Sector-Specific Impacts and Innovations in IT Outsourcing

The anticipated surge in the adoption of cloud services is expected to drive the growth of the IT Outsourcing market in the future. Cloud services amalgamate computation, storage, and network infrastructure to facilitate swift application development and dynamic scaling. The increasing prevalence of IT Outsourcing allows access to broader global markets. These IT Outsourcing functionalities ensure scalability, facilitate easier access to subject matter experts, reduce costs, and enable the allocation of resources to core business development.

For instance, the 2022 State of DevOps Report by Google, a US-based technology company, revealed that in 2022, 26% of users reported using multiple public clouds, up from 21% in 2021. Additionally, the utilization of hybrid clouds increased from 25% to 42.5%. Consequently, the growing adoption of cloud computing is propelling the expansion of the IT consulting market.

The rising demand in the retail and e-commerce sector is poised to propel the growth of the IT Outsourcing market. The retail industry encompasses businesses engaged in selling goods or services directly to end consumers for personal use, while e-commerce involves the online buying and selling of goods and services. Outsourcing IT services in the retail and e-commerce industry enhances operational efficiency and cost-effectiveness, provides access to skilled expertise, and improves scalability, flexibility, and adaptability. This approach can lead to faster development cycles for software and applications, reducing time-to-market for new products or features in the e-commerce space.

For example, in September 2023, according to census.gov, retail trade sales increased by 0.6% from July 2023 and by 1.6% from 2022. Moreover, in August 2023, the estimate for e-commerce in the second quarter of 2023 increased by 7.5% compared to the second quarter of 2022. Overall retail sales increased by 0.6%, with 15.4% of all sales in the second quarter of 2023 made through online stores. Thus, the increasing demand in the retail and e-commerce industry is driving the growth of the IT Outsourcing market.