IT outsourcing to hit $288B in 2013

IT outsourcing to hit $288B in 2013

Summary: The global IT outsourcing market is expected to hit US$288 billion this year, with Asia-Pacific, Latin America, and Great China markets growing more than 13 percent, Gartner numbers reveal.


The global IT outsourcing market is expected to hit US$288 billion this year, with emerging Asia-Pacific, Latin America, and Great China markets growing more than 13 percent. 

In a report released Wednesday, Gartner said IT outsourcing spend this year will grow 2.8 percent in U.S. dollar, and 5.1 percent in constant currency, with all segments forecasted to grow more slowly in 2013. 

Bryan Britz, research vice president at Gartner, said in the statement: "We continue to see overall market growth being constrained by near-term market factors, such as evolving IT outsourcing delivery models, economic, political and labor conditions, and service provider financial performance. Mature Asia-Pacific and Western Europe are the regions where the outlook is most tempered, partly due to currency but also reflective of our view 2013 is likely to be similar to 2012 in these regions."

The research firm adjusted its 2014 forecasts upward for custom application outsourcing and infrastructure utility services. Software-as-a-service is excluded from its outsourcing numbers. 

Britz noted that while planned adoption of IT outsourcing remained positive across all segments, growth potential will be limited due to tighter IT budgets, evolving outsourcing delivery model, economic conditions, and cost-focused buyers. 

"Enterprise buyers pursuing hybrid IT strategies, and small and midsize business buyers adopting infrastructure as a service (IaaS), are key drivers in cloud and datacenter service segment growth rates," he explained. "The global market size for datacenter outsourcing is in gradual decline due to workloads moving to IaaS and to infrastructure utility services exceeding the net-new adoption of datacenter outsourcing." 

Gartner also noted a more tempered outlook for end-user outsourcing compared to past quarters due to growth in purchases related to bring-your-own-device (BYOD) and reduced business support requirements for end-user devices. The research firm said outsourced support for mobile end-user devices will see strong growth through to 2017, fueled by growing business adoption of mobile devices.

IT outsourcing markets in the Asia-Pacific, Latin America, and Greater China regions will climb over 13 percent this year and next, bolstered by multinational corporations expanding into these markets and positive economic conditions, Gartner said. 

Growth in key emerging Asia-Pacific economies will be further driven by the Association of Southeast Asian Nations' (Asean) goal to form a common regional market by 2015. This initiative aims to eliminate inter-nation tariffs in Asean, hence, stimulating more trade between nations. 

Efforts will also push the region's IT infrastructure buildout, with IT outsourcing services growing in tandem to support this. 

Gartner singled out China, which will see high growth rates as multinational corporations gain traction in the local market. The research added that Chinese enterprises were increasingly adopting end-user-oriented services such as] helpdesk or desktop services.

"In fact, the Chinese government is planning to implement incentive policies to encourage government entities and state-owned enterprises to outsource parts of their IT work to external service providers, which will help them focus on their core competence," it said. "This will also help create a more attractive market for service providers, which will in turn enhance supply-side drivers to fuel aggressive sales behaviors in the country."

Topics: Outsourcing, IT Priorities


Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently a freelance blogger and content specialist based in Singapore, she has over 16 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings.

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  • Outsourcing = mortgaging the future for short term gain

    I am astounded that anyone with an IQ above 90 thinks outsourcing is a good idea. If you outsource IT jobs, for example, then what incentive is there for the next generation to study IT? None - because there'll be no job prospects. So in one or two generations, it will no longer be possible to reverse the outsourcing because the skills will have been lost and the country/organization which now has all the IT jobs will be able to increase prices as much as it likes because there will no longer be any home-grown competition. This argument applies to all industries. For example Britain has outsourced its coal mining so all coal has to be imported and Britain has to pay the going rate. Or am I wrong?
    • Re: Outsourcing = mortgaging the future for short term gain

      Totally wrong! When outsourcing is done correctly it adds both long-term expertise and value to any enterprise, including IT. As the basic adage goes: "Do what you do best and outsource the rest!" In other words, companies should stick to their core areas of excellence and partner with the experts for their non-core requirements. Outsourcing can maximize the efficiency of a company's resources—people, time, money and energy—because it can can focus on the primary purpose of the business. Meanwhile other companies with different primary purposes and skill sets (e.g., accounting, human resources or IT) can do what THEY do best. It’s a win-win situation for all.
      Kate Vitasek