IT Outsourcing - Canada

Canada

Revenue in the IT Outsourcing market is projected to reach US$11.76bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 8.53%, resulting in a market volume of US$17.71bn by 2029.
The average Spend per Employee in the IT Outsourcing market is projected to reach US$539.80 in 2024.
In global comparison, most revenue will be generated in the United States (US$197.30bn in 2024).

Key regions: Netherlands, United States, Japan, Germany, Italy

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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Market

Region

Region comparison

Currency

Analyst Opinion

Canada, known for its vast natural resources and diverse economy, has been experiencing a steady growth in the IT Outsourcing market. With a highly skilled workforce and a stable political environment, Canada has been able to attract global companies to outsource their IT operations to the country.

Customer preferences: Canadian IT Outsourcing market has been driven by customer preferences, which includes cost-effectiveness, quality of services, and access to skilled workforce. Companies are looking to reduce their operational costs and increase their efficiency, which can be achieved through outsourcing their IT operations to Canada. Additionally, the country's multicultural workforce, with fluency in multiple languages, has been an attractive feature for companies looking to expand their global reach.

Trends in the market: The Canadian IT Outsourcing market has been witnessing a trend towards cloud-based services, as companies are looking to move away from traditional on-premise IT infrastructure. This trend is driven by the need for flexibility, scalability, and cost-effectiveness. The country has also been experiencing a growth in the demand for cybersecurity services, as companies are becoming increasingly aware of the importance of protecting their data from cyber threats.

Local special circumstances: One of the unique features of the Canadian IT Outsourcing market is the presence of government support and incentives. The Canadian government has been actively promoting the country's IT sector through various initiatives, such as tax breaks and grants, which has attracted global companies to invest in the country. Additionally, the country's proximity to the United States has made it an attractive location for American companies looking to outsource their IT operations.

Underlying macroeconomic factors: The Canadian IT Outsourcing market has been supported by the country's stable political environment, which has provided a conducive business environment for companies to operate in. The country's strong economic performance, with a GDP growth rate of 5.4% in 2021, has also been a driving factor for the growth of the IT Outsourcing market. Furthermore, the country's highly skilled workforce, with a strong emphasis on education and training, has been a key factor in attracting global companies to outsource their IT operations to Canada.

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.