IT Outsourcing Software Development Statistics for 2021

“The value of IT services outsourced by businesses could exceed $413.72 billion by the end of 2021, according to Statista.”

The IT outsourcing market’s value is expected to grow by around 5 percent annually between 2020 and 2024, says the Global Industry Analytics report.

Talent shortages are a critical long-term trend that has driven the IT outsourcing sector’s growth over the past decade. As a result, tech companies are increasingly relying on hiring professional developers and purchasing managed services.

Statistics on the IT outsourcing industry’s technology talent shortage in 2021.

The gap of 1.4 million technology jobs (US labor statistics) and only 400,000 QC graduates in 2020 will result in an unrealized loss of $162 billion in 2021.

There will be 40 million unfilled high-tech jobs worldwide in 2020 and 85.2 million in 2030. This skills shortage will cost companies around the world $8.4 trillion in lost revenue over ten years.

According to a McKinsey study, 87% of companies are already suffering from a skills shortage.

In Sweden alone, it is predicted that there will be a shortage of 70,000 creative and skilled workers in the digital sector by 2022.

Israel, one of the three most high-tech countries globally, has a 15% shortage of software developers.

Technology outsourcing trends in 2021.

AI, IoT, and robotic process automation.

Statistics show that by 2021, more than 2.14 billion people worldwide will be buying services and goods online.

By 2021, 22% of all retail sales are expected to be online, up from around 14.1% in 2019. Nasdaq goes further and predicts that by 2024, around 95% of retail purchases will be online.

This statistic only confirms that efforts to transform online businesses technologically will focus on making online shopping more convenient. And companies with an online presence are likely to invest heavily in building a world-class online shopping platform.

But they’ll have to do it soon, because

1. Amazon already accounts for 38.7% of total e-commerce sales in the US.
2. By 2021, around 40% of businesses plan to use virtual assistants.
3. More than 47% are expected to use chatbots to improve customer service.
4. Technology Gap Statistics for the IT Outsourcing Industry in 2021.
5. The gap of 1.4 million tech jobs (US labor statistics) and only 400,000 QC graduates in 2020 will result in an unrealized loss of $162 billion in 2021

There will be 40 million unfilled technical jobs in 2020 and a projected shortfall of 85.2 million jobs in 2030. Over that decade, the skills shortage will cost companies worldwide $8.4 trillion in lost revenue.

Growth of cloud services

Cloud computing is currently worth $180 billion globally, and by 2021 alone, SaaS is expected to be worth $113.1 billion.

The PaaS, SaaS, and IaaS markets are growing at a rate of 24% per year and, in two years, the global cloud computing market will be $623.3 billion.

Of course, moving to the cloud is complicated and costly, but more and more companies consider moving off-premise storage to the cloud.

Cloud computing enables the modernization of business processes through better data protection, faster data transactions, and seamless deployment of various business applications.

The global quantum computing market is expected to be worth $8 billion by 2027. This describes why we see more and more companies like Alibaba and Samsung testing theories generated by quantum computers in real life.

5G networks will cause massive disruption in 2021.

By the end of 2020, just one year after its global launch, the global 5G services market’s value is estimated at $41.48 billion.

Due to the enormous success and widespread adoption of 5G connectivity, analysts have concluded that the 5G industry will expand at a compound annual growth rate (CAGR) of 43.9% between 2021 and 2027.

Why will 5G be one of the world’s biggest industries?

The two main selling points of 5G are the number of 5G-connected devices and data tariffs, which will generate $47.4 billion in revenue by 2027.

5G Outsourcing Trends Top IT Outsourcing Trends for 2021

5G — Top IT outsourcing trends for 2021.

Statista’s forecast of the number of 5G connections worldwide by region from 2021 to 2025 will widely deploy 5G in China and North America by 2021.

Information technology, telecommunications, and manufacturing are the top three digital industries in 5G adoption.

With 5G, companies will develop robust Internet of Things systems that connect manufacturing, transportation, and other structures, making business processes more efficient and effective.

Artificial Intelligence Statistics 2021. Deep learning, AI chatbots, robotic process automation

Statista, the global artificial intelligence market expects to be worth $15 trillion in 10 years, and the US AI market alone expects to generate $22.59 trillion in revenue by 2021.

IBM, Samsung, and Microsoft are significant investors in AI companies around the world. Tech companies looking for seamless but affordable customer service are turning to AI-powered chatbots and robotic automation.

The areas of customer service where AI currently uses are bots and virtual customer assistants.

1. More than 23%, or one in four customer service organizations, currently use AI-powered chatbots.
2. Analysts predict that AI-powered chatbots will facilitate 90% of customer interactions by 2022.
3. Nearly 60% of millennials say they are satisfied with the help of chatbots in the buying process.

Cybersecurity

Zion Market Research predicts that the cybersecurity market will be worth US$181.77 billion by 2021. By 2022, the cybersecurity market is expected to reach US$20 billion.

Currently, technology companies are virtually forced to work remotely and, without adequate cybersecurity capabilities, they become perfect targets for cyber attacks.

According to HLB’s Cybersecurity 2020 report, 65% of UK technology companies have suffered security breaches or compromised during the closure phase.

Experts estimate the value of personal data stolen from social media users at $630 million a year.

On a positive note, the HLB report shows that 55% of the companies surveyed plan to spend more on cybersecurity by 2021.

Key cybersecurity statistics from the HLB Cybersecurity Report :

1. 55% of respondents say they plan to reduce their cybersecurity spending with COVID-19.
2. 51% plan to hire a full-time cybersecurity team by 2021.
3. 42% are satisfied with the quality of the cybersecurity services they receive and get the best value for their cybersecurity spending.
4. More than 25 percent intend to reduce cybersecurity budgets.
5. Only 13% will not change their cybersecurity budget.
6. While cybercrime is causing significant damage in the corporate sector, cyber-attacks are increasingly targeting governments. This makes governments the most prominent investors in cybersecurity.

Telework Statistics — Trends in IT Outsourcing in 2021.

According to the World Economic Forum, the number of permanent teleworkers will double by 2021.

Like many other high-income industries, the IT sector switched to teleworking after the emergence of the COVID-19 pandemic.

But even before the pandemic, most technology companies in popular outsourcing destinations such as Ukraine were teleworking.

An Avasant report shows that medium-sized technology companies will be the most significant contributors to the IT outsourcing sector’s growth by 2020.

It also indicates that middle-market companies’ average outsourcing rate has increased from 9.1 percent to 11.8 percent.

Thus, while some technology companies have increased their IT budgets on the brink, others have continued to work with their nearshore and offshore IT outsourcing partners to reduce development costs.

Despite this stalemate, the overall IT budget fell from 12.7% in 2019 to 13.6% in 2020.

The trend shows that medium-sized technology companies are on the verge of reducing their corporate structure to serve the business.

According to Avasant, managed services are used to reduce management costs, and the cloud is helping to reduce physical infrastructure.

The most outsourced IT functions in 2021.

IT support, data center operations, help desk, and network operations are the four least outsourced IT functions in 2021. Let’s delve deeper into Avasant’s statistical report on IT outsourcing:

1. Application development is one of the most outsourced IT functions in 2021, with more than 60% of technology companies outsourcing at least some of their application development.
2. The volume of network operations decreases in IT outsourcing, from 34% in 2019 to 27% in 2021.
3. About 55% of those surveyed said they would increase their budget for outsourcing cybersecurity functions.
4. Forecast for the technology industry in 2021.
5. Companies are likely to continue to outsource work in 2021 to reduce operational costs, focus on core competencies and hire high-level experts.

Risk sharing and increased engagement are the new aspects of outsourcing that we will see in 2021. Next year, the emerging IT outsourcing market in Eastern Europe will grow. The world of technology will explode with the automation of robotic processes and AI-based customer service.

AI and AR/VR technologies will stimulate sufficient growth in financial technologies, telecommunications, and healthcare.