Software Outsourcing Market size was valued at USD 555.03 Billion in 2024 and is projected to reach USD 897.9 Billion by 2031, growing at a CAGR of 5.49% from 2024 to 2031.

The Software Outsourcing Market is propelled by several key drivers, including the increasing globalization of businesses seeking cost-effective solutions, access to a global talent pool, and the need for specialized expertise in various technology domains. Companies opt for software outsourcing to leverage the benefits of reduced development costs, faster time-to-market, and scalability offered by outsourcing partners.

Additionally, the rising complexity of software development projects, coupled with the growing demand for emerging technologies such as Artificial Intelligence (AI), Internet of Things (IoT), and Blockchain, drives the need for outsourcing partners with specialized skills and experience in these areas. Moreover, the trend towards digital transformation across industries further accelerates market growth, as organizations seek outsourcing partners to modernize legacy systems, develop innovative solutions, and enhance their competitive edge in the market. Furthermore, geopolitical factors, such as favorable government policies and regulations promoting outsourcing, also contribute to the expansion of the software outsourcing market.

The Software Development Outsourcing Market Report is Segmented by Service Type (media Relations, Digital and Social Media PR, Crisis Communication, Event Management, and Content Development), by End-User Industry (BFSI, Consumer Good and Retail, Government and Public Sector, Entertainment, IT & Telecom, Healthcare, Hospitality, and Food and Beverage).

As per Cognitive Market Research's latest published report, the Global Offshore Software Development Market size will be USD 1,12,609.5 Million by the end of 2030. The global Offshore Software Development Industry's Compound Annual Growth Rate will be 15.2% from 2023 to 2030.

The North America Offshore Software Development market size is projected to reach at USD 25,112.1 Million in 2028.

What is Driving Offshore Software Development Market?

Expanding IT services in every sector 

IT or the information technology sector plays a huge role in the development of any country. This sector supports to produce services maintenance and repairs, training, or consulting. IT sector plays the crucial role in small and medium enterprises (SMEs), large enterprises. Information technology services are those services used by organizations in creating, managing, and delivering information as well as assisting with other business functions. These services include consulting, software development, systems integration, deployment and support, training and education, and hosted and outsourced IT services.

Global IT services market is expected to reach 853-billion-dollar mark by 2021, up from 737 billion U.S. dollars in 2017. North America is the largest regional IT services market, accounting for almost half of the global market.

IT services are used in every sector such as banking, communications, wholesale and retail trade, all professional services such as engineering, computer software development, and medicine, non-profit economic activity, all consumer services, and all government services, including defense and administration of justice. To providing the right investment banking training and courses, the IT sector of a country plays a huge role.

According to one study, there will be over a million software companies in the world within the next 10 years. Most of them are in America and Europe. Competition is extremely high and operational costs are always climbing, and talent is getting scarcer by the day. Offshore software development services are thus, risen as a solution for Western businesses who are looking to get ahead in the crowded and expensive marketplace. This is the significant strategic move as western countries are lacking engineers and jobs has become expensive as their skills are incredibly in demand.

According to recent research conducted by Indeed, the US software job market currently faces a 472K tech talent shortage with 9 out of 10 business owners struggling to find and hire IT professionals. Offshore software development hires a dedicated software development team and opens a new office called an offshore development center in another country. Hence, the main reason companies are looking to build offshore teams and engage developers in countries like India, Singapore, because of low cost and high availability.

Growing knowledge and necessity of cybersecurity is propelling market growth

Restraints for Cryogenic Piping Market

Concerns associated with data security & protection

Opportunities for Offshore Software Development Market

Increasing demand for cutting-edge skills


Growing development in emerging economies

Introduction of Offshore Software Development:

Offshore software development is a process in which companies hire software developers located in a foreign country and their service helps the organization in resolving challenges faced in the business. The offshore software development indicates that company of providers is located in a foreign country are away from their location facing different time zone difference.

There are many benefits of using this offshore software development service which ensures unique customer experience, helps in resolving business difficulties with the best class software. The organizations are adopting the offshore software development outsourcing service due to the low-cost associated with it compared to in-house or onshore service. The company in offshore service provides high quality service offered with an affordable cost. Hence there is higher demand for the offshore software outsourcing in the market. The enterprise or other organization gets advantage in this service as they get skilled and talented team in affordable cost which is beneficial for the company growth and leverages many opportunities in their business. &n...

The size and share of the market is categorized based on Type (Outsourcing, Technology Outsourcing) and Application (Aerospace & Defense, Healthcare, Retail & C-commerce, Telecom & Media, Others) and geographical regions (North America, Europe, Asia-Pacific, South America, and Middle-East and Africa).

Software Development Outsourcing Services Market Outlook

The global software development outsourcing services market size is projected to grow from USD 92 billion in 2023 to USD 162 billion by 2032, reflecting a compound annual growth rate (CAGR) of 6.5% over the forecast period. This robust growth is fueled by the increasing need for cost-effective business solutions and the rapid advancement of technological frameworks that enable seamless outsourcing operations.

One of the primary growth factors driving the global software development outsourcing services market is the rising demand for specialized software development skills. Businesses are increasingly recognizing the cost benefits and efficiency gains of outsourcing software development to specialized firms with advanced technical capabilities. Additionally, the rising complexity of technology stacks, cybersecurity concerns, and the rapid pace of digital transformation make outsourcing an attractive option for companies seeking to stay competitive without overextending their internal resources.

Cost reduction remains a critical driver for the market. Outsourcing software development allows companies to reduce their operational expenses by leveraging the lower labor costs prevalent in developing countries. This cost-saving mechanism enables businesses to allocate more resources to core activities such as marketing, research, and development. Furthermore, outsourcing mitigates the need for substantial capital investment in infrastructure and technology, providing an economic edge to companies, particularly small and medium enterprises (SMEs).

Another significant growth factor is the increasing acceptance of remote work models, accelerated by the COVID-19 pandemic. As remote work becomes normalized, organizations are more open to collaborating with global outsourcing partners. The pandemic highlighted the feasibility and benefits of remote collaboration tools, further legitimizing the outsourcing model. Moreover, the evolution of robust project management and communication platforms ensures that outsourced teams can work seamlessly with in-house teams, reducing the barriers to effective collaboration.

The concept of Learning Services Outsourcing is gaining traction as organizations seek to enhance their workforce capabilities without the overhead of in-house training departments. By outsourcing learning services, companies can access a wide range of expertise and resources tailored to their specific needs, ensuring that their employees receive the most up-to-date and relevant training. This approach not only helps in reducing costs associated with training infrastructure but also allows businesses to focus on their core competencies while leveraging external expertise for skill development. As the demand for specialized skills continues to grow, learning services outsourcing offers a strategic advantage by providing scalable and flexible training solutions that can be customized to meet the evolving needs of the workforce.

In terms of regional outlook, Asia Pacific dominates the software development outsourcing services market, driven by countries like India, China, and the Philippines, which offer a vast pool of highly skilled IT professionals at competitive rates. North America and Europe also hold significant market shares due to their strong technological infrastructures and high demand for sophisticated software solutions. Latin America and the Middle East & Africa are emerging as promising markets due to increasing digitalization and supportive government policies.

Service Type Analysis

Application development services form a substantial segment of the software development outsourcing market. This segment includes custom software development, mobile application development, and web application development, among others. The increasing adoption of digital transformation initiatives across various industries is driving demand for these services. Businesses seek to develop innovative applications to improve customer engagement, streamline operations, and gain a competitive advantage. The rise of agile and DevOps methodologies has further accelerated the demand for outsourced application development to ensure rapid and continuous delivery of high-quality software products.

Application maintenance services are critical for ensuring the long-term functionality and performance of software applications. This segment encompasses activities su

The global Software Development Outsourcing Services market, valued at $46.29 billion in 2025, is poised for significant growth. Driven by the increasing demand for agile software development, digital transformation initiatives across industries, and the cost-effectiveness of outsourcing, the market is expected to exhibit a robust Compound Annual Growth Rate (CAGR). While the precise CAGR is not provided, considering the strong market drivers and the prevalence of outsourcing in the tech industry, a conservative estimate would place the CAGR in the range of 8-12% over the forecast period (2025-2033). Key segments like Healthcare, Aerospace & Defense, and Retail & E-commerce are experiencing rapid growth fueled by their increasing reliance on sophisticated software solutions and data-driven strategies. Technological advancements in areas like AI, cloud computing, and DevOps are further accelerating market expansion. The outsourcing model, encompassing both technology and business process outsourcing, allows companies to focus on their core competencies while leveraging specialized expertise and resources from external providers. Major players like IBM, Accenture, Wipro, and Infosys are driving innovation and competition within this rapidly evolving landscape. Geographical distribution reveals strong market presence across North America and Europe, with significant growth potential in the Asia-Pacific region driven by India and China's expanding tech infrastructure and skilled workforce. However, challenges remain, including data security concerns, intellectual property risks, and managing potential communication barriers across geographical boundaries. Nevertheless, the long-term outlook for the Software Development Outsourcing Services market remains exceptionally positive, underpinned by sustained technological innovation and the continuous need for cost-effective and efficient software solutions across various sectors. Strategic partnerships, mergers and acquisitions, and continuous investments in emerging technologies will be critical for companies to maintain competitiveness in this dynamic market.

This statistic shows the global market size of outsourced services from 2000 to 2019. In 2019, the global outsourcing market amounted to 92.5 billion U.S. dollars.

The global outsourcing market - additional information

The revenue of the global outsourced services industry has been unsteady over the last few years. In 2016, the industry market size dropped to 76.9 billion U.S. dollars, the lowest figure seen in a decade. The largest share of revenue for this industry came from the Americas, followed by Europe, the Middle East and Africa. A much smaller share of global revenue came from the Asia Pacific region.

Outsourcing involves the contracting out of business processes to third parties, usually in order for the business to avoid certain costs, such as taxes. In 2019, business process outsourcing contributed a much smaller proportion of the industry’s global revenue than information technology outsourcing, generating 26 billion and 66.5 billion U.S. dollars respectively.

Other outsourcing segments within the global industry include business services, energy, healthcare and pharmaceuticals, retail, travel and transport, and telecom and media. In 2016, the leading driver for using outsourcing services, according to business executives, was to cut costs. Other drivers included, enabling focus on core business and solving capacity issues.

IT Outsourcing Services Market size was valued at USD 342.60 Billion in 2024 and is projected to reach USD 702.32 Billion by 2031, growing at a CAGR of 8.9% from 2024 to 2031.

Global IT Outsourcing Services Market Drivers

Cost Efficiency: Organizations are increasingly outsourcing IT operations to cut operating costs. This is especially crucial for organizations looking to increase ROI and reduce expenses. According to a Gartner analysis from August 2023, firms who focus on outsourcing to decrease expenses have experienced up to 30% savings in IT budgets.

Access to Skilled Talent: Outsourcing gives businesses access to a worldwide talent pool with specific capabilities that may not be available locally. This is critical for technical positions such as software development and cybersecurity. In September 2023, the Indian government announced plans to invest $1 billion on IT education and training, with the goal of enhancing the abilities of over 500,000 people to meet worldwide demand for IT services.

Focus on Core Business Functions: Outsourcing IT services allows firms to focus on their core business areas, increasing overall productivity and strategic focus. In October 2023, Microsoft announced a stronger cooperation with multiple outsourcing firms to manage its IT infrastructure, letting it to focus on cloud innovation and service development.

The Engineering Services Outsourcing Market estimated size and share is projected to exceed USD 49.05 billion by 2034, with a forecasted CAGR of 26.9% during the period.

The global software service outsourcing market size was valued at USD 14.06 billion in 2022 and is projected to grow at a Compound Annual Growth Rate (CAGR) of 12.6% from 2023 to 2030. This growth is attributed to the increasing adoption of cloud computing, the rising need for cost optimization, and the growing demand for specialized software services. Major driving factors include the rising adoption of digital technologies, increasing globalization, and a growing need for IT outsourcing. The increasing complexity of IT systems and the shortage of skilled IT professionals are also contributing to the growth of the market. Application segment is expected to account for the largest share of the market over the forecast period due to the increasing adoption of software services for business process automation. The types segment is expected to be dominated by the cloud-based deployment model due to its cost-effectiveness and flexibility. North America is expected to hold the largest share of the market due to the presence of a large number of software service providers and the high adoption of software services in the region. The APAC region is expected to witness the highest growth rate due to the rising adoption of software services in emerging economies such as China and India. The global software service outsourcing market has witnessed significant growth in recent years, driven by the increasing demand for cost-effective, scalable, and high-quality software development services. This report provides a comprehensive analysis of the industry, including market size, trends, key players, and growth drivers.

Global IT Management and Outsourcing Services market size 2025 was XX Million. IT Management and Outsourcing Services Industry compound annual growth rate (CAGR) will be XX% from 2025 till 2033.

The global offshore software development services market is experiencing robust growth, driven by the increasing demand for cost-effective and efficient software solutions across diverse industries. The market, estimated at $200 billion in 2025, is projected to exhibit a Compound Annual Growth Rate (CAGR) of 12% from 2025 to 2033, reaching an estimated $600 billion by 2033. This significant expansion is fueled by several key factors. The rising adoption of cloud-based technologies and agile development methodologies enables businesses to outsource software development tasks seamlessly and efficiently. Furthermore, the growing availability of skilled developers in offshore locations, coupled with favorable government policies and incentives in many developing countries, further enhances the appeal of offshore development. The increasing prevalence of digital transformation initiatives across various sectors, including healthcare, finance, and e-commerce, is a major catalyst for market growth. Businesses are increasingly outsourcing non-core functions like software development to focus on their core competencies, driving demand for offshore services. Specific segments experiencing robust growth include custom software development and mobile application development for both SMEs and large enterprises. While the market faces challenges like data security concerns and potential communication barriers, its inherent advantages of cost savings and access to a global talent pool are expected to outweigh these obstacles, sustaining the high growth trajectory. The market segmentation reveals a strong preference for custom software development solutions, reflecting the unique needs of businesses across different industries. Mobile software development is also a significant contributor, driven by the ubiquitous adoption of smartphones and mobile applications. North America and Europe currently dominate the market share, but Asia-Pacific is emerging as a rapidly growing region, thanks to the significant presence of skilled developers and rapidly expanding technology sectors in countries like India and China. Competition within the market is intense, with a wide range of established and emerging players vying for market share. Companies are focusing on innovation, specialized expertise, and enhanced customer service to stay ahead of the competition. This dynamic landscape promises continuous market evolution, driven by technological advancements and shifts in business priorities.

Aerospace Engineering Services Outsourcing Market size was $USD 78.14 billion in 2022 and is grow to $312.55 billion by 2030 with a CAGR of 18.92%.

DevOps Outsourcing Service Market size was valued at USD 23.9 Billion in 2023 and is projected to reach USD 71.9 Billion by 2030, growing at a CAGR of 12.9 % during the forecast period 2024-2030.

Global DevOps Outsourcing Service Market Drivers

The growth and development of the DevOps Outsourcing Service Market is attributed to certain main market drivers. These factors have a big impact on how integrated gas systems are demanded and adopted in different sectors. Several of the major market forces are as follows:

Growing the Use of DevOps Techniques: One important motivator is the growing awareness of the advantages of DevOps, including enhanced cooperation, quicker time to market, and more productivity in software development and IT operations. DevOps is being adopted by organisations more frequently in an effort to improve their entire software delivery processes.

Complexity of IT Environments: Organisations frequently go to outside expertise to successfully deploy and maintain DevOps processes as IT environments get more complicated due to a variety of technologies, platforms, and infrastructure. Businesses can take advantage of specialised skills and knowledge by outsourcing DevOps services.

Concentrate on Core Competencies: Organisations may decide to contract with outside vendors to handle DevOps tasks so that their internal teams can concentrate on their primary business responsibilities. Achieving cost-effectiveness and operational efficiency can be facilitated by outsourcing.

Globalization and scattered Teams: Outsourcing DevOps services can offer a smooth and integrated approach to managing software development and operations, given the emergence of globally scattered teams and the necessity for cooperation across geographical boundaries.

Growing Need for Cloud Services: The demand for effective DevOps techniques is being driven by the growing uptake of cloud computing services. Organisations can increase overall performance, increase scalability, and optimise their cloud infrastructure by outsourcing DevOps services.

It Outsourcing is Witnessing Significant Growth Due To Digital Transformation, Driving Businesses To Rely More On IT Services Outsourcing for A Competitive Edge. IT Support Outsourcing Has Evolved Beyond Cost-Cutting, With Cloud Services Migrations Fueling This Shift. IT Managed Services, Particularly Application Development and Maintenance, are in High Demand, With Companies Like Slack and Alibaba Capitalizing On IT Offshoring. The Market is Highly Competitive and Fragmented, With IT Contracting, It Service Management, It Business Process Outsourcing, and IT Infrastructure Outsourcing Playing Crucial Roles.

The nearshore software development services market is experiencing robust growth, driven by increasing demand for cost-effective and high-quality software solutions globally. Businesses are increasingly outsourcing software development to nearshore locations—countries geographically closer than offshore destinations—to mitigate time zone differences, communication barriers, and travel complexities. This market is projected to reach a substantial size, exhibiting a Compound Annual Growth Rate (CAGR) that reflects the strong industry momentum. Let's assume, for illustrative purposes, a 2025 market size of $15 billion and a CAGR of 12% over the forecast period (2025-2033). This growth is fueled by several key factors: the rising adoption of cloud-based technologies, the expansion of digital transformation initiatives across various industries, and a growing need for specialized software solutions tailored to specific business needs. The market segmentation reveals a significant demand across various software development types (custom software, mobile, and web development) and caters to both SMEs and large enterprises. The significant presence of numerous established and emerging players further indicates a competitive but thriving market landscape, with companies vying to deliver innovative and efficient solutions. The key market segments within nearshore software development show strong performance across the board. Custom software development remains a significant revenue driver, closely followed by mobile and web development services. Large enterprises represent a larger portion of the market due to their significant software development needs and budget allocations, while SMEs are a rapidly expanding segment showing increased outsourcing activity. Geographically, North America and Europe currently hold the largest market shares, but regions like Asia Pacific are showing impressive growth potential due to the burgeoning tech industries in countries like India and China. Challenges include finding and retaining skilled developers, ensuring data security and compliance, and effectively managing geographically distributed teams. However, these challenges are being addressed through technological advancements, improved communication tools, and robust project management strategies, further contributing to the overall market growth.

The global revenue in the 'IT Outsourcing' segment of the IT services market was forecast to continuously increase between 2024 and 2029 by in total 271.7 billion U.S. dollars (+50.22 percent). After the ninth consecutive increasing year, the indicator is estimated to reach 812.71 billion U.S. dollars and therefore a new peak in 2029. Notably, the revenue of the 'IT Outsourcing' segment of the IT services market was continuously increasing over the past years.Find more information concerning Canada and Sweden. The Statista Market Insights cover a broad range of additional markets.

The IT and BPO services market is experiencing robust growth, projected to reach $247.33 billion in 2025 and maintain a Compound Annual Growth Rate (CAGR) of 10.87% from 2025 to 2033. This expansion is driven by several key factors. Firstly, the increasing digital transformation initiatives across diverse sectors like finance, insurance, telecom, and healthcare are fueling demand for efficient and cost-effective IT and BPO solutions. Secondly, the rising adoption of cloud computing, automation, and artificial intelligence is enhancing operational efficiency and creating new opportunities for service providers. Furthermore, globalization and the need for round-the-clock support are driving businesses to outsource non-core functions to specialized BPO providers. The market is segmented by end-user industry, service type (IT services, BPM, software & R&D), and delivery model (domestic and export). While the Indian market holds significant importance, global demand contributes substantially to the overall market size. Major players like Accenture, Cognizant, Infosys, and TCS are leveraging their extensive expertise and global reach to capture significant market share. However, competitive pressures and evolving technological landscapes present both opportunities and challenges for these companies. Strategic partnerships, technological innovation, and a focus on specialized service offerings are crucial for maintaining a strong market position and mitigating industry risks. The forecast period from 2025-2033 indicates continued high growth, driven by sustained investment in digital technologies and outsourcing strategies by businesses worldwide. Specific regional growth rates will vary, but given the global nature of the IT and BPO sector, a consistent CAGR is anticipated. The segments with the highest growth potential appear to be those involving cloud-based solutions, AI-driven automation, and specialized services catering to emerging technological needs within healthcare and finance. Companies will need to adapt to these shifting trends and potentially focus on niche market segments to maintain competitiveness. This necessitates a constant adaptation to new technologies and a focus on innovation to retain a competitive edge in this rapidly evolving market.

The software market was around 8.4 billion U.S. dollars in India in 2023. Within the segments, the enterprise software generated the highest revenue at 3.5 billion U.S. dollars in 2023. This was followed by application development software, and productivity software. It was estimated that by the year 2028, the software market in India would grow to 14.4 billion dollars. IT industry in India India’s IT industry is one of the leading sectors contributing towards India’s post-liberalization economic growth. The sector is a significant employer to about three million people and also a major contributor to the Indian economy, with around 1.2 percent in financial year 1998, to about 7.5 percent in financial year 2023. At present, the IT and IT enabled services industry has three major sectors: software services, and customized software development; Business Process Outsourcing (BPO); and research and development (R&D) as well as engineering services. Applications sector The leading software segments in terms of revenue are engineering applications, collaborative applications, customer relationship management applications, enterprise resource management applications, and content workflow and management applications. Although the coronavirus pandemic had a negative impact on Indian economy including the software market, it also served as a driver for many enterprises in reevaluating their IT strategies to make steps toward digital business models.

The Japanese software outsourcing market is anticipated to grow at a CAGR of 6.9% from 2025 to 2033, reaching a market size of $2405.7 million by 2033. The growth of the market is attributed to the increasing adoption of cloud-based services, the rising demand for mobile applications, and the growing trend of digital transformation across various industries in Japan. The financial industry, manufacturing, and mobile communications sectors are the major drivers of growth in the software outsourcing market in Japan. Major companies operating in the Japanese software outsourcing market include Accenture, Hi-Think Technology (DHC), Shanghai Hyron Software, Beyondsoft, IBM, Linkage Software, Neusoft, Shanghai Chuwa Software, Pactera, HCL Technologies, Jiangsu Hoperun Software, DaLian Stone Software Co., Ltd., Chengdu Winnersolt, Rococo Co., Ltd., Sunyard System Engineering, Nanjing Liandi Information Systems. These companies offer a wide range of software outsourcing services, including application development, maintenance, testing, and consulting. The growing demand for software outsourcing services in Japan is expected to provide ample growth opportunities for these companies in the coming years.