EMEA tops world’s largest outsourcing market, to hit $76b

Ericsson leads in 2015 ranking 

Europe, Middle East, Africa (EMEA) remained the world’s largest outsourcing and managed services market in 2015 and is expected to do so through at least 2020.

The market is now expected to reach $76 billion by 2020, growing at a compound annual growth rate (CAGR) of two per cent.

According to IHS Technology, in a new report made available to The Guardian, the market will be driven by mobile network outsourcing deals as more and more telecommunications operators try to keep their operational expenditure (opex) under control by removing non-core task and focusing on customers’ experience and information and communications technology (ICT) business, as well as network transformation that requires a merger of IT and telecom network teams.

The report noted that Swedish telecom gear maker Ericsson retained its lead in telecom outsourcing revenue market share in 2015, followed by Huawei, HPE, IBM and Nokia Networks, even as the global outsourcing services revenue went up three per cent on a yearly basis to $69 billion.

The report said that service providers’ unabated need to outsource non-core tasks led global outsourcing services revenue to increase three per cent. However, this slow growth is the result of a combination of musical chairs between the traditional telecoms vendor club, which includes Ericsson, Huawei and Nokia, big IT players such as IBM and Hewlett Packard Enterprise, and the execution of existing large contracts in the absence of new ones.

Ericsson and Huawei reported double-digit year-over-year revenue growth in managed services in 2015, while IBM and HPE saw declining revenue.

The report said that network maintenance, build, planning and design made up 52 per cent of carrier outsourcing revenue in 2015.