According to the latest market research study released by Technavio, the global engineering services outsourcing market is expected to grow at a CAGR of almost 26% during the forecast period 2016-2020.
This market research report by Technavio provides an in-depth analysis of the market in terms of revenue and emerging market trends. The report also includes an up-to-date analysis and forecasts for various market segments and all geographical regions.
Click here to request a free sample of this report
Technavio research analysts categorize the global engineering services outsourcing market based on end-users:
Global engineering services outsourcing market shares by end-users 2015
|
Automotive |
27.4% |
|
Consumer electronics |
15.9% |
|
Telecom |
13.1% |
|
Others |
12.0% |
|
Semiconductors |
10.3% |
|
Aerospace |
8.6% |
|
Medical devices |
6.5% |
|
Construction |
6.2% |
Source: Technavio
The top four revenue contributing end-user segments are discussed below:
Automotive
In 2015, the automotive industry occupied the maximum share of around 27% in the global engineering services outsourcing market. In the automotive industry, there is a prevalence of strict regulations on emissions and efficiency, increasing the demand for passenger safety. It becomes important as smaller cars are required to meet the same safety standards as those of large cars. Vendors are competing globally with a decreasing number of vehicle platforms but a growing number of niche models and derivatives.
“The services that are mainly outsourced in the automotive industry include hardware, compliance testing, embedded software engineering, and mechanical engineering. Several companies have outsourced their engineering tasks to emerging countries such as India. They are expanding to stay ahead, reduce the fixed R&D capacity costs, increase flexibility in their operations, and sustain competition,” says Amit Sharma, a lead analyst at Technavio for research on IT professional services.
The increasing number of new products or variants such as car electronics, electric cars, and telematics will lead to further growth in demand for engineering services in this segment.
Consumer electronics
The consumer electronics industry is getting competitive with the demographic profile of buyers, emerging market needs, rapidly changing technology, rapid obsolesce of products, and the fluctuating input costs. The consumer electronics industry is undergoing innovations and increased technology adoption due to the reduced product cycles, the need for better margins, and changing customer expectations. With the arrival of cloud services and the availability of online content, consumers prefer on-demand services such as content on-demand and playing games. This has prompted most of the consumer electronics company to invest on digital platforms. There is also a strong demand from America towards the ER&D services for consumer electronics, and the projects are contracted to service providers in India and parts of Europe.
Telecom
Several companies in the telecom industry outsource their engineering services to emerging countries such as China and India. The industry is growing at a rapid rate, and some of the factors backing this growth are digitalization, cloud computing, mobility, convergence, and social media. The ESO services in the telecom industry include the services pertaining to interoperability,PLC management, technologies empowerment, migration, unified communications, VoIP and IMS, virtualization. The outsourced R&D services for the telecom industry include hardware, software, manufacturing and compliance testing.
Aerospace
The demand for aircraft is directly proportional to air travel, which is linked to the economic wealth of the countries. Globalization and the increase in international trade are some of the major factors pushing the growth of the aviation industry. The increasing maintenance cost, constant investments in aerospace engineering and aviation, the need for customer satisfaction, and aerospace maintenance are driving the outsourcing of engineering services. Several aerospace manufacturing companies are outsourcing their ER&D needs to India due to the proven capabilities of vendors operating out of India and to provide better value and maintain their cost structures. The outsourcing also helps in delivering key end results such as better process planning and reduced cycle time.
The top leading vendors operating in the global engineering services outsourcing market are:
- HCL Technologies
- Infosys
- TCS
- Tech Mahindra
- Wipro
Other prominent vendors in the market include Luxoft, Cyient, Tata Elxsi, QuEST Global, Symphony Teleca, Aricent, Mindtree, Tech Mahindra, GlobalLogic, and Xchanging.
A more detailed analysis is available in the Technavio report titled, ‘Global Engineering Services Outsourcing Market 2016-2020’. Technavio also customizes reports by other regions and specific segments upon request.
Other related reports:
- Global Product Engineering Services Market 2016-2020
- Global Technical Support Outsourcing Market 2016-2020
- Global Payroll Outsourcing Market 2016-2020
To read more press releases- click here.
For any assistance or query, please contact our media team at:
media@technavio.com
US: +1 630 333 9501
UK: +44 208 123 1770
www.technavio.com
