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April 26, 2024 (07:35) | Publication: MarketLine Industry Reports
Singapore - IT Services - Competitive Landscape, April 2024
The Singaporean IT services market is characterized by a dynamic environment shaped by rapid technological advancements, evolving customer demands, and intense
competition among a diverse array of players. Global IT giants such as Accenture, IBM, Fujitsu, and HPE compete alongside regional players and niche service
providers, offering a wide range of services including software development, consulting, infrastructure management, and cloud computing. Additionally, the emergence
of disruptive technologies like artificial intelligence, blockchain, and the Internet of Things (IoT) has further intensified competition, as firms race to innovate and
differentiate their offerings. Price competition is prevalent, especially in commoditized segments, driving firms to optimize costs. Strategic partnerships and mergers
shape the landscape as companies seek expansion and differentiation. Amidst intense competition, customer focus, innovation, and agility are crucial for success in this
dynamic market.
Who are the leading players?
Accenture Plc Accenture is one of the key players in the Singaporean IT services industry. It is headquartered in Dublin, Ireland, and provides services and solutions in
strategy, consulting, digital, technology, and operations areas. In Singapore, the company operates through its subsidiaries Accenture Pte Ltd., Accenture SG Services
Pte Ltd, and others . The company operates business processes for enterprise functions such as sourcing and procurement, finance and accounting, supply chain,
marketing, and sales. The company's solutions find applications in various industries, including consumer goods, retail and travel services, banking and capital markets,
software and platforms, and industrial and life sciences. The company serves the agribusiness, automotive, banking, capital markets, retail, travel, health, chemicals,
media and technology, and communications industries. International Business Machines Corp IBM provides global hybrid cloud, AI, and consulting solutions and
services. It is headquartered in Armonk, New York, the US. In Singapore, the company operates through its subsidiaries IBM Capital Singapore Pte. Ltd, IBM
International Capital Pte Ltd, IBM Singapore Pte. Ltd., and others. Its product portfolio includes analytics, artificial intelligence, automation, blockchain, cloud
computing, IT infrastructure, IT management, cybersecurity, and software development products. It also offers services such as cloud, networking, security, technology
consulting, application services, business resilience services, and technology support services. The company classifies its business operations into five reportable
segments including software, consulting, infrastructure, financing, and other. In FY2023, the software and consulting segment contributed the highest revenue of $26.3
billion and $20.0 billion, respectively. Fujitsu Ltd Fujitsu provides a comprehensive range of technology products, solutions, and services. The company also offers
consulting services, system integration solutions, IT infrastructure management, and system products. It is headquartered in Minato-Ku, Tokyo, Japan, and offers
application, business transformation, enterprise and cybersecurity, network, and communication services. It markets products under the Fujitsu brand. In Singapore, the
company operates through its subsidiary Fujitsu Asia Pte Ltd., which was founded in 1997. Its Singapore office is located in Queenstown. The company serves various
industries, including automotive, manufacturing, retail, financial services, transport, the public sector, energy and utilities, andservice providers. Hewlett Packard
Enterprise Co HPE provides intelligent solutions and cloud-based services. It is headquartered in Spring, Texas, the US. Its service portfolio includes information
technology (IT) consulting, IT support, education and training services. In Singapore, the company operates through its subsidiaries Hewlett Packard Enterprise
Singapore Pte. Ltd, Hewlett-Packard Asia Pacific Ltd., Hewlett-Packard Singapore (Sales) Pte. Ltd., and others. HPE serves commercial and large enterprise groups,
including business and public sector enterprises, small and medium-sized businesses, financial services, healthcare, manufacturing, and telecommunications industries.
The company classifies its business operations into six reportable segments: Compute, HPC & AI, Storage, Intelligent Edge, Financial Services, Corporate Investments,
and others.
What strategies do the leading players follow?
Accenture in FY2023 made substantial investments in patents and pending patents, research and development (R&D), functional solutions, strategic acquisitions,Â
and recruiting, training, and developing personnel. Through these efforts, the company aims to improve its marketability and competitiveness. Its strategic
approach to acquisitions, which catalyzes organic expansion, is centered on growing the company in high-growth sectors, expanding industry and functional
knowledge, and acquiring new skills and capabilities. The company spent $1.3 billion on R&D, $1.1 billion on learning and professional development, and $2.5 billion
on 25 strategic acquisitions in the fiscal year 2023. It focuses on R&D activities to improve the performance of products and develop new technologies. Its R&D
capabilities enable the company to overcome technical barriers encountered in the commercialization of sophisticated consulting, technology, and outsourcing offerings
through its Accenture Research, Accenture Ventures, and Accenture Labs, Studios, and Innovation Centers, a network of more than 100 innovation hubs and delivery
centers. IBM partners with the world's leading technology enablers, which help it increase revenue and market share. By collaborating with major players such as
Adobe, Amazon Web Services (AWS), Microsoft, Oracle, Salesforce, Samsung Electronics, and SAP, it gains access to advanced technologies, expertise, and resources
across various domains, including cloud services, software solutions, and managed services. These partnerships enable the company to offer end-to-end solutions that
address complex business challenges faced by its clients, providing them with innovative and comprehensive offerings. For instance, in April 2024, IBM Cloud and
Fortinet partnered to introduce the Fortinet Virtual FortiGate Security Appliance (vFSA) on IBM Cloud. Also, the company makes R&D investments to advance the
fundamental science of several critical technologies, including AI, quantum computing, and semiconductors. In FY2023, the company incurred expenses of $6.8 billion
on research, development, and engineering (RD&E), which as a percentage of revenue, stood at 10.9%. Fujitsu aims to upgrade its customers' current IT systems with
an emphasis on cloud migration and using data and digital technology to solve management problems. It aims to improve international offers and broaden the range of
services. The company intends to enhance traditional SI business by using data and AI more effectively. In keeping with the goal, the business and Whitbread
partnered in March 2023 to improve IT services for the Premier Inn and restaurant brands. Moreover,it focuses on product development and research for bringing new
products into the market. It aims to develop advanced emerging technologies, extend its value chain globally, and create new businesses. The company focuses its R&D
resources on five technology areas including computing, AI, network, data and security, and converging technologies. Besides R&D in each technology area, it also aims
to advance technology integration so that it can provide comprehensive value by combining five technology areas. In FY2023, the company incurred expenses of
JPY109.5 billion ($781.5 million) on R&D, which as a percentage of revenue, stood at 2.9%. HPE makes substantial R&D investments that enable it to produce
innovative products that meet customers' expectations. HPE is currently taking initiatives in five areas, including computing, HPC and AI, storage and data management,
intelligent edge, and Hewlett-Packard Labs. Compute focuses on developing high-quality next-generation computing solutions. HPC & AI concentrates on integrating
systems, which consist of software and hardware that address high-performance computing, AI, data analytics, and transaction processing for government and
commercial customers worldwide. Its storage and data management domain focuses on product development and research to bring new products and solutions into the
market. In Intelligent Edge, the company is investing in the cloud-native Edge Services Platform, which facilitates wired and wireless network operations together with
software-defined wide-area network connectivity. Hewlett-Packard Labs, with the company's R&D groups, focuses on developing next-generation products and
solutions integrating emerging technologies.
What are the strengths of the leading player?
Accenture is one of the world's leading IT services companies that offers consulting and outsourcing solutions. It has a wide geographical presence with operations
spread across the Americas, Europe, Asia-Pacific, Latin America, Africa, and the Middle East. The company has offices in the world's leading business centers,
including San Francisco, Boston, Chicago, New York, London, Madrid, Dublin, Frankfurt, Milan, Beijing, Manila, Paris, Rome, Bangalore, Mumbai, Sao Paulo,
Shanghai, Tokyo, Singapore, and Sydney. Accenture has offices and operations in over 200 cities in 49 countries globally. As of August 2023, the company served
clients in more than 120 countries. IBM operates in over 175 countries and serves clients across industries. Its global reach and customer relationships provide a stable
revenue stream and opportunities for growth and expansion. It also helps the company to mitigate risks by reducing its dependence on any particular customer segment.
It provides IT services, including software development, infrastructure, hosting, and consulting services globally across the Americas, Asia-Pacific, Europe, the Middle
East, and Africa. Fujitsu holds a strong market position which enables the company to attract and retain a wide customer base and develop a competitive edge over
peers. The company is the number one IT services provider in Japan. It is the 10th largest IT services provider in the world. The company provides its services in about
100 countries worldwide. HPE has a diversified geographical presence across the Americas, the Middle East, Europe, Africa and Asia-Pacific. As of December 2022,
the company had seven million square feet of space for administration and support operations; and two million square feet of space for core data centers, manufacturing
plants, research and development facilities, and warehouse operations.
What are the most recent developments in the market?
In February 2024, IBM signed a memorandum of understanding (MOU) with NCS, a Singaporean information, communications, and technology (ICT) company. The
MoU plans to jointly develop and offer end-to-end quantum-safe and privacy-enhancing services for Singaporean businesses and public agencies. In January 2024,
Accenture announced the establishment of generative AI studios in nine countries including Australia, Argentina, Brazil, Greater China, India, Japan, Mexico, the
Philippines, and Singapore in response to increasing customer demand for the technology. The studios will link clients with data and AI experts from Accenture as well
as ecosystem partners, ventures, and other strategic investments to enable rapid experimentation, co-creation, and scaling of generative AI solutions. In October 2023,
IBM unveiled the new IBM Storage Scale System 6000, the newest product in the IBM Storage for storage and AI portfolio. It is a cloud-scale, global storage platform
built to handle the needs of today's data-intensive and AI workloads. With an improved high-performance parallel file system built for usage in data-intensive use
cases, the new IBM Storage Scale System 6000 aims to further solidify IBM's leadership position in the industry. For read-only workloads, it offers up to 7 million IOPs
and 256 gigabits per second of throughput per system in a 4U (four rack unit) size. In May 2023, IBM launched IBM Hybrid Cloud Mesh, a SaaS solution at ONUG
today, to help businesses manage their hybrid multi-cloud architecture. IBM Hybrid Cloud Mesh, powered by "Application-Centric Connectivity," is designed to
assist modern enterprises in managing their infrastructure across hybrid multi-cloud and heterogeneous environments by automating the process, management, and
observability of application connectivity in and between public and private clouds.
April 26, 2024 (07:35) | Publication: MarketLine Industry Reports
Singapore - IT Services - Executive Summary, April 2024
Market value
The Singaporean IT services industry grew by 18.6% in 2023 to reach a value of $25.4 billion.
Market value forecast
In 2028, the Singaporean IT services industry is forecast to have a value of $65.5 billion, an increase of 157.9% since 2023.
Category segmentation
Infrastructure services is the largest segment of the IT services industry in Singapore, accounting for 66.3% of the industry's total value.
Geography segmentation
Singapore accounts for 4.9% of the Asia-Pacific IT services industry value.
Market rivalry
The IT services industry is fragmented, with small players competing alongside large multinationals. Services have become increasingly globalized and are expected to
become gradually automated, particularly due to the adoption of cloud computing services. Moreover, the industry is evolving from offering services such as
outsourcing, which improves productivity and efficiency, to providing value-added services such as analytics consulting. This has increased rivalry as players seek to
capture a share of these higher-margin sectors.
April 26, 2024 (07:35) | Publication: MarketLine Industry Reports
Singapore - IT Services - Five Forces Analysis, April 2024
The IT services market will be analyzed taking information and communications technology companies as players. The key buyers will be taken as small businesses to
multinational companies and government agencies, and providers of hardware devices and softwares, as well as skilled employees as the key suppliers.
Summary
Figure 5: Forces driving competition in the IT services industry in Singapore, 2023
Source: MARKETLINE
The IT services industry is fragmented, with small players competing alongside large multinationals. Services have become increasingly globalized and are expected to
become gradually automated, particularly due to the adoption of cloud computing services. Moreover, the industry is evolving from offering services such as
outsourcing, which improves productivity and efficiency, to providing value-added services such as analytics consulting. This has increased rivalry as players seek to
capture a share of these higher-margin sectors.
In the IT services industry, buyers are often businesses and governments. These buyers range in size with large buyers holding more power due to greater financial
muscle. Moreover, the industry consists of a large number of buyers which reduces their power. Brand recognition is of significant importance to customers and many
look to reputable companies for services. This is particularly the case for players involved in IT outsourcing and data processing, where consistent quality and security
are key factors in winning contracts.
Skilled employees, as suppliers of technical knowledge and expertise, are an important input. Other inputs include hardware components, which tend to be purchased
from a sole supplier, increasing their power. In contrast, some companies engage in backward integration with their own hardware and software capabilities, which
reduces their reliance on external suppliers.
The threat of new entrants is nevertheless very strong due to the ease of entry, the rapid growth of the industry, and the proliferation of niche applications to which start-
ups cater. The players can enter the industry on a small scale with low start-up costs and significantly low infrastructure investment. This increases the likelihood of new
entrants. However, the requirement for specialized knowledge and skills is likely to prevent new entrants in the industry.
A substitute is to employ and train in-house staff to provide IT services. In times of economic difficulty, some companies may rely on existing staff rather than third-
party service providers. However, the services offered by industry players do provide several key advantages. As such, the threat from substitutes remains moderate.
Buyer Power
Figure 6: Drivers of buyer power in the IT services industry in Singapore, 2023
Source: MARKETLINE
Buyers range in size from small businesses to multinational companies and government agencies. Larger buyers, with greater financial muscle, exert more buyer power
as compared to small ones. Also, the market consists of several buyers, which are growing significantly due to the rising number of MSMEs across the country. This rise
in buyer numbers is reducing their power. According to the Department of Statistics Singapore, in 2023, the country had 310,100 enterprises across the country, up from
301,300 in 2022. Out of the total enterprises in 2023, 309,700 were SMEs and 1,400 non-SMEs.
Contracts between industry players and buyers vary according to the service provided. Some IT service contracts can last for several years, which can translate into
substantial switching costs for buyers should they wish to terminate the agreement early. However, consulting contracts tend to be shorter and there is a growing trend
toward shorter-duration contracts. Contracts with large customers are often secured after a bidding process. Consequently, such customers enjoy greater buyer power.
There are both small and large players in the industry offering slightly undifferentiated products, giving buyers the upper hand, as they can choose from a variety of
market players. However, brand recognition is likely to be of significant importance to customers, particularly when it comes to electronic data processing. Buyers will
often look to a reputable company for such services; this is especially the case regarding government contracts, which have heightened media scrutiny in terms of IT
failures.
Full backward integration by buyers is unlikely, even in cases where in-house IT services have been developed. Those IT services cannot match the quality of products
the market players can provide due to years of experience, decreasing buyer power overall. Although this could decrease buyer power, it is mitigated by the fact that
players are reluctant to integrate forwards into buyers' areas of operation, industries in which players may not necessarily have any experience.
The undifferentiated nature of the industry has given rise to strong price competition, driven by a reduction in labor costs, and has encouraged multinational providers to
relocate to low-cost locations. This shows the power that buyers have in influencing player practices. Large-scale players seek to differentiate themselves in terms of
customer relations and are likely to become more successful as they develop more complex offerings. IBM, for instance, has developed 'System One', a quantum
computer that is 1,000 times faster than a normal computing system, which can offer its services to all institutions around the world via cloud access. This will serve to
weaken buyer power. While some smaller companies may seek to drive down the cost of services by seeking the best prices from players, for many buyers, the quality of
the services offered is of the utmost importance as the quality of the buyer's product is greatly affected by this. Multinational corporations and government agencies need
to ensure they obtain a high-quality product as failures could be extremely costly. However, since government agencies and big corporations often employ market
players through auctions or price competitions, they force market players to compete with each other for the same kind of services, giving buyers the power to choose the
best price. Therefore, in this industry, there is a mix of buyers willing to pay less for services and willing to pay more for high-quality services.
Overall, buyer power is assessed as moderate.
Supplier Power
Figure 7: Drivers of supplier power in the IT services industry in Singapore, 2023
Source: MARKETLINE
The suppliers in the market include IT hardware manufacturers, software providers, and a skilled workforce. Inputs such as hardware components are often purchased
from sole suppliers; these tend to be large companies offering differentiated products, resulting in significant supplier power. The leading hardware companies in
Singapore include Dell, Lenovo, and HP. Also, IT service providers rely heavily on computer hardware for offeringservices such as business process outsourcing
(BPO), application development, cloud computing, storage services, and others. This makes suppliers an irreplaceable part of the market which, combined with a diverse
customer base and the importance of quality to the market, increases supplier power. Also, the software market is dominated by large international companies, which
hold substantial power. Leading suppliers in the industry include Microsoft Corporation, Oracle Corporation, and Infosys.
Skilled employees with appropriate technical knowledge and expertise are key to success in this industry, forcing players to rely on the continuedservice of highly
qualified and usually well-paid employees, which results in a high switching cost. In developed countries such as Singapore, where the supply of qualified workforce
may be inadequate, supplier power is increased. Infocomm Media Development Authority (IMDA) is stepping up its pre-employment training and mid-career upskilling
initiatives, with an emphasis on artificial intelligence (AI) to increase and elevate Singapore's tech talent pool. One of the initiatives involves an investment of $20
million over three years to boost the number of SG Digital Scholarships and international internships connected to AI. Also, the Singaporean government is bolstering its
personnel with digital skills. A SkillsFuture initiative called TechSkills Accelerator (TeSA) offers a range of programs to train professionals for tech and digital
employment. These measures will boost tech talent, thereby reducing their power.
Taking into consideration that suppliers in this industry are mainly highly paid and skillful employees,it makes the industry a crucial component of suppliers'
livelihoods, due to their specialized expertise in providing services based on this specific industry. Suppliers could likely move into the industry themselves, due to the
experience they could acquire over their careers, making them willing and confident to start their own companies and organizations. The amount of alternative raw
materials is relatively low, as raw materials in this industry are hardware components and software, which increases supplier power.
Large players such as IBM engage in backward integration as it has its own hardware and software capabilities – reducing its reliance on external suppliers. This slightly
reduces supplier power. Also, software suppliers may begin to forward integrate once more complex software is required to provide IT services linked to powerful
computers, offering parallel processing and advanced analytical techniques, which will increase supplier power. Microsoft, for example, runs a predictive analytics
service based around its Azure cloud platform, while IBM offers access to its new quantum computer System One to institutions around the world through the cloud.
Overall, supplier power in this industry is assessed as strong.
New Entrants
Figure 8: Factors influencing the likelihood of new entrants in theIT services industry in Singapore, 2023
Source: MARKETLINE
Certain industries, such as software development or consultancy, may have minimal entry barriers for newcomers asit require little capital investment in infrastructure,
IT hardware, and a small number of employees. However, industries such as cloud computing or cybersecurity require high investment in infrastructure setup, research
and development (R&D), and hiring personnel. Also, the market for IT services requires specific technical expertise and abilities. To effectively compete, new entrants
need to have expertise in industry-specific domains, software development processes, and developing technologies.
Large companies in this industry have significant economies of scale in processing and can offer more services. Smaller companies can compete by specializing in
particular verticals and offering customized services. However, prominent companies, relying on an established image, may be unwilling to trust smaller, less
established companies, giving larger industry players an advantage. While there is a relatively large number of expert staff in this industry, many will be attracted to
firms such as IBM and Accenture as they are often able to offer greater incentives, such as development opportunities and higher pay. This may deter new entrants as
they may lack the reputation and ability to attract the most experienced staff.
The industry is subject to government regulations and policies related to cybersecurity standards, data privacy rules, and intellectual property which may prevent new
entrants. Regulation is varied and largely dependent on the service offered and the buyers involved. For example, data processing services for financial institutions are
often stringently regulated. The Monetary Authority of Singapore is the financial services regulator. In Singapore, the Personal Data Protection Commission supervises
the fair and lawful use and security of personal data, through the Personal Data Protection Act. Restrictions on data flows between different countries may restrict the
expansion capabilities of new entrants.
Fixed costs for certain industry segments are relatively high, due to the energy and electricity consumption server rooms require. To provide theirservices, even via the
cloud, IT companies require a large amount of space for their server rooms, consuming high levels of electricity. To provide high-endservices and keep them up to date,
server rooms require constant maintenance from highly expert personnel, increasing fixed costs.
Rapid innovation and technology breakthroughs define the IT services sector. Established firms may face serious threats from new competitors with disruptive
technology or creative service offerings, especially if they can fill gaps in the market or offer better value propositions. Increasing demand for the technology and
expertise to implement emerging technologies such as big data, e-commerce, and the IoT will continue to attract new entrants into the industry.
The need for IT services, including software development, cloud computing, data analytics, cybersecurity, and digital consultancy, is accelerating due to the push
towards digitalization. Cloud computing is becoming more and more popular as companies look for affordable, scalable, and flexible IT services and infrastructure.
Demand for cloud migration, administration, and optimization services is driven by cloud services, such as Infrastructure as a Service (IaaS), Platform as a Service
(PaaS), and Software as a Service (SaaS). According to GlobalData, in 2023, the Singaporean cloud computing market reached $6.6 billion, up 26.9% over 2022. Such
favorable demand is expected to attract new players in the industry.
Overall, the likelihood of new entrants to this industry is assessed as strong.
Threat of substitutes
Figure 9: Factors influencing the threat of substitutes in the IT services industry in Singapore, 2023
Source: MARKETLINE
The industry includes indirect substitutes that might not provide an exact solution but can fulfill comparable requirements or offer different strategies. An alternative to
several services offered in this industry is to employ and train in-house staff to provide such services. In times of economic difficulty, some companies may rely on
existing staff rather than third-party service providers. For instance, for digital transformation, a corporation may choose to use self-learning materials and internet
resources or create an inside team. However, the services offered by industry players do provide several key advantages. Hence, indirect substitutes may not fully
replace IT services but can influence purchasing decisions based on factors like cost-effectiveness, control, and scalability.
In the IT services industry, disruptive breakthroughs and emerging technologies represent a serious threat of substitution. New methods or technologies may make
current services less appealing or outdated. For instance, the rise of machine learning (ML) and artificial intelligence (AI) technologies has facilitated the creation of
automated solutions that can carry out operations such as system monitoring and troubleshooting that were previously done by human IT specialists. The increasing
automation of IT services will pose difficulties for many players as buyers seek to bring more services in-house. This will also allow the service arms of hardware and
software suppliers to act as substitutes for traditional IT services players. Equally, professional services firms such as KPMG are increasingly offering IT services due to
the relative ease of replicating service models.
Overall, there is a moderate threat from substitutes in this industry.
Degree of rivalry
Figure 10: Drivers of degree of rivalry in the IT services industry in Singapore, 2023
Source: MARKETLINE
The Singaporean IT services industry consists of numerous players, which increases the rivalry between the players. The industry is dominated by large global players
such as International Business Machines (IBM), Accenture, Fujitsu, and Hewlett Packard Enterprise (HPE) while there exist small companies that focus on certain
niches. Due to the large number of competitors, there is fierce competition as businesses fight for contracts and industry dominance.
Large players attempt to differentiate themselves through several initiatives to boost their competitive edge. Companies such as IBM offer variousservices and products
including hardware and software, which serves to ease rivalry as they are not solely reliant on the revenues generated from this industry. In addition, developments in
social networks, mobile, analytic, and cloud technologies allow players to offer more value-added services, increasing rivalry regarding intellectual property and the
need for perpetual innovation.
The markets in which the companies in this industry operate are subject to technological advances, developing industry standards, and changing customer needs and
preferences. The success of a company is dependent on its ability to anticipate and adapt to changes. Large companies often acquire smaller players to gain access to the
technology and intellectual property of smaller, more innovative firms or expand their geographical footprint. For instance, in August 2023, HPE partnered with
Schneider Electric, a global specialist in energy management and automation, to offer a wide range of sustainability IT services and products to Asia Pacific customers.
Under the agreement, HPE will provide its range of environmentally friendly IT products and services, including HPE GreenLake cloud services, which improve
productivity for businesses by helping them manage workloads and offering insight and flexibility to meet demand without going overboard.
Customers view a lot of IT services, including software development, system integration, and consulting, as undifferentiated. Competition frequently revolves around
price, quality, delivery speed, and customer service when there is little difference in the essential services provided. The absence of distinct product offerings exacerbates
competition, as companies endeavor to set themselves apart through alternative strategies such as creativity, sector knowledge, or client connections.
Security and secrecy are also key factors in terms of data storage, which is perhaps why traditional tax havens top the list of countries with the most secure internet
servers per million people – Liechtenstein, Bermuda, Monaco, Switzerland, Luxembourg, and the Isle of Man are all in the top 10. However, services offered by most
industry players are essentially similar and companies are highly reliant on revenues from the industry.
Companies operate in a highly competitive information technology industry, which is characterized by frequent changes and improvements in technology. Such intense
competition and technological advancements could affect its business and operating results. Competition could intensify with the entry of new entities, the development
of new technologies, products, and services, and convergence. Competition in these markets is determined by several factors such as technical skills and capabilities,
innovative services and product offerings, quality, client relationships, value and speed, availability of resources, price, reliability, and security. Some of its competitors
took several initiatives, which could increase competition in the industry.
The degree of rivalry between players in the Singaporean industry has been alleviated by the strong industry growth between 2018 and 2023, allowing multiple firms to
expand and take advantage of the growing demand for IT services. According to GlobalData, the Singaporean IT services industry grew at a CAGR of 12.0% during the
historic period. Rivalry is expected to be eased in the coming years as the industry experiences strong growth fueled by the accelerating digitalization of businesses and
enterprises.
Overall, the degree of rivalry is assessed as moderate.
April 26, 2024 (07:35) | Publication: MarketLine Industry Reports
Singapore - IT Services - Macroeconomic Indicators, April 2024
Country data
Export Table To Excel
Table 10: Singapore size of population (million), 2019–23
Source: MARKETLINE
Year Population (million) % Growth
2019 6.0 1.8%
2020 6.1 1.7%
Export Table To Excel
Table 11: Singapore gdp (constant 2005 prices, $ billion), 2019–23
Source: MARKETLINE
Year Constant 2005 Prices, $ billion % Growth
2019 240.6 3.7%
2020 250.2 4.0%
Export Table To Excel
Table 12: Singapore gdp (current prices, $ billion), 2019–23
Source: MARKETLINE
Year Current Prices, $ billion % Growth
2019 390.0 5.2%
2020 412.1 5.7%
Export Table To Excel
Table 13: Singapore inflation, 2019–23
Source: MARKETLINE
Inflation Rate
Year
(%)
2019 2.4%
2020 2.2%
Export Table To Excel
Table 14: Singapore consumer price index (absolute), 2019–23
Source: MARKETLINE
Consumer Price Index (2005 =
Year
100)
2019 147.1
2020 150.4
Export Table To Excel
Table 15: Singapore exchange rate, 2019–23
Source: MARKETLINE
Exchange rate Exchange rate
Year
($/Si$) (€/Si$)
2019 1.3642 1.5271
2020 1.3797 1.5759
2021 1.3435 1.5890
2022 1.3787 1.4529
2023 1.3431 1.4523
April 26, 2024 (07:35) | Publication: MarketLine Industry Reports
Singapore - IT Services - Market Data, April 2024
Market Value
The Singaporean IT services industry grew by 18.6% in 2023 to reach a value of $25.4 billion.
The compound annual growth rate of the industry in the period 2018-23 was 12%.
Export Table To Excel
Table 1: Singapore IT services industry value: $ billion, 2018-23
Source: MARKETLINE
Year $ billion Si$ billion € billion % Growth
2018 14.4 19.4 12.2
2019 15.0 20.5 13.4 5.6%
2020 15.9 21.9 13.9 6.9%
2021 17.9 24.1 15.2 10.0%
2022 20.9 28.8 19.8 19.4%
2023 25.4 34.1 23.5 18.6%
CAGR: 2018–23 12.0%
Figure 1: Singapore IT services industry value: $ billion, 2018-23
Source: MARKETLINE
April 26, 2024 (07:35) | Publication: MarketLine Industry Reports
Singapore - IT Services - Market Outlook, April 2024
Market Value Forecast
In 2028, the Singaporean IT services industry is forecast to have a value of $65.5 billion, an increase of 157.9% since 2023.
The compound annual growth rate of the industry in the period 2023-28 is predicted to be 21.3%.
Export Table To Excel
Table 5: Singapore IT services industry value forecast: $ billion, 2023–28
Source: MARKETLINE
Year $ billion Si$ billion € billion % Growth
2023 25.4 34.1 23.5 18.6%
2024 30.5 41.3 28.8 21.2%
2025 36.8 50.2 34.6 21.4%
2026 44.7 61.0 42.0 21.6%
2027 54.5 74.2 51.1 21.7%
2028 65.5 89.4 61.4 20.4%
CAGR: 2023–28 21.3%
Figure 4: Singapore IT services industry value forecast: $ billion, 2023–28
Source: MARKETLINE
April 26, 2024 (07:35) | Publication: MarketLine Industry Reports
Singapore - IT Services - Market Overview, April 2024
Market definition
The IT services market involves the design, development, implementation, management, and support of information technology systems and applications for
organizations. Market values include revenues generated from (a) signed deals that remain under contract and (b) new contracts signed within that calendar year.
The market is segmented into BPO services, application services, and infrastructure services.
The BPO services segment includes customer relationship management (CRM), finance and accounting, human resources, knowledge process outsourcing, and
procurement and supply chain.
The application services segment covers application development, application management, and application performance monitoring.
The infrastructure services segment includes cloud computing, data center & hosting services, IT management, managed security services, and storage services.
All market data and forecasts are adjusted for inflation and all currency conversions used in the creation of this report have been calculated using yearly annual average
exchange rates.
For the purposes of this report, the global market consists of North America, South America, Europe, Asia-Pacific, Middle East, South Africa and Nigeria.
North America consists of Canada, Mexico, and the United States.
South America comprises Argentina, Brazil, Chile, Colombia, and Peru.
Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia,
Spain, Sweden, Switzerland, Turkey, and the United Kingdom.
Scandinavia comprises Denmark, Finland, Norway, and Sweden.
Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea,
Taiwan, Thailand, and Vietnam.
Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.
Market analysis
The Singaporean IT services industry experienced strong growth, during the historic period of 2018-23. The growth was fuelled by rapid digital transformation, across
various industries, resulting in the growing demand for IT services. In 2023, the industry continued to witness an impressive annual growth of 18.6%. Going forward,
the industry growth is forecasted to accelerate and grow at a strong growth rate, over the forecast period of 2023-28.
Singapore captured a share of 4.9% of the Asia-Pacific IT services industry, in 2023. The country boasts the presence of a significant and well-established ICT
(Information and communication technology) industry. Based on the data from the Infocomm Media Development Authority (IMDA), the ICT sector grew 8.6% in
2022, compared with 3.6% for the overall economy. Over the past few years, Singapore has also emerged as a hub for tech firms and startups, attracting numerous large
US and Chinese companies. The demand for software and IT professionals across several industries is also increasing rapidly, indicating the growth of the IT services
industry.
The Singaporean IT services industry registered revenues of $25.4 billion in 2023, representing a compound annual growth rate (CAGR) of 12.0% between 2018 and
2023. In comparison, the Australian and Japanese industries grew with CAGRs of 9.3% and 6.5% respectively, over the same period, to reach $37.3 billion and $107
billion in 2023.
The industry growth remained resilient in 2023, despite the ongoing economic headwinds, caused by geopolitical conflicts across the globe resulting in surging
inflationary pressure. According to GlobalData analysis based on information from the Singapore Department of Statistics, the World Bank (WB), and the Asian
Development Bank (ADB), the consumer price inflation rate in Singapore reached 4.8% in 2023, from 2.3% in 2021. The players in the IT services industry registered
revenue growth, driven by continued demand from clients for extensive technical expertise, to accelerate their digital transformation journeys. The accelerated cloud
adoption is opening new avenues for product and business model innovation. Enterprises are also looking for technology-driven solutions, to help them achieve their new
sustainability objectives. IT service providers are investing in research and development to assist clients with their ever-changing business models, which are forecasted
to drive innovation and demand growth in the coming years.
The infrastructure services segment accounted for the industry's largest proportion in 2023, with total revenues of $16.8 billion, equivalent to 66.3% of the industry's
overall value. The BPO services segment contributed revenues of $4.7 billion in 2023, equating to 18.5% of the industry's aggregate value.
Infrastructure services have experienced a significant demand growth, largely due to an increased effort from businesses to increase their digital presence, alongside the
prevalence of data collection. Additionally, remote, and online working have also increased the value of infrastructure services, resulting in the dominance of the
infrastructure services segment in 2023. Furthermore, a growing shift towards robotics, immersive virtual reality, AI, and connected devices (IoT) will make the existing
infrastructure outdated, and force the companies to invest in updating their IT infrastructure, incorporating the latest technological advancements, which is projected to
ensure the continued growth of the infrastructure services segment, over the forecast period.
The performance of the industry is forecasted to accelerate, with an anticipated CAGR of 21.3% over 2023–28, which is expected to drive the industry to a value of
$66.5 billion by the end of 2028. Comparatively, the Australian and Japanese industries will grow with CAGRs of 15.3% and 12.4% respectively, over the same period,
to reach $76 billion and $192.1 billion in 2028.
The industry growth is projected to accelerate further over the forecast period, driven by the improving economic environment and reducing inflationary pressure,
allowing businesses to increase their ICT budgets, to procure new IT services. According to GlobalData analysis based on information from the Singapore Department of
Statistics, the World Bank (WB), and the Asian Development Bank (ADB), the consumer price inflation rate in Singapore is estimated to go down to 2.8% in 2024, from
4.8% in 2023. Furthermore, amidst geopolitical crises and supply chain disruptions, the prevailing global economic environment is compelling businesses to embrace
novel technological innovations, driving the demand for IT services. Enterprises are searching for innovative digital ways to maintain a strong competitive position in the
future, which is projected to drive the demand for IT services, in the coming years.
April 26, 2024 (07:35) | Publication: MarketLine Industry Reports
Singapore - IT Services - Market Segmentation, April 2024
Category Segmentation
Infrastructure services is the largest segment of the IT services industry in Singapore, accounting for 66.3% of the industry's total value.
The BPO Services segment accounts for a further 18.5% of the industry.
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Table 2: Singapore IT services industry category segmentation: % share, by value, 2018-2023
Source: MARKETLINE
Category 2018 2019 2020 2021 2022 2023
Infrastructure Services 60.7% 61.4% 62.5% 63.7% 65.3% 66.3%
BPO Services 22.3% 22.0% 21.6% 21.1% 19.6% 18.5%
Application Services 17.1% 16.6% 16.0% 15.2% 15.1% 15.2%
Total 100% 100% 100% 100% 100% 100%
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Table 3: Singapore IT services industry category segmentation: $ billion, 2018-2023
Source: MARKETLINE
Category 2018 2019 2020 2021 2022 2023 2018-23 CAGR(%)
Infrastructure Services 8.8 9.4 10.2 11.4 14.0 16.8 13.9
BPO Services 3.2 3.4 3.5 3.8 4.2 4.7 7.9
Application Services 2.5 2.5 2.6 2.7 3.2 3.9 9.4
Total 14.5 15.3 16.3 17.9 21.4 25.4 31.2
Figure 2: Singapore IT services industry category segmentation: $ billion, 2018-2023
Source: MARKETLINE
Geography Segmentation
Singapore accounts for 4.9% of the Asia-Pacific IT services industry value.
China accounts for a further 34.8% of the Asia-Pacific industry.
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Table 4: Singapore IT services industry geography segmentation: $ billion, 2023
Source: MARKETLINE
Geography 2023 %
China 179.1 34.8
Japan 107.0 20.8
Australia 37.3 7.2
Singapore 25.4 4.9
New Zealand 4.6 0.9
Rest of Asia-Pacific 162.0 31.4
Total 515.4 100%
Figure 3: Singapore IT services industry geography segmentation: % share, by value, 2023
Source: MARKETLINE
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