San Francisco, April 19, 2016 (GLOBE NEWSWIRE) -- The global engineering services outsourcing market is expected to reach USD 415.74 billion by 2020. Rising cost pressures on firms leading to constrained R&D budgets is expected to be a primary growth driver for the industry. Companies prefer to outsource the service as it enhances efficiency, improves processes, lowers time to market products. In addition, it yields cost advantages which in turn relates to profit maximization. In addition, dynamic consumer buying behavior leading to shorter product life cycle is projected to fuel market growth.
High competition among leading companies has given rise to cost reduction across companies in several industries including consumer electronics and automotive. In order to reduce costs, companies have initiated augmenting their capabilities by utilizing outsourced IT services. This further leads to cost minimization thus benefiting the company in the long run. Outsourcing engineering services allow businesses to get the most out of constrained budgets and focus on more critical issues. However, the threat of intellectual property theft is expected to hinder industry growth.
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Demand for engineering services outsourcing in telecom sector accounted for over 19% of the overall market in 2013. Growing dominance of telecom sector is attributed to the integration of business and operations support systems which require significant back-end equipment and expertise by the telecom industry.
Increasing demand for consumer electronic products has resulted in leading companies expanding their service portfolio. However, smaller market players owing to their cost constraints heavily rely on engineering services outsourcing to cater growing demand. As a result, the segment is expected to witness the highest growth among other application over the projected period. Key engineering services required for manufacturing these consumer electronic devices such as embedded software development, design & testing, and development & testing are increasingly outsourced to ESO vendors, thus driving industry growth.
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Asia Pacific demand for engineering services outsourcing was valued at over USD 44 billion in 2013 and is expected to experience substantial growth over the forecast period. Growth can be attributed to strong manufacturing base in the region and presence of a large talent pool. Emerging economies including India and China are projected to be leading growth in the region.
Europe is expected to grow at a CAGR of more than 25% over the period of six years owing to a high inclination among European firms to outsource engineering activities with the same country or within western European nations to ensuring regulatory compliance.
Key players in the industry include Tata ELXSI, QuEST Global, HCL Technologies Ltd, Tata Consultancy Services, Wipro, MindTree Ltd., and Infosys Ltd. Other companies include Aricent Group, VanceInfo Technologies Inc., Corp., Infotech Enterprises Ltd., Global Logic, EPAM Services, Cybage Software Pvt. Ltd., KPIT Cummins Infosystems Ltd., IGATE, and Calsoft Labs.
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Grand View Research has segmented the global engineering services outsourcing market on the basis of end-use and region:
ESO End-Use Outlook (Revenue, USD Billion, 2012 – 2020)
• Consumer Electronics
ESO Regional Outlook (Revenue, USD Billion, 2012 – 2020)
• North America
• Asia Pacific
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