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Abstract, Snapshot, Market Analysis & Market Definition: Global Engineering Services Outsourcing MarketThe global Engineering Services Outsourcing market size was valued at USD 244.17 billion in 2018 and is expected to register a CAGR of 29.5% from 2019 to 2025. The rising level of technical complexities for product development and manufacturing across industries, need to reduce costs, shorter product lifecycles, and the increasing number of tie-ups between Original Equipment Manufacturers (OEMs) and Engineering Service Providers (ESPs) is expected to boost the growth. ESPs were traditionally categorized as third-party vendors. However, the changing industrial scenario for product development and manufacturing has helped elevate their status to key stakeholders in the product development cycle. Solutions offered by these vendors range from CAD drawings and designing to providing IT infrastructure, technology embedded systems, and manufacturing solutions. With the growing instances of ESO, however, clients have begun seeking more complex and end-to-end solutions. Additionally, a few firms also engage in partnerships and strategic collaborations that involve co-innovation, sharing financial risks, and focusing together on business outcomes to engage in medium- to long-term client relationships. ESO market growth and the high adoption of engineering services outsourcing is majorly attributed to a shorter product lifecycle. Business solutions offered usually last for a shorter duration, which results in re-purchase or resubscription. For instance, an end-user would need to renew the IT infrastructure service post the contract duration or an automobile OEM may require a new set of engines for its upcoming vehicle that requires continuous technological upgrades. Therefore, the repetitive nature of the services ensures that the ESO business thrives, along with increasing demand for subsequent products. The ESO business has witnessed numerous technological advancements since the year 2000 in various sectors, such as automotive, aerospace, healthcare, telecommunication, and consumer electronics, among others. The years 2000 to 2010 were crucial for software embedded development in products and its ecosystem to offer faster product development. On the other hand, post-2010, there has been an increasing focus on emerging technologies, including IoT, Machine-to-Machine (M2M) adoption, and digital transformational solutions. Another phenomenon that emerged since 2015 has been the integration of manufacturing with engineering and IT services, such as 3D or additive printing in the oil and gas sector, and auto-smart manufacturing along with other cross industries. Some of the major factors to be considered while selecting an ESP are the domain expertise, previous projects, market value, and quality of service it offers. New entrants may find it difficult to enter the market and establish their presence due to the lack of project expertise, familiarity with client requirements, and business network. Business solutions for structural, architectural, civil, and electrical engineering witness the highest demand across industries. Furthermore, the most demanded mechanical engineering services include CAD conversion service, 2D drafting service, 3D modeling rendering service, reverse engineering service, AutoCAD conversion, and plant design management.
Market Segmentation, Outlook & Viewpoint: Global Engineering Services Outsourcing Market
Application Market Segmentation & Outlook (Revenue, USD Billion, 2014 - 2025)
- System Integration
- Consumer Electronics
Location Market Segmentation & Outlook (Revenue, USD Billion, 2014 - 2025)
Key Players, Recent Developments & Regional Insights: Global Engineering Services Outsourcing MarketBy application, the ESO market is segmented into aerospace, automotive, construction, consumer electronics, semiconductor, pharmaceuticals, telecom, and others. The others segment includes engineering services provided to the industrial and energy and utilities segment. Offshore as well as onshore ESPs are an integral part of the value chain for mechanical, technical, and software support solutions. The ESO sector has evolved to a large degree, resulting in the expansion of its operations in the telecom, aerospace, automotive, healthcare, and other major verticals by spending heavily on product development and offering engineering expertise across industries. Telecom ESO segment is projected to account for the highest revenue share of around 25% by 2025, whereas the aerospace segment is anticipated to witness the highest CAGR over the forecast period. A substantial revenue share generated from the telecom ESO segment is majorly attributed to global telecom players being keen on expanding their market presence in countries such as China, India, and South Africa. The automotive sector has been witnessing a moderate growth trajectory across major developing countries owing to the high demand for passenger vehicles. While developed countries are more inclined toward technologically upgraded cars and bringing product innovation in the automobile industry with autonomous and connected cars, developing countries are still more focused on economical cars, thus supporting the need to develop Electric Vehicles (EVs). Some of the most popular automotive ESO solutions include powertrain electrification, the development of vehicles with piloted or autonomous driving systems, and the use of lightweight materials for vehicle manufacturing. In order to meet core competencies, automobile companies are striving to procure technologically upgraded offshore and onshore ESO assistance. The consumer electronics ESO segment is anticipated to grow at a robust rate over the forecast period. The industry is undergoing rapid changes, primarily driven by the concept of convergence. Users are demanding enhanced mobility, better entertainment, and interoperability of devices for data and media. ESPs are offering assistance to semiconductor companies, OEMs, and technology providers for developing next-generation smart devices that can be controlled in real-time without physical accessibility. Companies are outsourcing engineering services to address product localization needs, introduce new features and technologies, and leverage industry best practices to be globally competitive.
Location InsightsOnshore engineering services outsourcing refers to the services availed from an ESO vendor in the home country. Hence, the onshore segment revenue refers to a home company outsourcing its business solutions to another domestic company within the national territory. For instance, a German company outsourcing its engineering services to another company operating in Germany falls under the onshore ESO category. On the other hand, the offshore market revenue is contributed by companies offering their engineering services outside their national boundary. Every country has some area of expertise based on their education, resources, and cultural growth, which, OEMs from other countries can benefit from to enhance their product quality. For instance, the U.S.-based companies massively outsource less skill engaging activities to India and other similar outsourcing destinations due to the benefits in terms of a relatively less expensive workforce with similar skills that is offered by companies at offshore locations. The offshore ESO segment accounted for the highest revenue contribution in 2018 and is expected to continue leading over the forecast period owing to the availability of a highly skilled and relatively less expensive workforce in countries such as India, Philippines, Malaysia, Brazil, Russia, and Romania, which makes them the most sought-after outsourcing destinations. The onshore ESO segment on the other hand is is expected to witness the highest CAGR from 2019 to 2025.
Regional InsightsAsia Pacific is expected to account for the highest market share in terms of revenue and register the highest CAGR over the forecast period. Countries such as China, Brazil, and India are the major automotive, construction, and machine manufacturing hubs witnessing a rising demand for ESO owing to the growing industries in these developing countries. Europe is also expected to witness decent growth over the forecast period. Eastern European countries such as Poland, Romania, Ukraine, Russia, and the Czech Republic are the most lucrative software development outsourcing destinations. Europe is more preferred for electrical and software engineering outsourcing services. The U.S. and several European countries are anticipated to witness a significantly slower growth as compared to the Asia Pacific. India competes with countries such as France, U.S., and Germany for onshore services, whereas for offshore delivery it competes with countries such as the Philippines, Vietnam, China, Mexico, and Eastern European nations.
Engineering Services Outsourcing Market Share InsightsLeading vendors providing global ESO solutions include HCL Technologies Limited, Tata Consultancy Services Limited, Tech Mahindra Limited, Infosys Limited, and Wipro Limited These companies offer a wide range of engineering services outsourcing that are backed by advanced technologies to support various stages of a product lifecycle to provide an end-to-end product solution. Some of the other ESO providers with core expertise in the automotive and aerospace sector are RLE International Group; Altair Engineering, Inc.; and Alten GmbH. Additionally, some of the prominent players considered in the study are Aricent Group; Cybage Software Pvt. Ltd.; Pactera Technology International Ltd.; PM Group; EPAM Systems, Inc.; GlobalLogic; Deaton Engineering; Inc.; Cyient Ltd.; and Fareva SA.
Key Insights Covered: Global Engineering Services Outsourcing Market1. North America, Europe, Asia Pacific, Middle East & Africa, Latin America market size (sales, revenue and growth rate) of Engineering Services Outsourcing industry. 2. Global major manufacturers' operating situation (sales, revenue, growth rate and gross margin) of Engineering Services Outsourcing industry. 3. Global major countries (United States, Canada, Germany, France, UK, Italy, Russia, Spain, China, Japan, Korea, India, Australia, New Zealand, Southeast Asia, Middle East, Africa, Mexico, Brazil, C. America, Chile, Peru, Colombia) market size (sales, revenue and growth rate) of Engineering Services Outsourcing industry. 4. SWOT analysis, New Project Investment Feasibility Analysis, Upstream raw materials and manufacturing equipment & Industry chain analysis of Engineering Services Outsourcing industry. 5. Global market size (sales, revenue) forecast by regions and countries from 2019 to 2024 of Engineering Services Outsourcing industry.
Research Methodology: Global Engineering Services Outsourcing Market
- Data collection and base year analysis is done using data collection modules with large sample sizes. The market data is analyzed and forecasted using market statistical and coherent models. Also market share analysis and key trend analysis are the major success factors in the market report. To know more please Request a Sample Report.
- Demand Side Primary Contributors: OEMs, Industrial Professionals, Researches, Suppliers and Distributors, Group Purchasing Organizations, Associations, Insurers, Universities, Technological Writers, Scientists, Promoters, Investors among others.
- Supply Side Primary Contributors: Product Managers, Marketing Managers, C-Level Executives, Distributors, Market Intelligence, Regulatory Affairs Managers among other
Table of Contents Chapter 1. Methodology and Scope 1.1. Research Methodology 1.2. Research Scope & Assumptions 1.3. List of Data SourcesChapter 2. Executive Summary 2.1. Engineering Services Outsourcing (ESO) - Industry Snapshot & Key Buying Criteria, 2014 - 2025Chapter 3. ESO Industry Outlook 3.1. Market Segmentation & Scope 3.2. ESO Market Size and Growth Prospects 3.3. Outsourcing Classification 3.4. ESO - Value Chain Analysis 3.5. ESO Services Evolution 3.6. Market Dynamics 3.6.1. Market driver analysis 188.8.131.52. Increased tie- | read more...