Global Engineering Services Outsourcing (ESO) Market Size Was Worth US$ 317.2 billion in 2020, and It Is Estimated to Reach a Valuation of US$ 1.18 trillion by the end of 2026

Global Engineering Services Outsourcing (ESO) Market Size Was Worth US$ 317.2 billion in 2020, and It Is Estimated to Reach a Valuation of US$ 1.18 trillion by the end of 2026

September 29, 2021, New York, USA - Engineering Services Outsourcing: Introduction

In the organization, many engineering functions are performed. Those engineering functions are assigned to the team or team members who are based outside of your company is called Engineering Services Outsourcing. 

Organizations can have access to low-cost and talented offshore markets by outsourcing their projects. Because of outsourcing, Businesses can focus on their efforts on important revenue streams onshore, while transactional duties will be maintained offshore. 

Engineering Functions That Can be Outsourced Are:-

Research and development

CAD and drafting

Value management and benchmarking

Consulting services

Product lifecycle management

Business information modeling

Reverse engineering

Document management

Benefits of Engineering Services Outsourcing:

You might be worried about the risk of engineering service outsourcing. Let's figure out the pros of outsourcing engineering services. 

It is Cost-Effective:

This is why most big organizations opt for Engineering Services Outsourcing. As per the report, an organization can drastically reduce the cost of labor and other investment costs by 30% to 50%. The money which is saved by outsourcing can be invested into the core business. 

Direct Access to the Efficient Trained Engineer and Best-in-class Technology:

When you opt for Outsourcing for Engineering Services, You can directly access the team of trained and skilled engineers who have an abundance of experience in engineering. Besides, you get the benefits of advanced engineering tools and advance technology offered by outsourcing firms. 

Less Turnaround time:  

Engineering services providers have access to a skilled team of skilled and trained engineers, so they are capable of complete the project as quickly as possible. With the outsourcing team, there is assurance that your deadline will always be met and, most of the time even much earlier than you have planned.

Effective Resource Management:

By outsourcing, you get the comfort to leverage suitable engineering resources as and when you need them, and you can avoid the need for investment into the permanent resources. With increased flexibility and extra assistance, you can take up more engineering projects and widen your customers base. 

Increased Focused:

Outsourcing service providers put their complete focus on finishing your job. Hence, by outsourcing, you can just focus on your core business activities.   

The Global Engineering Services Outsourcing Market Forecast: 

Globally, the engineering service outsourcing (ESO) market was USD 317.2 billion in the year 2020. The market is projected to grow at a rate of 30.1% (CAGR) in 2021-2026 over the forecast timeframe.

In an industry-driven world, R&D has always been considered intellectual property, which is why it is handled with strict privacy. There was no space for collaboration or complementary R&D.

But, after a period of development, it was evident that there was a shift away from just products to a broader set of services centered around the product, with a focus on user experience. There was also a need to develop for the products, their associated platforms, as well as specific and industry-specific variants for businesses to enter the market.

Companies are involved in the development of or improving services to better serve customers in various industries like manufacturing, construction, and more. The market for engineering services has seen rapid growth across different regions. Engineering services are services required at every stage of the life cycle of the product from concept until retirement. Development and design of products that are at the heart of the engineering have for a long time utilized Information Technology (IT) via databases and tools as well as the automation of specific processes.

Engineering services developed to an outsourced model, which improved the efficiency of firms with improved processes and cost-efficiency as well as shortened the time needed to create an item. Numerous companies have started offshoring in order to save money and have also stepped up their outsourcing commitments due to more strategically oriented reasons. The automotive industry is one example of offshore engineering. While some companies, like GM, employ offshoring as a tool for tactical reasons to cut costs, other companies such as Toyota consider offshoring for product development as more strategically oriented terms. It is an opportunity to expand access to new markets and increase overall efficiency and quality. This more strategic approach is likely to become more commonplace over time.

Market Drivers and Market Restraints for the Global Engineering Services Outsourcing Market:-

The main driver of the market for engineering outsourcing is the growing demand for automation, as well as the growing use of integrated solutions for analyzing and creating engineering systems. Software for engineering, such as computer-aided design (CAD) software and software for computer-aided engineering (CAE) software and computer-aided manufacturing (CAM) software, Electronic design automation (EDA) software as well as architecture engineering construction (AEC) software is widely used by various industries in the region.

In addition, the rising use of mobile devices like tablets, smartphones, and laptops has boosted the accessibility and ease of engineering applications. This will help in boosting the growth of the market for engineering software. Additionally, the advent of engineering software that is cloud-based has boosted the market.

However, the high maintenance cost and licensing costs, along with a lack of knowledge in operating the software, is causing a problem for the growth. Many executives are beginning to accept that outsourcing product development is an effective method to not just cut the costs of innovation but also speed up the time to market and enhance the magnitude of innovation. Another reason that is limiting the market for engineering services outsourcing is the fact that the cost gap between professionals from developing and advanced nations is decreasing. The biggest opportunity for the key players in the growing demand for engineering outsourcing to the shipbuilding, marine and offshore industries in order to create solid operating platforms that can withstand the extreme conditions of weather, space restrictions remote locations, and physical space constraints.

The Key Market Segmentation of the Global Engineering Services Outsourcing Market: 

Global Engineering Services Outsourcing Market can be divided into Services, Location, Applications, and Geographical landscapes, etc. 

Engineering Services Outsourcing Market Segmentation By Services:



System Integration



Engineering Services Outsourcing Market Segmentation By Location:



Engineering Services Outsourcing Market Segmentation By Application:




Consumer Electronics





Engineering Services Outsourcing Market Segmentation By Geographical Landscape:

North America


Asia Pacific

South America

Middle East and Africa

Major Key Players in the Global Engineering Services Outsourcing Market Are:

Infosys Ltd.

ASAP Holding GmbH

Altran Technologies S.A

Altair Engineering, Inc.

Infosys Limited

Kistler Instrumente AG

Tata Consultancy Services



HCL Technologies

Alten GmbH

Cybage Software Pvt. Ltd.

Wipro Ltd.

FEV Group

EDAG Engineering GmbH

Aricent Group

Tech Mahindra

EPAM Systems Inc.

The Global Engineering Services Outsourcing Market Report Highlights:

Markets in North America are expected to lead the global market with respect to revenue due to the high level of adoption of cloud-based services by diverse industries across the region.

Asia Pacific is expected to experience the fastest growth of revenue due to the high use of IT solutions within industries across the region.

Latin America, and the Middle East, and Africa are predicted to experience significant growth in the next years due to the increasing demand for cloud-based technology and IT services across diverse sectors.

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