Increasing Digitalization Is Set to Drive the Growth of the Netherlands IT Services Market Through 2027

The Netherlands IT Services Market is estimated to grow at a CAGR of 3.93% during the forecast period 2022-2027 and reach $14.63 billion by 2027, from around $11.87 billion in 2021. The market is growing towards eastern part of the Europe and outside of the Europe region and also the market is growing because of outsourcing part.  The trend of increasing demand of IT services due to AI, Machine learning, block chain, IoT is being seen. IoT especially is playing a major role in Netherlands IT Services. IT services plays a major role in country growth and IT services is contributing a significant part when compared with different sectors by growing at 4% every year. The in-house services market is expanding to outside of the Europe and outsourced is expanding towards east.

Covid-19 has slightly Impacted (like finding contracts, acquisitions) the Netherland IT Services market, but not as much as other industries due to remote work mostly done during the lockdown period. On-premise deployment is low while cloud deployment is high and growing because of automation, less maintenance, easily scalability etc. The country has close to 450,000 developers or IT professionals working in the country, which makes the country one of the most dense with respect to tech talent relative to the number of inhabitants compared to other European countries. The country also has more than 600+ international ICT companies operating, with close to 180 companies having Amsterdam is their headquarters.

Covid-19 pandemic has had an adverse effect in the political scenerio. the vaccination program in Netherlands was one of the last in Europe which further restricted the resuming of workflow to pre covid levels. In January 2021, the government of Netherlands resigned over the childcare benefits scandal.  Political instability is causing a loss of confidence among the general public. As a result digitally skilled workers are moving out of the country, which in turn is limiting the growth of the underlying sector. According to the World Bank and International Finance Corporation (IFC) ranking, the Netherlands ranks 117th out of 185 economies in the world of investor protection, which becomes a cause of restraint for new investors.

The Netherlands is one of the biggest players on the worldwide stage of IT and it's excellent logistical access to the rest of Europe makes it very attractive for companies and start-ups to commence business. The Netherlands IT industry serves as a connection point to around 60% of all the companies of Forbes 2000 that are active in the IT Industry. Due to the tax incentives and ease of doing business, the Netherlands IT industry remains one of the most appealing industries in the world. According to the World Economic Forum, the Netherlands ranks 6th in the world as the most tech-savvy country. Major Dutch IT hubs are centered in Amsterdam, Delft, Eindhoven and so on, as a result the availability of top Tech talent runs far and wide across the Netherlands.

Cloud services have progressed from being used on an occasional basis to being used in essential corporate applications and crucial business processes. Early adopters began utilising the cloud because of their technological knowledge and curiosity in the early years. The focus these days is considerably more on the functionality and application of cloud solutions, such as within business processes. The organizations are adopting IT services owing to the exposed data hosted to substantial risks, including privacy, identify theft and cyber security. The IT companies are focusing on shifting from on-premises to cloud and developing new cloud frameworks. In the coming years, rapid implementation of these advanced technology to build efficient and comparatively more cost-effective data storage infrastructure which will be helping the businesses to invest in data centres, thereby influencing the development of IT services in the industry. The market is growing towards eastern part of the Europe and outside of the Europe region and also the market is growing owing to the outsourcing demand. The trend of increasing demand of IT services due to AI, Machine learning, block chain, IoT. IoT plays a crucial role in Netherlands IT Services.

Data centres have been playing a vital role towards rising industrial growth due to generation of massive amounts of organizational data. As the data rates have been rising due to growing advancements such as edge computing, internet of things, cloud and many others, data centres have been focusing towards implementing high speed connectivity with more data efficiency and flexibility. Such factors have been causing higher adoption from data centres, thus propelling the growth of IT Services Market. The growing investments and expansions of the data centres are further contributing to the market growth rate during forecast period 2021-2026. 

In April 2021, Equinix announced the completion of the construction of Phase 3 expansion of its AM7 facility in Amsterdam, the Netherlands with an investment of $63M. Equinix has also stated that Amsterdam is one of Europe's most cloud-dense and highly connected cities, offering low-latency connectivity to the rest of the world and its AM7 is a state-of-the-art data centre and a key location in Europe. In December 2021, the Dutch government has stated that there are still about 20 to 25 plans for the establishment or expansion of data centres in the Netherlands. These certainly attract investments into the sector. In December 2021, Green Mountain announced acquisition of land adjacent to its DC3-Oslo data centre campus. This is majorly aimed to expand the current site with a new 13,5 MW colocation data centre. Construction of this data centre has already started with an estimated completion in November 2022.

Major players in IT Services Market include Microsoft, Capgemini, Ayden, Atos, ComTrade Group,  Ordina, Elastic N.V,  SAP, Centric and  NTT Data Services among others. In August 2021, Adyen entered into a partnership with Shiji Payments, a leader in the provision of technological solutions for the hospitality, food service, retail, and entertainment industries to enable hospitality businesses to utilize the Adyen platform. This new integration streamlines the payment process for hospitality businesses by eliminating the need for a plethora of platforms and suppliers, which typically include separate processes for property management systems, food and beverage point of sale, and guest experience platforms.