SYS-CON India: Offshore IT Companies Score Big Wins
New Research Shows Second-Tier Companies Joining the Party
Oct. 12, 2005 06:00 AM
New research by independent market analyst Datamonitor (DTM.L), and leading outsourcing advisory firm Everest Group has found that second-tier and offshore IT services vendors scored some landmark contract wins during the third quarter (Q3) of 2005.
Datamonitor's "IT Services Contracts Database," found that Indian suppliers Tata Consultancy Services and Infosys Technologies, and second-tier international vendors including Keane Inc and Pomeroy Computer Resources all secured their largest-ever contract wins during the quarter. This says Datamonitor, reflects the growing trend for client organizations to work with a number of best-of-breed, specialist suppliers to manage specific areas of their IT infrastructure.
Datamonitor's "IT Services Contract Database," is the most comprehensive and up-to-date guide for contracts within the global IT services market. The service tracks every new outsourcing, systems integration and consulting deal with a value greater than $1m signed by major IT services vendors, and contains information on more than 7,500 contracts signed during the last five years.
Datamonitor tracked a total of 432 deals during Q3 2005, which represented a 1% decline from the year-ago period. However the value of deals fell by 32% from $41.9bn in Q3 2004 to $28.5bn in Q3 2005, with the average contract size declining from $95.7m in Q3 2004 to $66m Q3 2005. The main reason for this was that the number of billion-dollar deals announced over Q3 2005 (four), was half the number tracked during Q3 2004.
Nick Mayes, Principal Analyst for Global Computing Services at Datamonitor, noted: "Overall, this has been a major quarter for offshore sourcing. Large corporations such as ABN AMRO are dealing directly with offshore services vendors, and are signing deals worth hundreds of millions of dollars with them. Global IT sourcing models are gaining mainstream acceptance."