Introduction

In order to better understand key market trends and how they affect the IT outsourcing market, Everest conducted an ITO deal-based Request for Information (RFI) exercise in Q2 2008. The RFI study is distinguished by ITO market insight and perspectives founded on detailed data-driven analyses of contract characteristics, buyer adoption and other industry trends.

This report discusses key messages from the IT Outsourcing RFI 2008 and presents conclusions on the market trends in ITO and its key market segments: Infrastructure Outsourcing (IO), Applications Development and Maintenance (ADM) and Bundled ITO deals. Both buyers and suppliers will gain a deeper understanding of the ongoing evolution in the ITO market, and will be better positioned to adapt to changing market conditions.

Scope

• The Everest ITO Request for Information (RFI) exercise was conducted in Q2, 2008. We analyzed a representative sample of responses from twelve ITO suppliers. These included large multinational suppliers with headquarters in Europe, North America and India
• We asked RFI participants to report their 25 largest ITO deals (by total contract value) for 2007. We asked respondents only for their top deals, so as to focus on the high-value ITO market and to limit the extent of effort required for data collection
• A total of 493 ITO deals were reported and analyzed. The analyses are based on aggregated summaries of the responses by a relevant category (i.e., buyer geography, buyer revenue, industry group, supplier type, etc.)

Contents

This research attempts to analyze and understand key trends from the perspective of deal activity within the high-value segment of the ITO market. Key Insights are divided by function into three categories: Infrastructure Outsourcing, ADM Outsourcing and Bundling trends in ITO. Each category contains 4-6 key trends, which are discussed in detail (and illustrated with supporting data and analysis) to provide the reader with information in easy-to-apply, bite-size pieces. For example, the ADM segment of the ITO market is influenced by the following key trends:

• There are multiple signs of increasing maturity of the offshore model leading to growing similarity of the deals signed by MNCs and offshore suppliers
• India remains the key offshore delivery location of choice for all suppliers. ADM suppliers also appear to be further consolidating project delivery to single-region offshore locations, compared to 2006