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Everest RFI Analysis: Large Companies Leveraging Offshore IT Services Aggressively, Multinational IT Suppliers Continue Targeting Mid-Market Buyers.
ADM Deal Size, Duration for MNCs and Tier-1 Offshore Suppliers Converging.
North American companies signed a larger number of Infrastructure Outsourcing (IO) deals in 2009, heavily leveraging offshore suppliers of IT services as they remained focused on the bare minimum to keep IT operations working and outsourced mostly nondiscretionary infrastructure services, according to an analysis of requests for information (RFIs) by Everest, a global consulting and research firm. Large, multinational suppliers (MNCs) of IT Outsourcing (ITO) services continued their shift of reducing focus on very large IO buyers, inking a significant number of deals with mid-sized buyers and leveraging more complex pricing mechanisms compared to the largely offered input-based pricing models used by offshore players.
The Everest study, ITO (IT Outsourcing) Market Update: ITO Request for Information 2010 – A Market Insights Report, analyzes 503 engagements sourced from participating suppliers that provided RFIs for their 30 largest deals, in terms of total contract value, signed in 2009.
Some of the insights from the in-depth analysis include:
“North American buyers focused on non discretionary infrastructure outsourcing spend due to economic conditions, which is why North American contributions in IO deals went up significantly in 2009 though it was largely similar for ADM deals compared to the previous year,” said Ross Tisnovsky, vice president, Research. “Continuing the trend of previous years, a clear focus on large buyers was evident for both IO and ADM deals signed in 2009.”