More companies are choosing to use IT outsourcing, a new study has shown.

The latest Advisor and Business/IT Service Provider Pulse Survey from EquaTerra revealed that 75 per cent of IT outsourcing providers polled saw growth in the new deal pipeline, indicating that market demand is on the increase.

In addition, 68 per cent of companies said they expect rising demand will continue through to the end of 2009.

Stan Lepeak, managing director of global research for EquaTerra, explained: “The bulk of outsourcing demand is still defensive, aimed at short-term cost-cutting and cost-containment strategies.”

However, he added that around ten per cent of IT outsourcing providers are seeing their clients make selective investments in new technologies in order to prepare for the eventual economic upturn.

The poll also found that outsourcing has been made more attractive to a broader base of clients by the economic downturn, as it allows them to make short-term savings with minimal upfront investment.

Earlier this month, Adam Stokes, operations manager at the IT Job Board, pointed out that IT outsourcing is a tested method of reducing costs, which has been the main reason why firms have been investing in it.

Written by Jessie Richards