Biggie gets Small

Filed in archive Intelligence on June 12, 2008

Photo courtesy of iStockphoto, Mikael Damkier

In a recent article published in Cybermedia India On-Line, Kurt Potter of Gartner described the diminishing number of mega-deals reported in 2007. Mr. Potter described the market as moving to smaller multi-sourced arrangements in this, the second phase of outsourcing.

While not news to those of us in the industry, and even considering the large deal at BRISTOL-Meyers Squibb reported earlier in this series, 2007 showed a marked decline in the number of billion-dollar "megadeals" to the lowest level in 8 years - and even lower than 2001's $20.3 billion.

What does this say? Maturity in the market, perhaps, with fewer companies trusting the "out-of-sight, out-of-mind" mentality of the first phase of outsourcing. Instead, these companies are trying multi-sourcing, with smaller individual deals with a variety of vendors.

Who wins? Vendors that are nimble, companies that are smart, and advisors that can scale properly to meet the deal requirements. Who loses? Those chasing the billion-dollar deal. Should be an interesting few years.