End to Outsourcing 'Exclusivity'?

Filed in archive Outsourcing News on January 25, 2005

Technology Partners International (TPI) presented its quarterly Index Report on the global outsourcing market. The report focused on high-end private sector outsourcing in the past year.

TPI reported that in 2004, Europe has become the biggest outsourcing region with 49 percent of the global market share. Within the region, United kingdom was the leading outsourcing country with 19.5 percent of the global market share. Also, Germany increased its market share from 4 percent to 12.5 percent largely through ITO contracts.

TPI also noted that more companies have changed suppliers while under an existing long-term contract with one supplier. "Between 1999 and 2003, 36 companies signed deals that were worth over 40 million euros. Of these customers, a massive 89 percent signed subsequent deals with non-incumbent service providers." Moreover, it was shown that 69 percent of companies with bigger deals (over 400 million euros) have also signed subsequent deals with other providers.

The report revealed that the outsourcing market has become more competitive. More deals have been awarded to more service providers in 2004 (62 deals among 30 unique service providers) than in 2003 (53 deals among 21 unique service providers). Additionally, the top six vendors experienced a 28 percent decrease in the number of deals with 52 deals in 2004 against 68 deals in 2003.