This IDC study highlights selected application outsourcing findings from the 2006 IT Outsourcing Survey of 304 U.S. IT decision makers. It evaluates survey responses in a number of areas, including IT priorities, IT outsourcing drivers and inhibitors, preferred vendor characteristics, cost savings expectations, application life-cycle service packaging preferences, legacy modernization plans, and hosted application management pricing and vendor preferences.

"With cost savings from globally sourced labor arbitrage becoming mere table stakes in the application outsourcing market and with efficiencies driven from improved maintenance processes becoming a mere baseline, AO competitors must work to better differentiate their services. The results from IDC's latest IT outsourcing survey show that there are a number of ways to do this, from utility pricing to modernization services," said Barry Rubenstein, program manager, Application Outsourcing and Offshore Services at IDC.