The outsourcing market in Germany was worth around euro10.65 billion in 2004 and will grow to nearly euro15 billion by 2008. With growth rates of around 8%, outsourcing remains the star performer of the German IT services market.
Outsourcing is clearly driven by the private sector, particularly manufacturing (automotive) and banking, where the investment backlog is now gradually starting to be dissolved. However, continuing economic difficulties and the inert public sector prevent this high-potential market from being unleashed.
At the same time, competition is heating up as more and more international players want a share of the German outsourcing cake. This implies that price pressure will continue to be harsh and further consolidation can be expected.