Worldwide and U.S. IT Outsourcing Services 2005-2009 Forecast: An Industry in Need of a New Strategy

This IDC study provides worldwide and regional market forecasts for the IT outsourcing market. Additionally, this forecast provides in-depth analysis of the U.S. IT outsourcing market and market forces that are beginning to have some significant impact on growth for U.S. IT outsourcing. This document analyzes the impact of these trends and provides recommendations on how best to compete in the United States IT outsourcing space.

The document answers the following questions:

"U.S. IT outsourcers are faced with a series of changing conditions that are impacting their ability to continue healthy sustained growth in the coming years. These conditions include slowing growth in the U.S. market, increased customer use of discrete IT outsourcing, reduced average size of deals greater than $1 billion, and continued downward price pressures resulting from the use of easier-to-use and cheaper technologies offshore and newer forms of service delivery, such as utility computing and SaaS. Further, there is increased convergence of IT outsourcing and BPO as IT outsourcing appears to be a core element in providing more scalable and cost-effective business services. Finally, a new breed of players (not yet a competitive threat) could begin to impact the IT outsourcing space. Examples include Google, Yahoo!, eBay, Travelocity, and Amazon.com. Success for incumbent outsourcers will depend highly on how well they adjust to these changing requirements and potential threats," said David Tapper, director for IT Outsourcing, Utility, and Offshore Services research at IDC.