Customers Are Sending Packaged Application Services Offshore: What Are the Implications for ISVs, Service Providers, and Offshore Vendors?

This IDC study analyzes the results of a survey of over 750 U.S. users of offshore packaged application services. It reveals that customers are increasingly relying on offshore for nearly the entire spectrum of services surrounding packaged applications' life cycles, including implementation and integration, maintenance, management, and retirement. Major software companies, smaller ISVs, and service providers must then adjust to a reality where customers see offshore as a permanent part of their sourcing plans and expect a certain level of cost savings from offshore as a baseline requirement before moving forward with a project.

"IDC's latest offshore survey results show that U.S. customers from a variety of industries are highly motivated to take advantage of global sourcing for a range of packaged application services. All of the players that contribute to the ecosystem of services surrounding a packaged application's life cycle are therefore being impacted by increased customer reliance on the cost savings and flexibility generated by utilizing offshore for application services and will need to adjust their strategies accordingly," said Barry Mason Rubenstein, senior analyst for Application Outsourcing and Offshore Services at IDC.