Pure Application Development and Maintenance (ADM) deals contributed the maximum number of ITO (Information Technology Outsourcing) deals, followed by pure Infrastructure Outsourcing (IO) deals in 2009, according to the ITO (IT Outsourcing) Market Update: ITO Request for Information 2010 – A Market Insights Report, from Everest Group, a global sourcing consulting and research firm.
The Everest study revealed that, while Multinational suppliers signed larger IO deals overall, the average size and duration of IO deals for both MNCs and offshore suppliers declined in 2009. However, MNCs continued signing longer duration deals with large buyers.
The report was based on an analysis and understanding of key trends from the perspective of deal activity within the high-value segment of the ITO market. Key insights were divided by function into three categories: Infrastructure Outsourcing, ADM Outsourcing and Bundling trends in ITO; and each category presented insights based on buyer preference and supplier trends.
“There is definitely a change in the ADM and IO market with MNCs signing longer duration deals with large buyers. We also observed that large buyers preferred input-based pricing with offshore suppliers and complex pricing with MNCs” said Mr Gaurav Gupta, Principal& Country Head, India, Everest group. “The study provides extensive ITO market insight and perspectives, based on detailed data-driven analyses of contract characteristics, buyer adoption and other industry trends.
For instance, it was seen that ADM deals with MNCs witnessed lesser contribution from larger buyers as compared to the offshore players. Moreover, while large buyers became more aggressive for IO and were leveraging the offshore supplier’s RIMO model, MNCs witnessed a continued shift towards mid-sized to smaller IO buyers.” He added.