Boom in Large European Deals in 2003 Shifts Locus of Top 100 Outsourcing Wins to Europe, Says IDC

FRAMINGHAM, MA – December 16, 2004 – Spending on the top 100 outsourcing deals worldwide increased from $48.3 billion in 2002 to $66.1 billion in 2003 and, for the first time, Europe surpassed the Americas, capturing more than half of the top 100 deals and accounting for more than half the value of these deals. A new study from IDC reveals that much of the growth in spending was due to an outsourcing boom in Europe, led by several megadeals worth more than $1 billion signed in the U.K.

In contrast to geographic dominance by EMEA, U.S.-based outsourcers continued to lead in the top 100 with the greatest number of large deals. Of the twenty-six outsourcers that were involved in the top 100 worldwide outsourcing deals of 2003, 66% of the deals were signed by just five players, with IBM leading the way followed by CSC, EDS, Accenture, and BT.

While the total spend for the 100 highest-valued outsourcing deals jumped considerably, the deals were actually concentrated in fewer industries. Only 15 industries in 2003 were involved in the top contracts with the primary activity occurring in four sectors, as compared with 17 in 2002: central government, financial markets, communications and media, and discrete manufacturing.

"The world of deal making for large outsourcing contracts in 2003 continued on a strong path and resulted in just a couple of large players capturing the majority of contract value for the top 100 outsourcing deals, though with a shift in geographic focus," said David Tapper, director of IT Outsourcing, Utility, and Offshore Services research at IDC. "However, with customers increasing their focus on controlling costs, IT and business processes converging, and greater competition from key offshore players, success in this space will require many outsourcers to dramatically alter their business and service delivery models."

The IDC study, IDC's Top 100 Worldwide Outsourcing Deals of 2003 (IDC #32376), provides IDC's analysis of the top 100 worldwide outsourcing deals for 2003, and formulates future outlooks and specific guidance through the investigation of worldwide trends and contractual patterns.

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