IDC Says Australia and IBM still drive Outsourcing in the Asia/Pacific Region

NORTH SYDNEY – APRIL 6, 2001 – IDC research has shown that whilst the overall Asia/Pacific marketplace is experiencing strong growth of countries outsourcing their Information Technology resources, the majority of activity is currently centered on Australia. Additionally IBM has enjoyed leadership in 2000 from both a contract signing and market positioning perspective. "Of the 26 most significant outsourcing contracts tracked by IDC in 2000, 60% of these were signed in Australia," said Phil Hassey, Senior Analyst for IS Outsourcing. "These contracts included significant outsourcing deals entered by blue chip Australian firms such as Westpac, AMP and BHP."


Although of a smaller scale than the contracts signed in Australia, there were a number of groundbreaking contracts signed across the Asia/Pacific region. In India, IBM was able to pick up two significant contracts. One of these was with the Indian conglomerate Tata, creating precedence for the major global outsourcing vendors being successful in penetrating this previously difficult market. "The momentum is turning for firms across the region to outsource their non-core business functions particularly as the global and regional economies enter an uncertain and unforgiving future," Mr. Hassey added.

According to the market researcher, IBM currently has strong market leadership, however they cannot stand still as a number of other vendors are attempting to position themselves to compete directly against Big Blue. "This is particularly true for the most competitive segment of the market where vendors such as Compaq, Getronics, and Cap Gemini Ernst & Young are looking to break from the pack and be considered a leader," Mr. Hassey said. Additionally, a number of firms such as NCS and KAZ have been very successful in gaining market share and an identity in specific service offerings and geographies competing directly against the larger global firms.

Whilst 2000 was dominated by Australia and IBM, the IDC report identified a number of opportunities that exist for vendors to understand their competitors capabilities and position themselves to ensure that they can increase their market penetration and presence. With the Asia/Pacific market rapidly increasing in maturity, vendors must position themselves early to ensure that they are considered a serious alternative when a potential client starts the process of outsourcing.

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