Introduction

Everest conducted an ITO deal-based Request for Information (RFI) exercise in Q2 2009. The RFI study is distinguished by ITO market insight and perspectives founded on detailed data-driven analyses of contract characteristics, buyer adoption and other industry trends. It provides comparative dialogue on the offshore and multinational suppliers through analysis of deal data.

This report discusses key messages from the IT Outsourcing RFI 2009 and presents conclusions on the market trends in ITO during 2008 and its key market segments: Infrastructure Outsourcing (IO), Applications Development and Maintenance (ADM) and Bundled ITO deals. Buyers and suppliers would be able to gain deeper understanding of trends in the IT services industry.

Scope

• Everest conducted the Information Technology Outsourcing (ITO) Request For Information (RFI) exercise in Q2, 2009
• The report analyzes a representative sample of responses from 17 ITO suppliers. These included large multinational (MNC) suppliers with headquarters in Europe, North America, and India
• RFI participants were asked to report their 25 largest ITO deals (by total contract value) for 2008
• A total of 509 ITO deals were reported and analyzed; the overview section of this document describes the scope of reported data in greater detail
• Respondents were asked for only their top 25 deals so as to focus on the high-value ITO market and to limit the extent of effort required for data collection

Contents

This research attempts to analyze and understand key trends from the perspective of deal activity within the high-value segment of the ITO market. Key Insights are divided by function into three categories: Infrastructure Outsourcing, ADM Outsourcing and Bundling trends in ITO. Each category contains insights by buyer preference and supplier trends, which are discussed in detail (and illustrated with supporting data and analysis) to provide the reader with information in easy-to-apply, bite-size pieces. For example, the IO segment of the ITO market is influenced by the following key trends:

• Multinational suppliers signed larger IO deals overall. Large buyers signed deals with longer durations with MNC suppliers while average deal durations continued to decline over the past two years
• Buyer industries did not show preference for either of the two models, offshore or MNC. In BFSI, buyers clearly reduced signings with MNC suppliers, while offshore suppliers witnessed a steady demand
• NA saw the most deals signed overall, while MNC suppliers focused on EMEA. Offshore suppliers remained focused on NA in terms of deal values. EMEA also had a higher share of complex pricing model in scope
• Offshore deal sizes appear comparable to MNC deals after necessary scope-driven adjustment. The profile of buyers targeted by both models appears very similar. Mid-market buyers are the largest adopters of the offshore model