Introduction

Everest conducted an Information Technology Outsourcing (ITO) deal-based Request for Information (RFI) exercise in Q1 2010. 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 2010 and presents conclusions on the market trends in ITO during 2009 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 ITO Request For Information exercise in Q1, 2010
• 19 ITO suppliers participated in the RFI 2010. They include large multinational (MNC) suppliers with headquarters in Europe and North America as well as Indian suppliers
• We asked RFI participants to report their 30 largest ITO deals (by total contract value) for 2009
• A total of 503 ITO deals were reported and analyzed; the overview section of this document describes the scope of reported data in greater detail
• We have presented a separate analysis of ADM deals for Tier-1 offshore suppliers and MNCs in this report recognizing the fact that ADM contributes a significant proportion of Tier-1 offshore suppliers’ revenue
  

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. Some key findings of this research attempt are:

• Multinational suppliers signed larger IO deals overall, however the average size and duration of IO deals for both MNCs and offshore suppliers declined in 2009. MNCs continued signing longer duration deals with large buyers
• North America had highest contribution towards number of IO deals. MNCs signed large IO deals in EMEA whereas offshore suppliers had similar deal size in both the geographies
• In ADM, MNCs signed higher value, scope and duration deals compared to offshore suppliers. Large buyers preferred input based pricing with offshore suppliers and complex pricing with MNC suppliers
• MNCs continued with past trend of defocusing on large buyers and had significant contribution from mid-sized buyers unlike offshore players which were focused on large ADM buyers