Offshore IT outsourcing market tops $10bn

Offshore IT outsourcing market tops $10bn

The global IT offshore outsourcing market is now worth more than $10bn and will continue to grow nearly 20% annually through to 2008, according to research by US analyst firm Meta Group.

Meta Group says offshoring will continue to exceed outsourcing generally, with immediate market growth in application development and maintenance (20%).
Despite the political backlash against shifting work overseas, the average firm will offshore 60% of application work by 2009, says Meta.

Several offshore outsourcing vendors now exceed $1 billion in annual revenue, and the total market is greater than $10 billion.

Dean Davison, vice president at Meta Group, says offshore outsourcing provides access to worldwide resources otherwise unavailable to most enterprises.

"With global resources costing one-third to one-fifth that of American employees - without accounting for hidden costs - and having higher process discipline, offshore strategies now pervade North American IT organisations" says Davison.

Research released by Gartner earlier this year suggests that as many as one-in-four traditional IT jobs will have been shifted to low-cost offshore centres by 2010.

Gartner forecast that by 2005, 30% of European businesses will include offshoring as a key element in their strategic planning.

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