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January 2010 Quick Hits - News, Trends & Analysis

Dell To Tap Into Mid-market Outsourcing
Ever since Dell bought Perot Systems in September 2009, the executives at the top Indian outsourcers must have felt the competition. In the past 4 months they have pitched for 88 deals between $20-50MM, which is in direct competition with traditional Indian outsourcers. A research analyst from Gartner has commented on offshoringtimes, "The USD 7.5-billion services giant, with about 50 percent of its 42,000 workforce in India, could drive down prices, much like it has done in the hardware business and pose a challenge for the Indian technology majors. Dell might do to services what it has done to hardware by direct selling bring down prices of services and put margins under pressure". Dell has an edge over Indian service providers, as it offers complete hardware and software services capabilities, matched only by the likes of HP and IBM. This is good news for the underserved midmarket as hopefully one more competitor in the market will help Indian firms remain competitive.

Indian Gaming Industry Set For Record Growth
Indian Gaming software companies are reporting huge growth. As mentioned on offshoring times, "[The Indian gaming software industry] is poised to grow 49 per cent to touch USD 830 million by 2012, when the country's overall animation market will scale USD1 billion. According to the 2008-09 report of the IT-BPO industry body, the Indian animation industry was worth USD494 million in 2008." Historically, Indian outsourcers were dependent upon foreign outsourced gaming projects, but internal demand is extremely strong and the demand for computer gaming animation is increasing rapidly. So in addition to being a favourite destination for outsourcing projects there are signs India will become a centre for original gaming products.

Leaner IT Procurement Saves Government £196MM
As reported by Rebecca Thompson on Computerweekly,"The Office of Government Commerce (OGC) reported a total of £1.4bn savings in its annual statement, with IT making up a significant portion. The OGC has attempted to overhaul the way government departments and other parts of the public sector buy equipment. E-procurement tools have enabled public sector organisations to collaborate over prices and purchasing, pushing prices down and buying in bulk. The public sector spends about £220bn on goods and services each year. The annual statement said tools such as e-auctions have made a difference to prices. Since 2005 ten collaborative IT hardware e-auctions, involving 144 public sector stakeholders, have led to savings of £43.8m." So finally the public sector begins to embrace some of the tools and techniques the private sector has been leveraging for the past decade. With the ever increasing public debt, it is about time that the government focuses on cost productivity initiatives, and I would imagine this is just the tip of the iceberg.

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