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May 2010 Quick Hits - News, Trends & Analysis

Outsourcing Recovery Is Slow
The Election is over and the new government in the UK has inherited a financial mess. The market responded positively but there are still concerns this will be a double dip recession. Equaterra collected some interesting information in their latest survey. "We are seeing more infrastructure projects - data centre, desktop services, network services. They are being looked at now because the underlying asset is at the end of its life," said Lee Ayling, managing director for IT outsourcing UK at the company. The majority (71%) of the IT service providers surveyed predict that demand for outsourcing will grow over the next six months, up from only 26% in the second half of 2009." The trends continue that buyers of outsourcing services are asking for more from their suppliers, they want better value for money. There is also still a lack of decision making due to the unstable economy, leaders are scared to make changes, but many key outsourcing experts are in agreement that after 2 years of little activity there has never been a better time to negotiate a favourable deal.

Indian Firms Top IAOP List
It is incredible to think about that just a decade ago most of the Indian providers wouldn't even get close to a top 50 list of IT Service providers, and today due to favourable labour rates, government sponsorship, and a competitive spirit there are 3 Indian outsourcers in the top 10. As commented on offshoringtimes "The ranking of the top ten firms which made to the list is as follows: Accenture bagged the top position followed by Infosys and Sodexo. Wipro Technologies won the fourth position while IBM and ISS are at fifth and sixth. TCS is at the seventh position while ARAMARK, CSC and Convergys bagged the eighth, ninth and 10th positions respectively. The leading players on both lists possess strong customer references, management capabilities, balanced performance and demonstrated competencies in an industry that is increasingly becoming more strategic and used for higher skilled knowledge-based activities." One can only imagine what that list will look like in 2020, perhaps we will see a Chinese vendor on it.

Malaysia Outsourcing Expected To Grow Between 15-20%
India continues to dominate the offshoring industry, but due to rising salaries, other nations in Asia are winning deals in the SME market as customers want more competitive, value-added outsourcing services. Malaysia has an advantage over India due to its multi-lingual talents. Many Malaysian service providers can offer services in English, Malay, Chinese and Tamil, and some even speak Japanese and Korean. As commented on Business Standard, "Malaysia has all the ingredients to become successful. Among them are skilled workers, resources and infrastructure as well as reasonable cost" They will not have the scale of India to compete in the tier 1 sector, but don't be surprised to see them winning more deals in the Midmarket.


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