The Hindu Business Line : Outsourcing on the rise in European market, says IDC

OUTSOURCING is being increasingly adopted in European markets with 150 per cent rise in number of outsourcing deals in 2003 compared to that in 2002, according to research firm IDC.

The total value of top 100 European outsourcing deals increased by 74 per cent to $44 billion owing to almost doubling of mega deals, a release by IDC said. "A look at the top 100 outsourcing mega-deals by country and a comparison between 2002 and 2003 reveals that although the UK leads with 46 in 2003, its share has come down from 57 in 2002. Denmark and Sweden have considerably increased their share in the top 100 outsourcing deals," it said.

But when it comes to offshoring these services, only 1.1 per cent of the IT outsourcing services were offshored to other locations. This percentage is predicted to increase to 1.8 per cent by 2008, which although small, could be significant for players like India in absolute numbers, it added.

"For many countries in Europe, in particular Germany, the nearshore market in countries such as Poland, Czech Republic and Russia is very important," said Mr Phil Hassey, Associate Director, Asia Pacific Services, IDC said. The release said that France and UK were seen to be quite open to offshoring whereas Italy, Benelux and Germany were not so forthcoming.

"Europe is made up of several countries, in some ways they are integrated and in others they maintain their strong independence... India has the largest opportunities and synergies with the UK," the release said but added that while the UK must be a priority market, an understanding of the other markets in Europe and the required integration could lead to greater opportunities for Indian based firms.