Can Offshore Outsourcing Vendors end control of Big Six

Around $100 billion in Offshore Outsourcing contracts would be up for capture in the next two to three years, and some of the big players including Accenture, Electronic Data Systems, IBM and some other names could feel their seize on the market decline due to more competition from Offshore Development companies from several countries across the globe. Currently these big names are dominating the market for the overseas services, but slowly the time is changing as the competition in the market is increasing gradually. But the real question is can Offshore Outsourcing vendors end control of big six in the future? Or would these companies be the dominant in the market?

Offshore Outsourcing deals

The list of these "Big Six" for the Offshore Outsourcing services includes the names of “Accenture, IBM, EDS (Electronic Data Systems), Affiliated Computer Services, Computer Sciences Corp., and Hewlett-Packard (HP). These are currently the service providers on 72% of the agreement value to be renewed over the next two to three years, and could view their dominance challenged. This report is according to Offshore Outsourcing advisory firm TPI. It stated 325 contracts are outstanding for renewal during the year 2006 and 2007 and one in five of all Offshore Development deals. IBM and EDS are the service providers who alone have a combined total amount of $50 billion in agreements coming up for renewal services.

Although present service providers usually win service or development contract renewals, increasing competition indicates service providers cannot relax on their success. They are also required to come out with some unique ideas or business process ways. Day by day the competition in the market is increasing and several new players are entering into the market. Now companies are finding it very tough to gain the new clients. So client retention would increasingly rely on an incumbent's skills and potential to propose a competitive proposition in the growing market. All these could mean considerable changes in price and extent from the original contract or services from the house of the service providers. They would also be forces to think in some newer way to entertain the clients. And almost half of all new service or development contracts include some more or less overseas element.

There is also a craze toward smaller contracts, which could be challenging one to the dominance of the big participants and help Offshore Outsourcing companies from the house of India. India is the country that is emerging very fast in the field of the overseas services and Offshore Development in IT and other industries. You can find lots of brand names as well as ample talented and skilled professionals who are ready to serve you with unbelievable lower rate than the existence players. These companies and many more from other countries are really posing lots of challenges to the big players for Offshore Outsourcing globally.

Survey also suggests that of the 293 agreements signed in the year 2005 and nearly three-quarters out of them were of small to medium size agreements. And while Offshore Development companies form the house of India rarely win contracts valued at more than $200 million. Figures suggest that last year companies from the house of India were invited to pitch for 30% of agreements below this doorstep and they had won around 70% of such Offshore Outsourcing contracts.

The fact is now both big Offshore Outsourcing Company and Indian service providers expand their operations globally, and this leads to the increment in the intense competition in this market.