Tuesday, March 24, 2009

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IT outsourcing prices to fall -Gartner report

* Sees IT outsourcing prices dropping 5-20 pct through 2010
* Economy, IT budget constraints to hurt prices
(Source: Reuters) - Prices of IT outsourcing services will shrink 5 to 20 percent through 2010 due to the uncertain economic climate, IT budget constraints and competition between vendors, research firm Gartner said on Monday.

"This fall in prices will occur due to increasing competition in the market between traditional and new providers as more providers compete aggressively to keep revenue growth on target, while ensuring margins," Gartner said.

Gartner said it expects prices for application hosting services to fall by 10 to 20 percent and for network services to fall 10 to 15 percent. It sees prices for data centre service dropping 5 to 15 percent and help desk services 5 to 10 percent.

"These are not `price list reductions' but represent an overall price reduction on infrastructure outsourcing deals that may apply to new deals and, albeit only partially, to renegotiated deals," analyst Claudio Da Rold said in a statement.


  1. No wonder that the IT players are looking at BPO as a focus area. BPO companies are seeing a better run than the IT companies - both in terms of margins, pricing stability and client stickiness. Check out this link which talks about why clients should look at BPO in these tough economic conditions - very interesting stuff - http://bpotheliferaft.wns.com/


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