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UK leads the field in outsourcing boom

The UK is outshining its overseas peers in terms of the number of outsourcing deals signed during the second quarter of this year.

By Maggie Holland, 23 Oct 2007 at 23:58

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Appetite for outsourcing shows no sign of abating just yet as the number of deals signed with companies providing such services in Europe, the Middle East and Africa (EMEA) demonstrated stellar growth at the beginning of this year, according to a new report from Forrester Research.

The UK led the charge by closing more than a third (36 per cent) of the 84 deals signed during the period of growth, with the total number of deals closed equating to more than €5.4 billion - a rise of €1 billion compared to the same period in 2006.

The UK's deal prosperity showed a seven per cent gain on the number of contracts it closed during the period studied by Forrester - Q2 2007 - and, although they also showed solid performance during the quarter, left German and Dutch outsourcing providers nestling in joint second place in the deals signed league.

In terms of deal specifics, Q2 2007 included 11 per cent more contracts including more than one service (referred to as service bundles) than a year previously.

Almost half (45 per cent) of all deals included infrastructure services, with Forrester referencing IBM Global Services' €371 million, 10-year renewal deal with insurance giant Royal & Sun Alliance.

Deals with helpdesk and support services and desktop services included also proved popular during the period with 44 per cent and 31 per cent of partnerships formed including such services.

"With 84 deals closed and more than €5.8 billion spent, Q2 2007 blew away the results of Q2 2006," said the report's author Andrew Parker in an executive summary.

"...IBM Global Services showed the best performance in terms of number of deals and aggregate deal value, leaving its competition far behind. The runner-up here was Capita, which closed one megadeal. Smaller deal sizes gained in popularity again this quarter, and buyers maintained their love of five-year contracts."

Forrester's study specifically focused on so-called mega deals worth more than €10 million from a pool of 25 IT service providers active during the second quarter. As part of its research it interviewed key players including BT Global Services, Capgemini, EDS, Fujitsu Services, HP, IBM Global Services, Infosys, LogicaCMG and Unisys among others.