For IT Services Professionals

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April 4, 2006 European IT Outsourcing Deals: 2005 Review Service Providers Run Faster To Stand Still; We Saw More Smaller Deals by Andrew Parker, Sonoko Takahashi with Caroline Hoekendijk

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Executive Summary

Forrester's quarterly outsourcing survey identified more outsourcing contracts than ever before in 2005 — we recorded 305 separate contracts. The UK stood firm at the head of the outsourcing league, but Germany faltered in its advance. Government and public sector activity growth was the single most notable feature of the year, with contract numbers up and aggregate deal value vastly increased; UK central and local government took the lion's share. As in 2004, about two-thirds of the contracts signed were new deals, but they had a higher average contract value in 2005. The number of deals for five years or less increased to about 70% of all deals. Because of this, and because many contracts clustered toward the bottom of our deal value range, most service providers had to work hard to build bookings success. But a few companies — notably EDS and BT — sustained the life of the megadeal.

TABLE OF CONTENTS

• Marking Out The Year-On-Year Outsourcing Shifts: 2004 To 2005
• Small Shifts Resulted In More Spending
• 2005's Highlights: Differentiated Offerings And Willing Buyers
• Supplemental Material
• Related Research Documents

This is an excerpt