UK dominates European outsourcing spend

The high-end outsourcing market in the UK is booming, new research has claimed.

Analyst IDC reported that the total value of the 100 largest European outsourcing deals signed in 2003 increased from $19bn to $44bn.

IDC found that the UK came top of the league of major outsourcing deal signings, accounting for 54 per cent of the total number of contracts signed in Europe.

By sector, governments were found to have committed most heavily to outsourcing, accounting for almost half of all major deals.

IBM Global Services led the actual provision of outsourcing contracts, both in terms of the number of deals signed and their aggregate contract value.

The company won the business in over a quarter of the top European deals as monitored by IDC.

"This increase shows that outsourcing in Europe is booming, and was fuelled by strong growth in investment from end users in the public sector and the UK," said Khalid Irshad, senior analyst at IDC.

"Many clients committed themselves to longer and larger contracts in 2003 despite some negative publicity and fears of an outsourcing backlash following a number of high-profile contract difficulties.

"This reflects an increasing demand for outsourcing as a way of controlling/reducing costs and increasing efficiencies."

IDC predicted that this market will continue to grow in the future, albeit at a slower rate as operating conditions become more difficult due to a combination of increased competition, market maturity and pricing pressure.