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| Gartner Dataquest Survey Shows Most Companies Using Offshore IT Services Expect to Increase Their Investment in Next 12 Months |
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STAMFORD, CONN., September 9, 2002 - Demand for offshore sourcing is still immature and penetration of the U.S. market is low, however, the industry will continue to experience steady growth, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).
In January and February of 2002, Gartner Dataquest conducted phone interviews with 917 U.S.-based companies (with 1,000 employees or more) to gauge their interest in offshore IT services. Five percent (42 companies) indicated they currently use or plan to use offshore resources in the next 12 months. Among respondents who expect to increase their budgets for offshore initiatives in 2003, 69 percent expect budgets to be 1 ½ times that of 2002. Twenty-six percent expect to nearly double their spending for offshore IT services within the next year. "There is a significant increase in the number of U.S. businesses exploring the offshore sourcing model," said Rebecca Scholl, senior analyst for Gartner Dataquest's IT services group. "We expect that over the next 12 months, the primary driver of growth for the offshore services market will occur from increased budgets of existing clients rather than new adopters." According to the survey, the top opportunities for growth in offshore services over the next year will include enterprise application integration (EAI) services, applications outsourcing, packaged application implementation and integration with legacy applications beyond applications development and maintenance services. Currently, India is the primary country of choice for IT service spending with 70 percent of survey respondents acquiring offshore services from India. Eighty-three percent say they plan to outsource to India within the next year. Canada, Ireland, Singapore, Mexico and China were also sited as countries to outsource to. Even with the current political situation, Gartner Dataquest predicts India will maintain its leadership position and possibly expand its penetration over the next 12 months. "The India/Pakistan crisis has increased the level of focus on the need to manage Geo-political risk, but has not substantially changed plans for offshore services or the choice of country," said Debashish Sinha, principal analyst for Gartner Dataquest's IT services group. "We advise clients to work with their offshore vendors to focus, update and improve their current business continuity plans in the wake of current events." Additional information is available in the Gartner Dataquest Focus Report "Demand Analysis of Offshore IT Services." This report examines the current usage of offshore IT services by midsize and large U.S. companies. Further discussion of offshore outsourcing and related services issues will be discussed at Gartner Symposium/ITxpo, October 6-11 in Orlando, Florida. Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look at the future of IT. For more information, please visit www.gartner.com/symposium. Members of the media can register by contacting Maria DiMasi at 212-699-2734, or by e-mail at gartnerevents@eurorscg.com. Gartner Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software and services sectors of the global information technology industry. About Gartner |
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Contact: Allison Haines Gartner +1 203 316 6216 allison.haines@gartner.com |
