Market softens for outsourcing megadeals

The value of the top 100 outsourcing deals worldwide fell by 39.2 percent in 2007 to $58.6 billion, said IDC, the market intelligence firm headquartered in Framingham.

What's more, the number of megadeals, or deals valued at $1 billion or more - dropped to 14 in 2007 from 29 in 2006. IDC said.

"2007 revealed a substantial softening of the megadeal market, as the percentage of the top 100 total contract value constituted from megadeals declined from 65.1 percent in 2006 to 34.4 percent in 2007," Terrance Strom, IDC's research analyst of IT outsourcing and utility services, said in a statement. "While not declaring the demise of the megadeal, we may in fact be witnessing a cyclical saturation of the market. Service providers will need to continue to invest in lower cost and more flexible delivery models, wisely expand their global footprint, and focus on emerging markets as the source of material growth in the years to come."
(By Chris Reidy, Globe staff)