Outsourcing Prices Could Fall 10%
Prices in the IT services outsourcing market could face a 10% decline in the coming year, according to analyst firm Gartner
The outsourcing market faces up to two years of falling prices, according to analyst firm Gartner.
Prices in all areas of IT services will fall by between five and 20 per cent, Gartner forecasts, with an average fall of 10 per cent in the coming year because of the uncertain economic climate and IT budget constraints.
"This fall in prices will occur due to increasing competition in the market between traditional and new providers, as more providers compete aggressively to keep revenue growth on target," Claudio Da Rold, an analyst at Gartner, said in a statement on Monday.
Regardless of the relative strength of outsourcing during a recession, many companies are reporting intense discussions with their vendors, according to Da Rold. "[This includes] renegotiation of contracts for terms and conditions, service-level agreements, fees, volumes and low-cost offshore delivery locations," he said.
