Western European outsourcing contracts top $40bn

The 100 biggest outsourcing deals in western Europe reached a total value of $40.5bn (£22.2bn) last year, figures from industry analyst IDC have revealed.

Information systems and network and desktop outsourcing (NDOS) accounted for a huge chunk of the total, with a combined value of $32.7bn. Business process outsourcing was growing across western Europe, but outside the UK the net value of the market was very small, the research found.

The top-100-deals total is down on the 2004 figure of $42.1bn, but the largest deals increased in value, with nine “megadeals” signed for a combined sum of $20.5bn in 2005 – more than half the total figure.

Jennifer Thomson, research manager for IDC European services, said the figures confirmed the emergence of large-scale multi-sourcing, “with five out of nine megadeals awarded by two government agencies”.

The government, manufacturing and financial services sectors accounted for nearly 90% of the top 100 deals.

The figures revealed that while IBM signed 14 deals last year – more than any other outsourcing firm – the total value of the contracts was less than those won by BT Global Services and EDS.