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Supersize it! Outsourcing megadeals grow in 2002

Supersize it! Outsourcing megadeals grow in 2002

In IT outsourcing, it seems that size matters: more outsourcing megadeals were signed in 2002 than in 2001.

Market research company Dataquest, said there were at least 14 outsourcing megadeals worth a combined total of $US28.4 billion in 2002, up from nine such deals worth a combined total of $US15.1 billion in 2002. Already in 2003 there were at least four pending megadeals worth a combined total of $US15.3 billion.

Dataquest defined an outsourcing megadeal as one whose value over the life of the contract exceeded $US1 billion, principal analyst, Bruce Caldwell, said.

Criticism has been levied recently at this type of outsourcing megadeal, for being difficult to manage and putting a strain on both the client and the provider, but judging by the results of the study it seems that chief information officers aren't heeding the warnings to steer clear of these engagements.

IBM snatched half of the outsourcing megadeals last year and shared another with Keane. Electronic Data Systems (EDS) won two and Computer Sciences Corp (CSC) got one.

Over the past 12 years, IBM leads with at least 32 megadeals, followed by EDS (21) and CSC (15).


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