The total value of new outsourcing contracts in the €40 million
plus bracket, where most significant outsourcing activity occurs,
is up 78% on 2006.
This €12.3 billion of new business represents a significant
recovery from the relatively soft outsourcing market experienced in
Europe last year, and is a 23% increase on an average €10 billion
of new contracts added in each of the previous five years. So
impressive is Europe’s record on new deals this year that it
accounts for over half (54%) of new outsourcing contracts signed
globally, against 32% last year and a five-year average of 38%.
Duncan Aitchison, managing director of TPI, said: "continental
European countries have been relatively slow to adopt outsourcing,
which makes it a market with huge growth potential. Five years ago,
the region accounted for only twelve per cent of global outsourcing
deal activity, and only Germany, France and the Netherlands managed
to achieve above a one per cent share."
"Now, Continental Europe has nearly trebled its share to thirty
per cent, with Belgium, Denmark, Norway, Finland, Switzerland and
Italy each representing over one per cent of the global market," he
said.
Europe’s buoyancy has been driven in particular by a
concentration of “mega deals” in the region. These deals,
each worth in excess of €800,000 million, represent 44% of the new
business to hit the
European outsourcing market so far in 2007. Moreover, of
€7.8 billion in mega deals awarded
globally this year, over two thirds (68%) have been in Europe,
which compares with an average of 39% over the last five years and
gives Europe its greatest ever share of this top end of the
outsourcing market.
Four of the five mega deals awarded in Europe this year have
been for network outsourcing, as indeed have been five of the eight
mega deals struck worldwide, with growth in this area propelling
telecoms companies up the hierarchy of global outsourcing
providers. Ranked by their share of contract awards worth over
€40 million (including restructurings), BT now takes the number two
position worldwide, up from number 13 last year; Alcatel-Lucent and
Ericsson take the number five and six spots, up from 15 and 11
respectively; and AT&T enters the top 15 for the first time at
number 10.
The global 'big six' (Accenture, ACS, CSC, EDS, HP and IBM), who
continue to dominate the global outsourcing market in terms of
existing contracts, have won only 10% of mega deals by value so far
this year, compared with an average of 63% over the last four
years. The Big Five Europe (Atos Origin, BT, Capgemini,
Siemens and T-Systems), who dominate ongoing outsourcing service
provision in Europe, have won 27% of mega deals, compared with only
16% over the last five years, reflecting Europe’s increasing
importance at the top end of the global outsourcing market.
In the broader market of deals over €40 million, the 'big six'
maintain more of a dominance, at 41%, albeit they have witnessed a
22% decline in their share this year, compared with the last four
years. The 'big five' have a 13% share of this same market, down
12% on their four-year average.
