The top 10 IT-services outsourcing deals (> $200 million) in 2007 accounted for a total value of $115.80 billion. This is almost 74 percent of all IT-services, and IT and BPO bundled deals with a value of more than $200 million signed in 2007.
The largest deal of the year was the much sought after $50 billion Alliant program awarded by the U.S. government. The government chose 29 firms to provide IT-infrastructure support, enterprise integration, applications and products to federal agencies. This single deal alone contributed to almost 32 percent of the total value of contracts awarded last year.
As in the past years, in 2007 as well the top deals were skewed in favor of the public sector. Of the top 10 deals, seven deals worth $107.90 billion were handed out by the public sector. Only three deals, worth $ 7.90 billion, originated in the private sector (IBM, AstraZeneca and Prudential).
Keeping the multivendor deals out, which as expected are huge, AT&T and General Dynamics scored big with their $5 billion deals each. The AT&T-IBM deal is interesting because IBM, itself a network-services provider, chose to outsource to AT&T where previously the same work for the company was being handled by IBM Global Services, the company’s outsourcing arm.
In terms of the duration of these 10 deals, all except the IBM-AT&T deal and the one between the U.S. Department of Defense and the Northrop Grumman-led provider consortium, have the traditional seven years or above duration.
Split region wise, the top 10 deals show another trend — that the U.S.A. continues to be the largest originator of ITO deals, with over 96 percent of the value of these deals coming from U.S.-based customers. Only three deals were signed by non-American buyers: Italy’s Ministry for Agriculture, Food and Forestry Policies, the U.K.’s life insurance provider Prudential and the Anglo-Swedish pharma giant AstraZeneca.
Examining the share of the top 10 deals versus the rest of the IT-services deals reveal interesting results. The top 10 deals took in $115.80 billion, while all the rest combined got only $41.19 billion. This is mostly because the largest deal accounted for a hefty $50 billion.
| Top 10 Deals by value |
| Customer |
Provider(s) |
Value ($ bn) |
| The U.S. Govt. (Alliant program) |
29 firms, including CSC, Communications Holding, EDS, IBM, Lockheed Martin, Unisys |
50.00
|
| The U.S. Govt. (Networx Enterprise) |
AT&T, Qwest, Verizon |
20.00
|
The U.S. Dept. of Defense
|
Five firms, including Northrop Grumman |
15.00 |
| The U.S. Defense Information Systems Agency |
Booz Allen Hamilton, CACI, EDS, Lockheed Martin, SAIC, SRA International |
12.20 |
| IBM |
AT&T |
5.00 |
| The U.S. Dept. of Justice |
General Dynamics |
5.00 |
| Centers for Medicare and Medicaid Services |
16 companies led by Northrop Grumman |
4.00 |
| Italian Ministry for Agriculture, Food & Forestry Policies |
AlmavivA |
1.70 |
| Prudential |
Capita |
1.50 |
| AstraZeneca |
IBM Global Services |
1.40 |
| Parameters: 2007 IT-services deals; integrated IT and BPO deals; >$200 million; Source: Global Services |
