Our research on IT-services and integrated IT and BPO deals (> $200 million each) signed in 2007 shows that the public sector is the biggest customer of outsourcing services. There’s nothing surprising in that — some of the largest contracts over the years have been signed by the government.
What is also not surprising is that the sector that came in at second place in 2007, in terms of the largest value of outsourced deals, is the financial-services sector. The global financial-services sector (including banking and insurance) signed 13 contracts worth a total value of $8.40 billion.
The largest deal of the financial-services sector was awarded by Prudential, the U.K.’s life insurance and pensions provider, to local provider Capita. The $1.5 billion deal is an integrated IT-BPO deal, and is Capita’s largest win ever.
However, there is a huge gap of $120.60 billion between the total value of contracts (> $200 million each) signed by the public-sector agencies and financial-services companies.
While the first two slots of industries that outsource the most carry no surprise, which are the sectors that follow? At $7.11 billion, the high-tech sector awarded four deals (above $200 million), and as an industry came in at third place.
The largest deal by this sector was awarded by IBM to AT&T (and not to IBM Global Services, the company’s outsourcing arm) for $5 billion. InfoPrint Solutions, a joint venture between Ricoh and IBM, chose to outsource to IBM Global Services for $920 million. The third deal given out by the IT sector was by Sabre Holdings, a distribution and technology solutions provider for the travel industry, to EDS for $630 million. The fourth contract in the sector was signed by AGIS for $560 million, when it chose Fujitsu Services.
At $2.62 billion the health care and pharma sector outsourced the fourth highest value of deals in 2007. This amount comes from three deals (> $200 million) signed last year between AstraZeneca and IBM Global Services ($1.4 billion), Bristol-Myers Squibb and EDS ($715 million), and Novartis and BT ($500 million).
The media and communications sector awarded two deals (> $200 million) last year, and each was a billion-dollar deal. The Nielson Company signed a $1.2 billion deal with India’s TCS for applications management and elements of BPO. For TCS this has been the largest win ever. And, Reuters signed a $1 billion contract with Fujitsu Services for IT-infrastructure services.
The retail and auto sectors also saw billion-dollar deals. There was the KarstadtQuelle-EDS in retail and the GM-AT&T in the automotive sector. Travel and hospitality and aviation are the other industries that saw some large outsourcing deals, but not a single deal crossed a billion-dollar mark.
| Top Deals by Industries |
| Industry |
Customer |
Provider(s) |
Value ($ bn) |
| Public |
The U.S. Government (Alliant program) |
29 firms, including EDS, IBM, Communications Holding, CSC, Lockheed Martin, Unisys |
50.00 |
| Financial services, including banking and insurance |
Prudential |
Capita |
1.50 |
| Technology |
IBM |
AT&T |
5.00 |
| Health care |
AstraZeneca |
IBM Global Services |
1.40 |
| Retail |
KarstadtQuelle |
EDS |
1.00 |
| Media & Communication |
Nielsen Company |
TCS |
1.20 |
| Parameters: IT services; integrated IT and BPO deals; >$200 million Source: Global Services |
