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Everest Predicts Restructuring in Outsourcing Market

Trends in the global outsourcing industry point to a market ripe for restructuring, according to a report by market researcher Everest Group.
         “A number of trends are converging and market-changing drivers are coming into play—from the coming of age of the major Indian suppliers to the unbundling of contracts where deal size is getting smaller,” said Peter Bendor-Samuel, chief executive of Everest Group. “Contracts are getting shorter and work is being spread across multiple providers, and large outsourcing contracts signed in the 1990s are coming up for re-bidding. What we are witnessing today is a global industry on the verge of restructuring, which will result in a redistribution of wealth across the entire spectrum of suppliers, buyers and investors.”
         The report noted that competition is heating up as the foreign offshore market prepares to expand into new regions. Major players are buying their way into the HRO market, highlighted by deals such as EDS’ $420 million equity purchase in ExcellerateHR.

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