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Gartner says offshore work is booming

Don't put all your eggs in one basket

By Kelly Fiveash • Get more from this author

Posted in IT Channel, 11th December 2007 17:22 GMT

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India will likely remain the offshore king when it comes to firms farming out IT skills abroad, but businesses are increasingly looking to spread the risk by adopting several locations, according to Gartner.

The IT analysts predicted today that in 2008 offshore spending was set to boom by 40 per cent in the US and 60 per cent in Europe.

The US remained, perhaps unsurprisingly, the offshore buying capital of the world.

Gartner reckoned that the likes of Brazil, China, Argentina, Mexico, Chile, Vietnam and Russia were all providing "credible alternatives" to India. Each of those countries made it into the analysts' top 30 list.

Canada, despite scoring low on cost of labour, came out on top in the Americas as the number one spot for offshore work from the US.

It also said that US firms were increasingly looking for Spanish language from their providers because of a growing Latin-American workforce.

Gartner research VP Helen Huntley, who co-authored the offshore report, told The Register that firms were increasingly moving into more than one outsourcing location to avoid putting all their eggs in one basket.

She said: "I think it's largely they want to spread their risk. So, is it going to make sense to invest all in one country especially if something were to politically or geographically happen in that country? Many think it makes more sense to distribute that service around different locations."

Asked if the likes of China could overtake India in the offshore market, Huntley explained that although it was performing well, China remained at an entry point on both the number of resources and providers it had to offer potential customers.

She said that India's offshore market was already at a mature stage having moved up a scale in their service delivery.

"I don't think China will ever overtake India on offshore", she added. ®

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