Outsourcing Deals Grow Bigger In Q2

Washington | Updated: Jul 23 2004, 03:15am hrs
Five outsourcing megadeals with a total value of $9.2 billion were inked during the quarter this year, compared to three deals worth $6.8 billion during the same period last year, said a report released by a consulting and research firm. The value of pending deals are on par with last years but TPI, the firm which conducted the study, believes that signs point to even more growth.

The robust award volume of the second quarter, coupled with our pipeline and knowledge of other market activity in this category, gives us a sense of renewed interest in consummating megadeals, TPI managing director Peter Allen said.

During the first half of this year, outsourcing megadeals reached a total of $11.2 billion, compared with $15 billion for the same period last year. And current deals in the pipeline are expected to reach the same level - approximately $20 million - as those that were pending at the same time last year, the report said.

The deals are happening with greater frequency - but at a lesser value than during the DOT-com boom. This comes as the industry works its way out of the economic doldrums that have dogged it since 2000, it said.