This report investigates renewals coming up in the outsourcing market in the next 18 months starting April 2013. Analyses shared include average deal sizes, durations and numbers across industries, geographies, functions, and service provider categories. The report also covers renewal trends such as the increasing churn across large global services engagements

1. Topic: Impending Contract Renewals:
“A Futuristic View of the Renewals Market Place”
Copyright © 2013, Everest Global, Inc.
EGR-2013-4-PD-0868
Information Technology Outsourcing (ITO)
Market Report: May 2013 – Preview Deck

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EGR-2013-4-PD-0868
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EGR-2013-4-PD-0868
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Background and methodology of the research
Background of the research
 The sourced services is a large US$400 billion market with deals lasting for an average of two to three
years. As a result, a large portion of the market scope comes back to the planning/negotiation table as
contracts keep expiring. Most of the deals had originally been procured via a competitive process involving
Request for Proposals (RFPs), capability assessment, and short-listing of service providers
 Renewals and recompetes provide opportunity for non-incumbent players to expand their wallet shares
amidst disruptive factors such as saturation, slowing growth rate, and newer and more agile competitors
etc. It also allows buyers a chance to make course corrections based on lessons learned during the lifetime
of the just-concluded engagement and adjust sourcing strategy to suit current business environment
 End-of-term assessments on the part of buyers also bring newer solutions within contention. For example, a
traditional infrastructure deal being serviced by a full-service MNC provider may now be open for pitch by
offshore service providers. There may also be scope for next generation IT technology paradigms, such
as, cloud computing, to play a significant role. This research provides an analysis on the impending
renewals in the coming 12-18 month period, focusing on the assessment of one large ITO engagement
coming up for renewal
The scope of this report includes:
 Analysis of the ITO and BPO markets with deals in scope that are to renew in the future
 Key vertical, geographical, and scope-based trends
 Observations on how future renewals might look
 Implications for key stake holders

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EGR-2013-4-PD-0868
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Removed deals that expired before April 1, 2013
 This research only focuses on deals that will renew
in the future, specifically after April 1, 2013
The analysis shared in this report is based on Everest Group’s
“Transaction Intelligence Database”, the most comprehensive
organized record of publicly announced outsourcing deals
Removed defense and government deals
 Such deals usually are different from the regular
commercial outsourcing contracts with very different
sales diligence, contract scope, and set of providers
specially targeting this segment of buyers
Filters
Removed pure telecom and consulting deals
 Telecom deals differ in key characteristics,
specifically, they are, typically, voice network and
equipment maintenance deals
 Consulting deals are usually one-time contracts
Removed deals that cannot be categorized
 Certain deals cannot be categorized due to lack of
sufficient information. This report ignores such deals
4,358 contracts
3,059 contracts
2,694 contracts
2,612
contracts
The analysis was performed on 2,612 outsourcing deals that expire on or after April 1, 2013
Across nine industry buckets
Four geographical regions
Seven ITO towers and four
BPO functions in scope
TI database
1
2
3
4
Accounts for
more than 30%
of the entire
sourcing market

5. Copyright © 2013, Everest Global, Inc.
EGR-2013-4-PD-0868
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Table of contents (page 1 of 2)
Background and methodology 5
Summary of key messages 7
Section I: Overview of contracts nearing end of term 10
 Summary 11
 Trends by cumulative total contract value among deals up for renewal 12
 Overall outsourcing renewal trend 17
 ITO renewals (global) 18
 BPO renewals (global) 19
 Industry-wise renewal trends 20
 Geography-wise renewal trends 21
 Renewals in defense and government sectors 23
 Renewals by telecom service providers 25
Section II: Deep-dive into upcoming renewals by scope 26
 Summary (ITO trends) 29
 ITO trends by industry 30
 ITO trends by geography 34
 ITO renewal opportunities by industry 39
 ITO trends by service provider category 40
Topic Page no.

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Table of contents (page 2 of 2)
Section II: Deep-dive into upcoming renewals by scope (continued)
 Summary (BPO trends) 45
 BPO trends by industry 47
 BPO trends by geography 51
 BPO trends by service provider category 54
Section III: Future renewals – peek under the hood 56
 Summary 57
 IO deals – geographical trends 59
 ADM deals – geographical trends 63
 Offshore service providers replacing incumbent MNCs 66
 Prominence of GICs 68
Section IV: Implications for key stakeholders 69
Appendix 73
 Glossary of key terms 74
 ITO research calendar 76
 Recommendations 77
Topic Page no.

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Summary of key messages (page 1 of 2)
 IT contracts will witness a dip in average deal size during the "12-18 month"
period
 Telecom has large sized IO and ADM deals for renewal in the next 12 months
while manufacturing has large sized bundled deals for renewal in the same period
 Large multinational providers dominate renewal spending among IT contracts
Deep-dive into
upcoming renewals
by scope – ITO
Overview of
contracts nearing
end of term
 During next 18 months, over US$90 billion worth of IT and BPO contracts
will be up for renewal
 BFSI, manufacturing and telecom will drive IT renewals in the next 18 months
while BFSI dominates BPO renewals
 Western Europe will have greater proportion of renewals, however, of smaller
average size as compared to North America
This report investigates the contracts that are going to come up for renewal during the next 18 months starting
April 1, 2013. It provides analysis of IT and BPO deals along a number of silos e.g., industry, geography, and
service provider category. Additionally the report offers a more detailed look into deeper level trends in IT
contracts reaching end of term.
Some of the findings in this report, among others, are:

8. Copyright © 2013, Everest Global, Inc.
EGR-2013-4-PD-0868
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Summary of key messages (page 2 of 2)
 Contracts with datacenter or network in scope will have the highest frequency
among IO renewals in the next 18 months while contracts with maintenance in
scope among ADM renewals will witness a spurge in frequency in the
"12-18 month" period
 In the recent past, renewals with incumbents have been going down. Earlier, 95%
of renewals used to stay with incumbents as opposed to 75 to 85% currently
 Global In-House Centers (GICs) are slowly regaining prominence as service
providers are losing parts of contracts to them
Future renewals –
peek under the
hood
 Among the single-tower BPO deals, HRO and contact center contracts will drive
renewals in the next 18 months
 BFSI and manufacturing will see most action on the BPO front
 Unlike IT contracts, BPO contracts will witness a jump in average size during the
“12-18 month” period
Deep-dive into
upcoming renewals
by scope – BPO

9. Copyright © 2013, Everest Global, Inc.
EGR-2013-4-PD-0868
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This study offers four distinct chapters providing a deep dive
into key aspects of the global sourcing market; below are four
charts to illustrate the depth of the report
Source: Everest Group (2013)
IT renewals by scope of service IT renewals opportunity
IT renewals by industry vertical Deep dive into impending ITO renewals
Sum of TCV of deals for renewal
US$ billion
Deals currently running with said tower in scope
Number of deals
All impending renewals
Datacenter
Desktop
Network
Helpdesk
Application…
Application…
Consulting
0-12 months 12-18 months
Bundled
ADM
IO
IT renewal opportunities by vertical and scope
Deal renewal volume
Dealrenewalopportunity
Low High
High
Industry BB
Industry AA
Industry DD
Industry CC
Industry EE
Industry FF
Industry GG
Industry HH
Industry II
Number of deals for renewal across industries
Number of deals
BFSI
Energy & utilities
Healthcare
Manufacturing
Retail
Services
Technology
Telecom
Travel & transport
Others
ADM
IO
Bundled

10. Copyright © 2013, Everest Global, Inc.
EGR-2013-4-PD-0868
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ITO research calendar
Topic Release date
Published Current
November-2012Application Services – Crowdsourcing or Outsourcing
December-2012IT Services Landscape – Market Size, Trends, and Buyer Insights
Q2-2013Consumerization of IT – Enabling Enterprise Mobility
Application Outsourcing Market Update 2013 Q2-2013
Infrastructure Outsourcing Market Update 2013 Q2-2013
Remote Infrastructure Management Market report Q3-2013
Verticalizing Infrastructure Services Q3-2013
IT Service Landscape with PEAK Matrix Assessment 2013 Q4-2013
December-2012Who is Moving Enterprise IT's Cheese?
January-2012Application Services – Past, Present, and Future
March-2012How to Overcome Roadblocks while Shifting to Output-based Pricing?
May-2012Impending Contract Renewals: “A Futuristic View of the Renewals Market Place”
Assessment of RIM Providers Q4-2013
Network Service Outsourcing Q4-2013

11. Copyright © 2013, Everest Global, Inc.
EGR-2013-4-PD-0868
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Additional ITO research recommendations
The following documents are recommended for additional insight into the topic covered in this research report. The recommended
documents either provide additional details on the topic or complementary content which may be of interest
1. IT Services Landscape – Market Size, Trends, and Buyer Insights (EGR-2012-4-R-0809); 2012: Everest Group’s research on IT
services market estimates its size across different service segments, geographies, and industries. It also analyzes the adoption of
next-generation services, buyer sourcing preferences, and deal trends
2. Enterprise Cloud Adoption: Year 2012 in Review (EGR-2013-4-R-0849); 2013: This research, focusing on the cloud adoption in
2012, is a part of the periodic Everest Group Cloud Vista enterprise cloud adoption report. It analyzes various deals signed by service
providers in terms of buyer adoption trends by industry, geography, size, cloud opportunity, roles of the providers, insights on key
deals, etc.
For more information on this and other research published by the Everest Group, please
contact us:
Jimit Arora, VP Research: jimit.arora@everestgrp.com
Chirajeet Sengupta, Practice Director: chirajeet.sengupta@everestgrp.com
Yugal Joshi, Practice Director: yugal.joshi@everestgrp.com
Sivaram S, Analyst: sivaram.s@everestgrp.com
Phone: +1-214-451-3110
Email: info@everestgrp.com
Everest Group
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Dallas, TX 75240

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EGR-2013-4-PD-0868
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