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New Aberdeen Benchmark Report Predicts Massive Shift from Tier 1 Players to Emerging Mid-Tier Providers

A new benchmark report from the Aberdeen Group on Offshore Application Outsourcing points to a significant shift in who will be helping leading corporations with their global sourcing initiatives in the coming years. The study, Who Outsourced the Outsourcers?, included input from more than 250 senior technology executives from leading enterprises.

One of the key findings of the report was a massive shift by clients from using the largest Tier 1 providers to the more nimble, emerging mid-tier players. This data came as a result of a two part question. Survey respondents were asked A) Who are you using today for your global sourcing efforts? and B) Who do you plan to use in the next 12-24 months?

In fact, according to the Aberdeen research, that shift could result in more than a 40% market share realignment away from the large players. Reasons cited by the respondents for a planned move to a mid-tier partner include better responsiveness, enhanced attention from management, and domain expertise.

"Companies want to leverage the deep domain knowledge and experience of their provider," said Ralph Rodriguez, Senior VP and Research Director of Technology Markets, Aberdeen Group. "The research validates that the double-digit growth of the mid-tier players is due, in large part, because of their ability to be more flexible and customer intimate. The trend away from many of the Tier-1 players will continue as they get out-classed on management execution and communication."

According to Syntel President & Chief Operating Officer Keshav Murugesh, this data is consistent with what the company is hearing from new and existing clients.

"Corporations have identified that global sourcing can be a great business enabler, providing enhanced quality, speed to market, cost savings, as well as helping drive innovation," Murugesh said. "In order for a client to derive maximum benefits from global sourcing, they need a flexible, committed technology partner that is responsive to their needs, listens and consults, and works toward a true win-win collaborative relationship. The biggest IT services firms cannot afford to operate with that vision today. I assure you, Syntel can and is."