Gartner's results were announced last week, at the same time that researchers IDC announced that worldwide spending on information systems outsourcing services reached more than $68 billion in 2002 and is expected to surpass $99 billion by 2007.
Gartner conducted a survey of 43 outsourcing providers during 2002.
In that year, 64% of respondents' outsourcing revenue came from large clients (more than $500 million in revenue) compared with 75% in a 2001 survey. Another 36% of the 2002 sample targeted companies with less than $500 million in revenue, compared with 25% in the 2001 sample.
These results were consistent with IDC's findings. It reported a gradual, and, IDC believes, temporary shift, from the signing of large, billion-dollar outsourcing deals to smaller, more focused outsourcing and managed services engagements.
IDC also noted that longer, more complex decision-making processes on the part of buyers are leading to longer outsourcing sales cycles for suppliers.
From a regional perspective, IDC's research shows that the US represented the strongest outsourcing market in the world in 2002, accounting for about 45% of all information systems outsourcing spending.
Gartner's Rebecca Scholl comments, however, that the primary focus of outsourcing activity has been in the area of human resources.
Demand for aggregated HR outsourcing services is becoming more mainstream - the aggregation of multiple HR processes into one outsourcing contract for duties such as payroll, benefits, and HR records management. Also, as outsourcing providers have expanded their offerings, the marketplace has become more competitive.
Scholl comments:
"Users can really begin to choose the service provider that is right for their needs, whereas as recently as a year ago, they were very limited in their options
"At the same time, as service providers ramp up their delivery capabilities, they will be less and less interested in acquiring assets and staff from their clients. The market for HR outsourcing will therefore become more challenging for both users and providers during the next three years."