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More Opportunities Come To IT Solutions Providers

|Includes:ACN, CGBWF, CSC, Gartner Inc. (IT)
By Jamee C.

Outsourcing solutions providers have maintained the interest of many professionals and experts on the industry primarily because of its unpredictable movements within the industry. A movement in an industry can be considered to be an indicator of growth, and it is most common that despite having a negative impression, it will lead to something positive for the industry.

Back in 2006, Gartner (NYSE:IT) issued a press release stating that it is likely that Europe will play a major role in the growth of the outsourcing industry, and that the United States will continue to be a key player as well. Fast forward to the present, and now there is indeed a growing interest from European companies looking to partner with solutions providers, either near-shore or offshore, with much of the focus on outsourcing information technology (IT). ihotdesk reported recently the UK is considered to be a top destination for employment in the IT sector with work opportunities in abundance. However, the UK seems to be coming short in terms of skilled employees, particularly in this area, hence the prevalence of IT outsourcing in the country.

 (NYSE:ACN) recently entered into a five-year partnership with Denmark-based company, Carlsberg( CPH:CARLB), according to a statement by the company. Carlsberg, who is known for its beverage brands, has chosen Accenture to work with them in the IT aspect of their operations. It was also reported that Accenture’s facilities in India and Denmark will be handling the Carlsberg account.

On another aspect of the European outsourcing trend, it seems that not only companies are looking at delegating their tasks to a solutions provider, but the local governments as well. In support of this, Outsourcing Center published an article wherein Kevin Schatzle, President of Allied Digital Services (BOM:532875), stated that IT will attract the government and education sectors to outsource and it will reap great benefits. Steria (EPA:RIA) and Capgemini greeted this new year with a six-year contract, amounting to €120 million, to cover IT solutions for a branch of the French Ministry of Budget and Government Accounting. This is not the first time that the companies have worked with French local government units as Steria and Capgemini have worked with them for a number of projects since 2001. According to the press release, the reason the government chose Steria and Capgemini is their knowledge of the “ins and outs” of the public sector.

Moving to a different region, US-based company, Computer Sciences Corporation (NYSE:CSC) recently closed a deal with the U.S. Air Force that may span for three years, amounting to a total value of $30 million. The contract will cover cyber-security services for the 33rd Network Warfare Squadron by Computer Sciences Corporation. The company has been working hand-in-hand with the US Air Force for more than 12 years already, handling network quality and security services for the said government branch.

We are still at the first quarter of 2011 and it looks like that this year will give IT outsourcing solutions providers new ground where they can further develop and improve their market offerings.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.