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Report: Expect Offshore IT Services Firms To Grow

The market for offshore IT services will continue to grow because of aggressive thrusts into enterprise operations by Indian companies and countered by moves from U.S.-based providers that will beef up their own offshore operations.

That, at any rate, is one conclusion outlined in a report released Tuesday by IDC program manager for Application Outsourcing and Offshore Services Barry Rubenstein.

"The offshore industry was largely built on maintenance," Rubenstein said in an interview. "The next step is for the companies to take more day-to-day responsibility of running (IT.) It will be a transformational engagement." Indian offshore outsourcing companies such as Infosys, Wipro and Patni have already been moving to align their services operations to cater more to customers' business strategies, he said.

Predicting that the offshore IT services market will be worth $29.4 billion in worldwide customer spending by 2010, Rubenstein said all players -- both Indian and incumbents -- are aggressively moving on several fronts to capture as much of the business as possible.

"Offshore vendors are aggressively pursuing outsourcing deals that go far beyond the application maintenance engagements that built the industry," he said.

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