All things considered, 2008 was a relatively stable year for the IT services industry. Deals got smaller and shorter, but they grew in number. The second tier providers and Indian vendors did well, along with Accenture and IBM Global Services. The outlier was EDS, where weakness led to its acquisition by Hewlett.IT outsourcing providers were largely unscathed by the economic downturn throughout much of the year. "It took almost two quarters for the effects of the slowdown to manifest in providers' financial statements," says Eugene Kublanov, CEO of San Ramon, Calif.-based outsourcing advisory NeoIT. By the end of this year, however, CIOs became too distracted by the economic destruction surround them to do any outsourcing deals. "As the markets crumbled and CIOs were confronted with the prospects of their personal employment, naturally, decision-making around strategic cost cutting and efficiency took a back seat," says Kublanov.
That's all poised to change in 2009. The only problem is, that may be bad news for both IT services providers and their IT leader customers.
