According to the latest report be ARM Research, there is a constant growth of IT outsourcing this year, especially in the area of software development outsourcing. ISVs start looking for the means of economic recovery and growth of their business and consider outsourcing as one of the factors playing a big role in that effort.
The way companies now look at software development outsourcing has changed. However, though outsourcing is now seen as a way to operate more effectively and be innovative in terms of software product design, it is still regarded as a cost-cutting solution. Companies, as they look for outsourcing service providers, are focused on low-cost offshore and nearshore resources.
As for contracts, in the area of software development outsourcing their amount has dropped at the end of 2008. Organizations were focused mostly on business stability measures, so prices have declined. Now, though the prices are still on the decline, companies looking to renegotiate their contracts should be prepared for longer terms contract and additional vendor services. Outsourcing and offshoring vendors, however, are willing to be more flexible and work on a more performance-based model in order to mitigate risk for clients.
