IT outsourcing is a trend that has grown enormously over the past decade, and the outlook is equally promising. While that increase was not an explosive one, it should be viewed in light of the outsourcing slowdown during the second half of 1999 due to concentration on the Y2K transition. The two most rapid areas of growth in the IT outsourcing sector are e-business services and applications outsourcing. Thanks to accelerating Internet activity, e-business services are soaring. This approach eliminates the need to be at the client's site.
Clients obtain access to the providers' facilities through the Internet or through leased lines.
Among the providers of these services are USinternetworking and Breakaway Solutions. Among the many companies that use IT outsourcing services are Chase Manhattan Bank, Continental Airlines, Eastman Kodak, Lufthansa, JP Morgan, and Xerox. From an industry perspective, the most prevalent users of these services are the manufacturing and financial sectors. Deregulation has created opportunities for financial firms to offer new products and services in order to gain more stable, fee-based revenues. To focus on new product development and reduce fixed overhead costs, these companies are contracting out their processing work to a wide variety of third parties.