Outsourcing service capabilities and market demand have evolved along with rapidly advancing technologies, producing numerous changes in the way that outsourcing contracts are structured, in the way that services are delivered, and in the market's overall competitive landscape. Clients have new requirements as issues such as security gain prominence in the Internet economy. In this bulletin, IDC analysts examine the forces at play in the outsourcing market at the start of 2000 and offer predictions for the rest of the year. Traditional drivers such as cost savings and the ability to focus on core competencies are still relevant in the current outsourcing market. However, the drivers behind the decision to outsource have shifted in recent years, as outsourcing has moved from being primarily a decision based on cost to a more strategic decision to, in 2000 and beyond, a matter of survival.
Technology is key to survival in the Internet economy.
Companies trying to compete in this new world order need help keeping up with fast-moving technology. Need for a strategic partner . IT is core to the business. Shortage of resources . Examples of scarce resources include technological expertise and skilled human capital.