It’s been barely one month into the new year and India has seen two of its biggest IT deals - HCL-DSG ($330 million) and Wipro-GM ($300 million). The outsourcing marketplace is all set to witness hectic activity this year with 325 deals worth over $100 billion up for renewal. And a billion dollar deal, especially in the BPO space, may be in the offing, says Global Research director of IDC David Tapper.

“IT deals of more than a billion dollars involve large-scale outsourcing, for which offshore providers will need to expand their capabilities.

However, in the BPO space, Tata (TCS) has come near this with a big contract with Pearl ($847 million) and, as reported in a Business Week article, Genpact exceeded it through its $1.1 billion deal with Wachovia,” Mr Tapper said. He is visiting India for the Nasscom Leadership Forum.

According to TPI, over 293 contracts were signed in 2005, more than in any other year. Of these 70% were small to medium sized contracts (worth $50-200 million), up from 65% in 2004 and 61% in 2003.

“In 2006, there will be a mix of contract signings. While many deals will likely be renewed, some like GM may divide the contracts into several pieces. Indian IT companies will get some of these,” Mr Tapper said.

Offshoring is becoming a permanent component of large IT deals. According to IDC, about 5.1% of the US information and technology services market for 2006 will be offshored. Companies are wary of using the term `outsourcing’ in their press releases fearing backlash and replacing it with euphemisms like `co-sourcing’.

But Mr Tapper thinks otherwise. Backlash from US firms in response to offshoring seems to have subsided. On how professionals will respond to the impact of offshoring, this will be done on an individual basis, Global Research directorof IDC added.

( www.financialexpress.com)