Outsourcing prices to drop in 2010

It may be hard to kick the outsourcing habit this year because falling prices make the practice hard to resist. Analysis from ProBenchmark, the pricing subsidiary of outsourcing consultancy Alsbridge, finds that outsourcing prices will continue to head down, although it's not certain for how long.

"How long the economy will be like this and how long client companies will continue to more aggressively [offshore] infrastructure remains to be seen," says Chris Pattacini, ProBenchmarks's director. "It is clear that RIM will continue to proliferate in the market, continuing that downward price pressure, but not as much as last year."

Another factor at play is constant renegotiation of outsourced contracts by vendors looking for the best deal, according to ProBenchmark. While pricing is dicey to predict, ProBenchmark sees some changes in the market:

• Desktop services have been dropping 10 to 14 percent annually and should fall another 7 to 10 percent this year.
• Storage prices are on track to continue their 10 to 14 percent annual decline.

There's one exception to the downward spiral: Virtualization. Virtual service support has been quietly increasing, ProBenchmark says.

For more on outsourcing prices:
- see this CIO magazine article

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