Almost three-quarters of the top 100 outsourcing deals in Europe, worth $23.4bn, were made up by six mega-deals.
According to a report from IDC, UK telecoms company Cable & Wireless topped the European list by spending $3bn on a deal which gave IBM Global Services (IBMGS) responsibility for application development, product support and business process consulting for 10 years.
UK companies led the way in Europe, accounting for 39 per cent of all deals, ahead of second placed Germany with 11 per cent. On a worldwide basis, just under $100bn was spent on outsourcing in 1998, but this is expected to rise to more than $151bn by 2003. The amount of international deals is also on the up, with two of the six European mega-deals being global contracts.
The report also highlighted a significant shift in the origin of the largest outsourcing deals.
Mirko Lukacs, manager of the European consulting and management services programme at IDC, said: "None of the mega-deals were won in the manufacturing sector, which accounted for more than a quarter of the agreements in 1998. This shows the mega-deal activity is shifting towards industries such as banking and telecoms."
One area of steep decline was in the government sector, which represented only 15 per cent of the deals in Europe, a 50 per cent drop from the previous year.
TOP 10 EUROPEAN OUTSOURCING DEALS OF 1998 No Vendor Client Value 1 IBMGS Cable & Wireless $3bn 2 TranSys consortium London Transport $1.6bn 3 Siemens Business Services National Savings $1.5bn 4 EDS Banca di Roma $1.5bn 5 Sema Group Dept of Social Services $500m 6 ICL Dept of Trade and Industry $330m 7 FI Group First BankingSys, Bank of Scotland $246m 8 IBMGS IS Consortium Caricentro $235m 9 IBM UK Equifax $220m 10 Siemens Business Services UK Passport Agency $220m
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