‘Tier 2 cities witness more interest from ISPs’

In addition,significant tractions were observed in the BFSI,healthcare and technology verticals,according to the Market Vista: Q2 2010 report on global outsourcing and offshoring activity by Everest Group,a global consulting and research firm.

Captive market continued to remain strong and India retained its position as the dominant location in this space,with 37 percentage share. The report also highlighted the trend related to the expansion of global and Indian service providers in Indias Tier-2 locations to support global delivery. Locations such as Jaipur,Ahmedabad,Chandigarh,Mysore and Nagpur are being increasingly leveraged by service providers to expand their offshore operations.

Key highlights of Q2 2010 are as follows:

Outsourcing market witnessed robust growth with 498 reported transactions in this quarter,representing a growth of 12% compared to Q1 2010

Compared to Q1 2010,the BPO market increased by 15% and 33% in terms of transaction volumes and ACV respectively in Q2 2010. Activity in the ITO market declined with ACV reducing by 22% compared to the previous quarter

Market activity in the BFSI (Banking,Financial Services,and Insurance) vertical increased by 41% compared to Q1 although Manufacturing,Distribution,and Retail (MDR) witnessed lower volumes than the previous quarter

Large deals continued to be signed in the public sector (Government and Defense),although its share in total transactions dipped marginally

North America and Europe continue to account for three-fourths of transaction signings,although ACV for Europe decreased by 41% compared to Q1 2010