The top 100 Western European outsourcing deals totalled $40.5 billion in value last year, driven by so-called mega deals.
A new study by IDC found that the largest deals increased in value, with nine mega deals signed for a total of $20.5 billion.
"The largest deals in 2005 got bigger, dispelling the myth of the falling out of favour of the mega deal, and confirming the emergence of large-scale multi-sourcing, with five out of nine mega deals awarded by two government agencies," said Jennifer Thomson, research manager, IDC European Services.
However, she revealed that outsourcing deals are also getting shorter in length because customers are less willing to be tied into contracts for long periods.
"Without the long contract lengths vendors must engineer cost savings in a much shorter time period, while at the same time developing collaborative go-to-market strategies to win in large-scale multi-sourcing," she added.
The study also revealed that IBM has lost pole position in the Western European top 100 outsourcing deals regarding aggregate value of deals. While the company signed 14 deals in 2005, more than any other vendor, the aggregate value was not enough to offset larger-scale wins by BT Global Services and EDS.
In addition, the study highlighted positive growth rates in BPO (Business Process Outsourcing) across Western Europe, especially within the UK.
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