Insourcing Isn't In
When JPMorgan Chase and UBS Warburg scrapped huge outsourcing deals last September, the clamor was that insourcing would gain ground in 2005. But Virginia Garcia, senior analyst, financial services strategies and IT investments at TowerGroup, says the early termination of the $5 billion deal between IBM and JPMorgan Chase, and the conclusion of the Warburg deal with Perot Systems, won't even dent the projected growth for large outsourcing deals.
In fact, the Needham, Mass.-based research firm estimates that outsourced IT spending will increase from nearly $28 billion in 2004 to $49.3 billion in 2008. "There will always be big deals that come and big deals that go," says Garcia. "That's the nature of the business."