The outsourcing industry is focusing more on traditional business process outsourcing (BPO) capabilities and shifting from the traditional "silo" approach to a utility computing or “on demand” model, says a recent study by IDC.

Information systems (IS) outsourcers are using these new service strategies as a way to better position themselves to win customers and to build market share in key vertical industries, it adds.

It points out that in 2002, there was an increased focus on key verticals not only among key outsourcers, but also by type of offering (BPO versus on demand).

IDC ranks the top US (IS) outsourcers across 6 major industry verticals according to 2002 revenues as follows:

" While no major changes to the positioning of these outsourcers by vertical are expected during 2003 into 2004, the shift toward utility computing on demand could very well influence the longer-term positions of outsourcers across vertical industries," said David Tapper, program manager for IT Outsourcing and Utility Services research at IDC. "The reasoning behind this belief is that utility computing and on-demand services are ultimately a direct threat and substitute for the traditional outsourced IT model as well as business process services."