A year ago I asked the question: Is Offshoring a Disruptive Technology, in Clay Christensen's definition?

• Does it come in from the bottom, bringing a lower cost solution to those lower profit customers that can deal with a lesser capability set?
• Does it eat its way up the market chain, taking higher profit customers as it adds capabilities and matures in performance?
• Do the incumbent players retreat up the market chain, protecting their higher profit customers and creating more complex solutions that less customers can plug into?
• Is the end result a major market loss in share and revenue for the incumbents? Does the market reset itself in pricing and value, tier-by-tier, as the disruptive players drive out the incumbents?
  

 Well, it appears the answer is Yes. TPI's latest quarterly report on outsourcing shows a collapse in global market share of over 25% for the big players - Accenture, IBM, EDS, CSC - in favor of the Asian outsourcers. The number and value of US outsourcing deals has plummeted 70%, and shifted towards Europe and Asia.

 All of these dynamics favor the new disruptors, who have successfully introduced more services and capabilities to get to work that was previously thought to be the hunting ground of the large players. They have also successfully targeted non-consumption, areas of work that were commonly assumed to be un-sourceable 10 years ago.

As the cost advantage goes away in the next 5 years, the market will stabilize, and a new game will be afoot. The Asian outsourcers, structured and managed as monolithic service machines, will be freshly challenged by smarter customers, new distributed sourcing models, web services automation, and a shift towards modular and horizontal companies.

Welcome to the role of incumbent.