Although most people tend to relate off-shore IT outsourcing market growth to Stateside staff reductions, the latest suggestion is that the growth is being driven more by demand from other off-shore organizations than US-based business. In fact, most of the outsourcing growth is forecast to come from other Indian outsourcing companies, farming out their own operations and development work.

The New York Times is reporting that the Indian IT services market will grow to $11 billion by 2011. The article suggests that companies are having difficulty retaining the necessary talent and that competition among various outsourcing organizations may force some consolidation in the currently extremely fragmented outsourced services market. The usual suspects (IBM, Wipro, and Tata Consulting) hold about 25% of the current services market but one can expect that percentage to climb as those players buy out or displace the many smaller firms in that sector.