The $90 billion global IT outsourcing market will witness continued fragmentation of mega deals.

This is expected to increase the market share of the Indian top 5 service providers - and even tier II IT companies - as the market shifts from being concentrated in the hands of the US top 6 players (IBM, Accenture, EDS, CSC, HP and ACS) to domestic firms.

The global outsourcing market has seen the 'most ever' changes in the restructuring of mega deal contracts in 2006 with the trend moving towards shorter durations and from mega-deals to mega-relationships.

"While the number of contracts awarded has increased by three per cent, the total contract value of broader market contract awards has decreased by eight per cent in 2006," according to TPI index data.

This has resulted in more service providers competing for and winning market transactions, Sidharth Pai, managing partner, TPI India, which was the consulting company for the $2.2 billion ABN Amro in 2005 deal said, "The number of different SPs who won different contracts has increased from 55 in 2002 to 90 in 2006 for us."

Since 2004, the top 5 Indian SPs are finding a mention in mega deals. "There has been a five-fold increase in the value of transactions of the top 5 SPs from 0.5 per cent of our total transactions in 2004 to 2.5 per cent of our $19 billion pipeline in 2006. Also they now feature in 15 per cent of our 73 transactions, a threefold increase from 5 per cent in 2004," said Pai.

Last year, Wipro created a specialised team called large deals team, which focuses on winning large deals for the company ranging between $100-300 million.

Sudip Banerjee, president - enterprise solutions, Wipro Technologies, said, "Earlier Indian companies were not doing large deals, but now large deals have become an integral part of growth. We are not only being called for negotiations, but also winning and executing large deals."

India's IT Inc is looking beyond its forte application development and maintenance where it has a sizeable 36 per cent market share same as the global big 6 to cover integrated deals that require consulting and BPO services and even new verticals like infrastructure.

N Chandrasekaran, global head of sales and operations, Tata Consultancy Services, India's largest IT services company's third quarter results affirmed the trend in its quarter three results, "The company's integrated full-services model, including business intelligence, consulting, infrastructure and assurance services, is driving growth with large customers leading to a 50 per cent jump in the number of customers with over $50 million in annual revenues to 15 during Quarter 2."

The company's acquisitions of five large engagements in its Q3 results includes two of over $100 million and three of over $50 million.

Even Satyam's Q3 results stressed upon the growing importance of mega relationships and resulting penetration in accounts for the company.