I had the opportunity today to present some trends in the IT outsourcing industry to Babson's alumni. Let me recap some of the points that I made in my prepared remarks. IT outsourcing is moving from cost arbitrage based thinking to more of a distributed work thinking, where the work gets fulfilled where it finds the right expertise at the right price, availability and the desired quality. Business models have evolved from time and materials based application, development and maintenance projects to things like BPO, Captive services, Remote services management, and KPO. In fact, some vendors are thinking about moving customers dynamically between models based on, say, rupee fluctuations. The third trend is multi-sourcing. Although this concept is old, some interesting developments have occurred here. Even in situations where companies are signing mega deals (over a billion dollars) it is not uncommon to see multiple vendors in the mix. Under these circumstances, it is important to manage the coordination complexity of projects. Firms like TPI and Everest have entered into the ecosystem to help companies reduce the coordination complexity. In addition, collaboration and workflow management tools that help reduce the complexity are beginning to showup in the marketplace.The final trend that is interesting is centered around innovation. As firms use these outsourcing deals to innovate, they involve many vendors with distinct expertise that end up co-creating value. In these circumstances, who owns the IP and how is value shared and appropriated?