Which way is the wind blowing in the outsourcing market? What’s looming on the horizon in the next five years?

Silicon.com has identified five areas to watch.

Consolidation
Competition for outsourcing contracts is more cutthroat than ever, with a huge expansion in the number of suppliers, so some significant consolidation is on the horizon.

Recent rumors of a merger between information technology heavyweights Infosys Technologies and Capgemini Group suggest that the stars are aligning for some significant marriages. Duncan Aitchison, managing director of business advisory company TPI, told Silicon.com that even if the rumored Infosys-Capgemini merger never materializes, it reflects current “market sentiment.” What’s more, other industry experts are predicting more merger-and-acquisition activity in this sector over the next year or two.

Globalization
There has long been talk of India losing its edge in the offshore-outsourcing market–including warnings of a shortage of skilled workers–but a bigger threat to India’s dominance could lie closer to home. According to a study by analyst IDC, cities in China will overtake their Indian counterparts as top destinations for offshore global delivery by 2011.

While it remains unlikely that China will outstrip India in the outsourcing business overall, the trend is for increasing globalization of the market as more regions seek to cash in on the offshoring boom.

Beyond the so-called BRIC bloc of countries (Brazil, Russia, India, China–or BRICM, if one includes Mexico), developing nations such as Egypt and Poland are emerging as sources of offshore labor. The trend is not only for a “greater pattern of diversity” in the outsourcing sector, said TPI’s Aitchison, but also for greater specialization as smaller players seek to distinguish themselves in an increasingly crowded marketplace.

Person-to-person offshoring
Offshoring is more commonly associated with large-scale business redeployments–the relocation of a back-office function, say, or a whole department. But research suggests that there’s growing momentum for redeployments of a much smaller scale. According to a report by research company Evaluserve, offshoring has reached small businesses and even homes–a trend it dubs “person-to-person,” or P2P, offshoring.

Examples of services outsourced in this way include online tutoring, Web and software development, and writing and translation services. Customers for these services can be small businesses or even individual consumers.

Evaluserve says revenue for this sector stood at more than $250 million between April 2006 and March 2007, and it predicts that the value of the P2P offshoring market will rise to more than $2 billion by 2015.

Green sourcing
Rising energy prices have put ecology issues firmly on CIOs’ radar. But could pressure to demonstrate green credentials influence businesses’ outsourcing decisions as well?

Silicon.com’s CIO Jury–a pool of chief information officers and other corporate IT professionals who are polled on various technology issues–recently revealed that environmental factors play a key role in the selection of technology suppliers and partners.

Virtual worlds
The rise of virtual worlds such as Second Life is making it easier for companies to justify hiring offshore workers for tasks that may include building virtual offices or even working as virtual-world “meeters and greeters.”

The market for outsourced virtual-world services is still very new, but businesses increasingly are taking an interest in the likes of Second Life, so momentum is likely to build.

Last month, news emerged of a partnership between a Chinese online-entertainment company and Entropia Universe, a virtual world with a science fiction theme, to create a virtual economy that could provide as many as 10,000 jobs.

Over the longer term, customer contact jobs, including those for help desk and call center services–could migrate into virtual worlds, where customers can be both informed and entertained.

Natasha Lomas of Silicon.com reported from London.

It’s Weds, Aug 13 at 10:00 PM EDT.

This call is for my monthly Outsourcing Coaching Students only.

If you are NOT one of my students, I’d like to give you a FREE MONTH’S trial. It really is free. All I ask in return is you pay a very small shipping and handling fee which covers the package I send you in the mail ($9.95!) which includes a DVD, Mp3 CD and Transcripts.

Go here to claim your free month trial: http://www.outsourcecoaching.com

I made a funny video showing how freaky John’s hands are. I think the videos are now off the site, but you should watch this video anyways for the laugh.

John talks about outsourcing and how to get software made by outsourcers, which will allow you to get leads and traffic to your sites.

Have you seen the bonuses I am offering when you get John Reese’s Traffic Secrets 2.0 course? Check em out!

Raam has an incredible outsourcing service for internet marketers where he does a ton of stuff for people to get traffic to people’s websites. (if you need more traffic, pay attention to this…)

I recently met Raam, who came to an internet marketing seminar that I was speaking at. We filmed a video there, debunking the Outsource Myth, which many people have stereotyped.

Here is a list of some of the things internet marketers need to focus on to make traffic come to their websites, and by the way… for most Solopreneurs who do all the work themselves or who have multiple online properties, it’s nearly impossible to keep up with all the work. Therefore, the entrepreneur’s business struggles to make sales.

Another thing you need to focus on if you decide to use Raam Anand’s services with Outsource Myth is that you need good converting sales copy on your sites. If you look at Raam’s site, it is very well written and he is a good, persuasive copywriter. So, Raam brings you the traffic, but make sure your page is optimized to do the conversions.

I think Raam is a great guy, he is honest, hard working and has a real business in Bangalore, India with real office staff that go to work for you daily.

Raam and I are talking about the possibility of doing an International Internet Marketing Conference in Bangalore, India, late in the fall of 2008, possibly in November or December.

Tell me what you think? Do you think India is ready for an International Marketing conference?

If you try the http://www.outsourcemyth.com service, let me know how it goes, of if you have used Raam, I invite you to post your experience in the comments section.

• I show you WHERE to find them.
• How to negotiate ownership
• How to pay them fairly
• How to avoid getting ripped off
• How to get 3 people doing the same project so you get the best result
• more details about what the OSR product will be like

I also will be revealing the launch date for the outsource secrets revealed home study and training course.

It’s about to get really crazy…

Hey tell me what you think about the videos, content. Ask me questions.

Knowing what you do daily, and what you can outsource is very important so you have details to provide to people who will be doing your work.

Also, I will prove that hard work is not the answer to getting where you want your small business to go.

How do you get on top of your email account? Watch the video.

You’ll see a great outsourcing case study with Steve Renner, that will help you see how a company is using both employees and outsourcers, which is really eye opening.

Go get a drink and listen to and watch this 12 minute video and apply the information that Kevin has found to YOUR business.