A quarter of European IT jobs will be based in the developing world by 2010, according to a new report.
India will continue to be a leader in the outsourcing market
India will continue to lead the outsourcing market, but will face more and more competition from Russia and China, UK research firm Gartner said.
Newcomers, including Malaysia, Poland, the Baltic states and the Czech Republic, will win a greater share of the market, the study found.
Countries will also seek to offer different specialist services.
"Companies in the Philippines, for example, may decided to concentrate on call centres and then that will inevitably cause people to transfer activity over," said Ian Marriott from Gartner.
"Ireland and Israel have emerged as key locations for packaged applications... while Russia has built a reputation for high-end software engineering."
Bangalore's has developed its own 'Silicon Valley'
In Western Europe, British firms are most likely to outsource work, followed by Germany, Switzerland and Austria, then France and Italy.
Even by next year, 30% of leading European countries will outsource some of their operations.
But Mr Marriott said in the short-term there is likely to be a backlash against the shifting of so many jobs overseas, as well as cases of outsourcing projects failing.