Very good interview last week by Stephanie Moore about changes in outsourcing from vendor side and how those changes continue to affect the IT providers. For the service providers who continuously looking to differentiate themselves from the competition - going vertical is the best option!Before customers get to know their service provider, the provider's vertical capability is absolutely the critical differentiator. That is what gives the provider the ability to convince the customer that they understand their industry, therefore they understand their systems, their needs, their requirements, and their specifications. I think that in some specific cases a service provider’s horizontal capability is important but just with customers with very leading-edge technology requirements, since most large ITO providers have a full complement of horizontal capabilities. But I think that once customers know their service providers, either through a very long RFP process or because they have worked with multiple providers for a long time, the largest differentiator is the vendor's ability to provide customer service, customer intimacy, and their ability to help the customer be successful. Without mentioning any names, the vendors who are the most popular and who have succeeded are those who can not only provide vertical domain expertise and horizontal technology expertise, but they have been able to embed themselves in the client environment and help their clients become successful; not only with outsourcing, but with their business strategies and business goals. Ultimately, that becomes the major differentiator.