Almost daily, it seems that domestic private equity firms, from Blackstone Partners to General Atlantic Partners and Sequoia Capital, are directly entering the outsourcing world. Meanwhile, existing companies already in the midst of the outsourcing fray are now in merger mode, able to reach sky high multiples seemingly overnight. And why not? Emerging countries such as India and the Philippines have a now burgeoning middle class, and can squarely thank outsourcing.

Many companies diversify risk by load balancing their outsourcing to several different vendors. However, what happens when your several outsourcing vendors becomes just a few? What are the risks associated with fewer rather than several? Or one?

In all likelihood, the risk is minimal, given that your business has done its due diligence. Conceivably, fewer vendors in the mix could result in monopolies and higher rates. But the reality is that more investment, meaning more dollars and more rupees and more euros, means better and stronger vendors capable of delivering better productivity, better services and most likely better costs.

Fear not the news of mergers, nor investment by Sand Hill Road or elsewhere, investment of any sort into outsourcing will only result in better capitalized companies, better able to create value. Which results in more profitable companies that are better able to provide best in class services at best in class pricing.