I wrote last summer about Europe's growing appetite for outsourcing, citing a TPI report that indicated continental Europe accounted for a third of all global outsourcing activity, up from just 12 percent in 2002.

The region's appetite remains healthy, based on a new report from Everest Research that finds 36 percent of outsourcing deals during 2008's first quarter involved European Union countries. Offshoring continues to gain popularity with European customers, according to a silicon.com story about the research, with a dozen outsourcing suppliers expanding their operations to other countries, including India and the Philippines.

Financial services companies were the largest European consumers of offshore IT and BPO services, accounting for more than 14 percent of transactions in Q1, according to Everest Research.

With stats like these, it's no wonder Indian companies are expanding their presence in Europe, with some of them reportedly interested in purchasing European services providers, as I wrote earlier this year. Europe will present a bigger challenge to Indian providers than the more homogeneous North American market, because of its diverse collection of languages, cultures and regulatory requirements.