CIOs may sign hasty deals for a short-term returns. In a case of what Cohen calls "convenient amnesia," . "Everyone has a gun to their head right now," she says. "But the financial voodoo of outsourcing deals doesn't work. You have to accept the reality that . You can pay it now or pay it later, but you're going to have to pay."

Bad deals can lead to degradation in service performance and price increases down the line. Smart buyers will ask for shorter term lengths, but in times of economic pressure rational thinking is hard to come by. "People do bad deals for short-sighted reasons," Cohen says. "We've seen it before and we'll see it again."

For Vendors: Pain at the Margins

Service providers will be only too happy to sign on any new business in 2009. "They're chasing the albatross of quarter-to-quarter earnings," says Cohen. may do anything for revenue, even if it's outside of their sweet spot. It'll be like 2001 all over again. "It looks like good revenue, but in the later years, the provider starts to see profit problems," says Cohen. Then ."

Providers with cash will be king, giving Indian vendors the upper hand. They may try to buy up second-tier companies in the U.S., Europe and Asia, or buy into deals at a discount, just to get a foothold in the U.S. They will even buy up customer assets, something they've been unwilling to do in the past. "They'll do anything for cash," says Cohen. But as with any other contract, "a deal that looks too good to be true will read better than it lives."