Increasing competition in globalized markets drives IT offshoring worldwide. In the United States, the relocation of IT activities and processes to low-wage countries like India is already an established business practice, resulting in their leading position in the field of IT offshoring. However, at present, offshoring is gaining increasing recognition in European countries like Germany. A number of German major enterprises are already involved in or are planning offshoring initiatives, while numerous small and medium enterprises (SMEs) are currently considering how best to take advantage of offshoring. In consideration of this development, the following chapter examines company- and economy-related drivers and economic effects of the rising trend to IT offshoring in Germany as well as possible responses by German companies and policy makers.