‘Innovation through outsourcing’ describes a firm’s strategy to receive innovation by outsourcing IT or IT-intensive processes to more competent and innovative service providers who, in turn, do not only operate their activities but also improve and innovate for or on behalf of their clients. This strategy has gathered some attention by recent research, though it has almost only examined the client perspective, yet. We contribute to this sub-field of IT outsourcing/BPO research by analyzing vendors’ strategies to improve their innovation capability and thus to be more innovative for their clients. Based on a longitudinal global dataset of 136 outsourcing vendors, we analyze which innovation-enabling initiatives are related to superior firm performance (in terms of revenue growth). We find that particularly employee-involving initiatives are promising: outsourcing vendors that have implemented, e.g., idea/innovation platforms that support employee-driven innovation, receive above-average revenue growth.