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IT Outsourcing Deals Drop for Q3

by: Sarah Joson

Thursday, December 13, 2012 | Outsourcing News |

Lowest number of deals in the IT outsourcing market

A study done by analyst firm Ovum showed that the global IT outsourcing market’s total contract value (TCV) has fallen by 75 percent in this year’s third quarter. It was also indicated that the figures posted are the lowest level for the segment in nine years.

Ovum noted that from last year’s third quarter, the TCV of IT services contracts fell 33 percent this year, same period, with 18.9 billion (£11.7 billion).

Moreover, the third quarter of 2012 showed the lowest number of deals with 332, from 438 contracts posted during the same period last year. However, the lowest is still 324 contracts tracked during 2007’s Q4.

However, Ed Thomas, an analyst at Ovum, said the signs of recovery for the IT services market during the second quarter of 2012 were not seen during the third quarter of 2012. The industry would have to work twice as hard on improving the TCV and volume of deals if it wants to at least match last year’s statistics.

Europe was identified to have dominated the contracts belonging to the private segment but activity dropped for the IT providers’ market which is North America.

For the global public sector, Q3 of 2012 posted a TCV of $10.6 billion (£6.6 billion), a decline of 43 percent. The volume of deals also fell 22 percent to 195 for the same period last year.


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