Friday, 06 April 2018 00:19

GlobalData warns 'global IT services contracts value continued to decline in 2017'

By

IT services deals "experienced a steep decline in 2017, both in terms of the number of deals and total contract value (TCV), compared to both 2016 and 2015", according to data and analytical gurus GlobalData.

We're told that "while the TCV witnessed a significant annual decline of 33.3% in 2017 to reach a value of US$61.4 billion, the number of deals announced (4099) saw a considerable decrease of 25.6% in 2017 compared to 2016".

In addition, the "average contract value also took a beating in 2017 compared to the previous two years".

However, GlobalData states that "the average contract duration experienced a slight increase (2%) in 2017 compared to 2016, which shows that companies are still willing to enter into long-term contracts with IT services providers".

What kind of contracts does GlobalData say were in play last year?

Well, the "application outsourcing contracts were at the forefront of the total number of deals signed in 2017, accounting for 38.4%".

Yet, "with respect to the TCV of the deals, infrastructure outsourcing contracts dominated the IT service contracts with a TCV of US$31.8 billion. North America led in terms of the TCV of the contracts announced in the infrastructure outsourcing segment, with a TCV of US$16 billion, followed by Europe with a TCV of US$10.6 billion".

Piyush Sharma, lead technology analyst at GlobalData, said: “Although the TCV of the contracts announced in the infrastructure outsourcing segment was the highest in 2017, it witnessed a considerable decline due to fewer mega deals, meaning deals over US$500 million compared to the previous two years.”

The BPO segment witnessed "the renewal of three large deals (over $100 million) in 2017, compared to only one large deal each in the last two years. While, TCS dominated the BPO segment with respect to the TCV, courtesy of the mega deal it renewed with Nielsen Holdings, Hays dominated the segment on the basis of the number of deals announced in 2017".

Meanwhile, we're told that "the systems integration and consulting segments experienced a considerable decline in their TCVs primarily due to the absence of large value deals compared to nine and 15 large deals in these segments in 2016 and 2015, respectively".

Sharma concluded: “Within IT solution areas, cloud computing and information management/analytics segments dominated the IT services segment in 2017, as enterprises are looking to reduce their capital and operation costs and enhance their decision making process. Moreover, a significant number of deals with a scope of information management are set to expire in 2018, providing opportunities for analytics and business intelligence vendors.”

So, what is GlobalData's "Definition of deal types"?

The company says the following:

  • Application outsourcing deals include contracts relating to application development, application management, application testing, application maintenance and support, and training services.
  • Infrastructure outsourcing deals include contracts relating to data center services, application hosting, desktop support, IT asset management, server management, storage services, communication services, IT security services, among others.
  • Systems Integration deals include systems and custom applications development as well as implementation and integration of enterprise package software.
  • Consulting deals include IS strategy, IT and network planning, architectural assessments, IS operational analysis, technical system and network design, and supplier assessment and maintenance planning.
  • BPO deals include outsourcing of business processes or functional areas (such as logistics and human resources), with performance metrics tied not only to the strategic business value of services provided, but also to customer satisfaction. Based on the business function that is being outsourced, BPO services are segmented into CRM BPO, Finance & Accounting BPO, HR BPO, and Procurement BPO.

GlobalData also has an "IT services contracts database".

The company boasts its "IT services contracts database covers all publicly announced IT services deals valued at more than US$100,000. The database is updated daily, and currently has more than 30,000 IT services contracts across all countries, 21 verticals, and a range of horizontal service lines. In addition, GlobalData’s IT Services Contracts Database is the largest database of live IT services contracts".

More information is available here. 

BUSINESS WORKS BETTER WITH WINDOWS 1O. MAKE THE SHIFT

You cannot afford to miss this Dell Webinar.

With Windows 7 support ending 14th January 2020, its time to start looking at your options.

This can have significant impacts on your organisation but also presents organisations with an opportunity to fundamentally rethink the way users work.

The Details

When: Thursday, September 26, 2019
Presenter: Dell Technologies
Location: Your Computer

Timezones

QLD, VIC, NSW, ACT & TAS: 11:00 am
SA, NT: 10:30 am
WA: 9:00 am NZ: 1:00 pm

Register and find out all the details you need to know below.

REGISTER!

ADVERTISE ON ITWIRE NEWS SITE & NEWSLETTER

iTWire can help you promote your company, services, and products.

Get more LEADS & MORE SALES

Advertise on the iTWire News Site / Website

Advertise in the iTWire UPDATE / Newsletter

Promote your message via iTWire Sponsored Content/News

Guest Opinion for Home Page exposure

Contact Andrew on 0412 390 000 or email [email protected]

OR CLICK HERE!

Alex Zaharov-Reutt

One of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.

VENDOR NEWS & EVENTS

REVIEWS

Recent Comments