European outsourcing spend up 14% in three months

Mega-deals are driving increased spending on outsourcing in Europe, which had the highest total spend of all global regions in the third quarter

Mega-deals are driving increased total spending on outsourcing in Europe, which had the highest total spend of all global regions in the third quarter of this year.

European businesses increased outsourcing investments by 14% in the third quarter of 2012, compared to the previous three months, but spent 12% less than the same period a year ago, according to the latest TPI index.

The research from Information Services Group (ISG) also revealed that mega-deals fuelled the rise in Europe with over half of global mega-deals, worth over £80m, signed in the region. Globally, the number of mega-contracts signed in 2012 is up 60% and has already surpassed the full-year total in 2011.

Monitoring deals worth over €4m a year, the research found that a total of €2bn was spent in Europe on outsourcing in the quarter.

“As third quarters are typically the weakest of the year, the European market’s performance was especially impressive,” said ISG EMEA partner Duncan Aitchison. 

“Despite trading conditions remaining difficult amid continued economic volatility in the region, we have detected a renewed appetite for outsourcing as this year has progressed.”

In July, in its first half of 2012 report, ISG said IT outsourcing contract values hit their lowest in five years as fears over the stability of the Euro restrain European business spending.

It revealed the amount spent on outsourcing in the UK was down 12%, to €5.7bn, compared with the same period the year before. The UK started the year badly according to ISG’s previous report.



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