Poor Q4 makes 2012 a year to forget for IT services

IT outsourcing

Poor Q4 makes 2012 a year to forget for IT services

Karl Flinders

The number and total value of IT services contracts signed in 2012 was the lowest since 2002, following a collapse in spending in the last three months of the year, according to global research from Ovum.

The final quarter of last year saw the value of IT services contracts signed off total $20.8bn, some 34% lower than the same period a year ago.

Private sector spending on IT services in 2012 was the lowest recorded since 2008.

“The ongoing economic uncertainty afflicting key markets for IT services, such as the US and Europe, was a major factor behind the weak performance of the industry in 2012,” said Ed Thomas, an analyst in Ovum’s IT Services team. 

“Our research suggests that many enterprises remain wary of committing to major projects, with issues such as the Eurozone crisis having a particularly significant impact," he said.

"In addition, public sector activity has reduced as many governments come under pressure to cut public spending in the face of high debt levels, leading to a general reluctance to get involved in large-scale IT services deals,” he added.

The services sector signed 50% fewer deals in 2012 compared with 2011, while financial services IT services deals fell 18%.

Europe accounted for 45% of global contracts signed by private sector companies, but the total value of European private sector deals fell 31% to $16.7bn.


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