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Europe sees huge outsourcing surge

The third quarter of 2013 saw the highest number of IT outsourcing contracts ever signed in Europe, says ISG

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The third quarter of 2013 saw the highest number of IT outsourcing contracts ever signed in Europe, according to the latest figures from Information Services Group (ISG).

Of a total of 176 outsourcing deals, worth €2.8bn, 125 were for IT outsourcing, worth €2.3bn. The value of IT outsourcing contracts signed was the second highest recorded in a quarter, and was 177% higher than the previous quarter with almost double the number of deals.

Nine of the 10 global megadeals, which were worth over €80m, were in Europe.

“EMEA [Europe, the Middle East and Africa] achieved the highest third-quarter results on record, a strong rebound from the weakness observed in the first half of the year,” said John Keppel, president ISG North Europe. 

“While the improvements we are seeing are in comparison to weak performances in the first half, we believe the high level of contracting activity speaks volumes about the underlying strength of the current market,” he said.

The UK showed strong third-quarter results with contract value of €680m, which was 35% higher than the previous three months. However, Germany led the region’s growth, posting €810m in actual contract value (ACV) and surpassing the UK for the first time.

The financial services sector quadrupled its spending over the quarter, recording its largest ever third quarter result.

ISG expects the upturn to continue. 

“Casting a look ahead to the final quarter of this year, we predict a continuation of the healthy contracting activity just witnessed," it said. "However, the protracted global weakness of the first half of the year remains a drag on actual contract value levels. While we expect the year to finish strongly, it may be down somewhat compared with 2012.”

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