IT outsourcing spending growth continues

IT outsourcing contracts signed in Europe in the first three months of 2014 see high growth

The high growth in the number and value of IT outsourcing contracts signed in Europe in the first three months of 2014 continued through to the six-month point.

According to ISG, the first six months of 2014 has seen the most spent on IT outsourcing since the financial crisis of 2008.

The total amount spent on IT outsourcing was €5bn in the three months from April to June. This is a 32% increase on the same period last year. ISG reported in April that, in the first three months of this year, €2.4bn was spent on IT outsourcing – a figure 29% higher than last year.

More than half of all global outsourcing value was awarded in the Europe Middle East and Africa (EMEA) region.

Businesses in the UK, the largest market in the region, spent €1.4bn, an increase of 6% compared with the first half of last year. Despite the value increase in the UK, just 83 contracts were signed compared to 92 in the same period last year.

David Howie, partner at ISG, said growth will continue: “EMEA continues to maintain its leading position in the global outsourcing market. The region’s increased contract volume and value in the first half was driven by a rise in demand from continental Europe, most notably France and Germany. 

"Looking ahead, we’re seeing a great deal of transaction activity in the market that should come to fruition in the second half of 2014. Taking the year as a whole we would expect contract value in the region to comfortably exceed 2013 levels.

“Overall, we’ve seen a good performance across EMEA this quarter – and not just because last year’s weak second quarter makes this year’s results shine. The market is moving in the right direction, and the first-half year-on-year comparison is testament to the market’s strength.

“Solid performances in volume and value across most industry sectors give us confidence that this is not simply a blip.”

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