IT outsourcing increasing at fastest rate since 2010

IT outsourcing increasing at fastest rate since 2010

The amount of IT outsourcing contracts signed across Europe for the first three months of 2014 has grown at its fastest rate for four years, official figures have suggested.

Statistics compiled by market watcher ISG also found that as well as a dramatic increase in the number of contracts signed (21 per cent compared to last year), there was also a noticeable rise in their value.

Contracts signed during the last quarter were worth around €2.4 billion (£1.97 billion), a 29 per cent increase on the same period last year.

In the UK, there were a total of 59 contracts recorded, worth €1 billion, a dramatic rise of 66 per cent compared to the same period in the previous year and the largest amount signed in single quarter for three years.

Germany recorded a slight fall in contract values, with around €330 million in annual contract value (ACV) recorded, down on last year's figure. However, the number of contracts signed increased by 21 percent quarter-on-quarter and rose 52 per cent compared with the first quarter of 2013.

Meanwhile France recorded a large jump in market values for the quarter, becoming the second biggest market in the EMEA region this quarter, recording €630 million in ACV.

There were a number of high-profile deals for outsourcing across the EMEA region, with five contracts coming in at a total value of over €80 million.

John Keppel, president of ISG North Europe, said activity was likely to remain high and the return of large relationship awards was responsible for driving the market.

However, he also warned: “Although these larger contracts have a strong role to play in the market, the smaller deal size brackets will continue to grow more sharply as enterprises opt for greater flexibility and more specialised services from a greater number of providers.

“Multi-sourcing, increasing competition among providers and lower technology costs will continue to be the factors that drive the market for the foreseeable future.”