IT outsourcing reaches record levels in EMEA region

IT outsourcing reaches record levels in EMEA region

The values of contracts for IT outsourcing across Europe, the Middle East and Africa (EMEA) have reached their highest level for the first half of the year since 2008, new figures have suggested.

Numbers gathered by the Information Services Group (ISG) suggest outsourcing in the EMEA region now accounts for over half of the overall worldwide value.

Research found that the main driver behind the results was a stronger level of  demand across key markets, such as the UK, Germany and France.

The UK maintained a particularly steady performance, recording an increase in annual contract value (ACV) of six per cent during the first half of the year compared to same period 12 months previously.

Meanwhile, Germany recorded a strong year-on-year increase for the first six months of 2014, with around €740 million (£587 million) worth of contract awards compared to €530 million in 2013.

That level of strength was nearly replicated in France, which has now become the second largest market in the EMEA region with a €930 million ACV, which has mainly been the result of a number of bigger contracts.  

Around 40 agreements were reached during the first half of the year – three times as many as those signed in the first six months of 2013. The report found that the main driver has been the increased level of attention paid by French businesses towards the adoption of new sourcing options such as Software as a Service (SAAS) and other cloud-based solutions.

The overall value of outsourcing contracts in the region  increased by 32 per cent year-on-year to to €5 billion, while the number of contracts increased 25 per cent.

ISG partner David Howie said: "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."