The annual value of outsourcing deals in the EMEA region rose almost 4% in the first quarter of 2020, but would have grown at a higher rate had the impact of COVID-19 not hit the market in March. That’s according to the latest state-of-the-industry report from global technology research and advisory firm Information Services Group (ISG).
The EMEA ISG Index, which measures commercial outsourcing contracts with annual contract value (ACV) of €5 million (£4 million) or more, shows combined market ACV (including both as-a-service and managed services) in EMEA increased by 3.8% year on year, to €4.5 billion (£3.9 billion). EMEA was on track to deliver 7-9% growth, but demand was curtailed by the pandemic, which first hit the region in early March.
“Cloud is gaining more relevance every quarter as customers move from on-premises, capex driven deals to an on-demand operating model,” said President Steve Hall. “This will only increase as COVID-19 highlights the importance of cloudbased infrastructure.”
Hall expects that managed services should rebound by the second half of the year, “Overall, 2020 managed services ACV likely will be off 7%. In the as-a-service space, we see ACV being up 5% sequentially in the second quarter and up 12% for the full year,” he said.