IT Services market grows in middle of 2012

Channel News

Driven by a spate of big deals

The IT services market is beginning to see a hint of positivity following a few dark months at the start of 2012, analyst house Ovum has said.

In a new report, Ovum said the total contract value (TCV) of deals announced in the second quarter of this year  was $34.8bn, up 82 percent on the same period last year and the highest quarterly figure since the fourth quarter of 2010. It said the rise was as a result of a number of contracts valued at $1 billion or more – known as megadeals. These included two significant awards by US defence agencies.

In all, six megadeals were recorded during the quarter, one more than in the previous four quarters combined.

Ed Thomas, Ovum analyst and author of the report, said that although the growth in TCV was driven by public sector megadeals, there was also a strong activity in the private sector, with the key North American market building on its improved performance in the first quarter of 2012.

The company added that the IT services industry remained heavily dependent on its two most mature markets: the US and UK, making up 80 percent of this market, there was two large deals centred around Brazil.

Europe and Asia Pacific contributed six percent and four percent respectively of sales with  Europe leading the way in the private sector with a 38 percent share of TCV in the second quarter of 2012. North America accounted for 33 percent, South and Central America 18 percent and Asia Pacific 10 percent.

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