EMEA Outsourcing Returning to Pre-2015 Levels

ISG Index - Seite 2

Steve Hall, partner and president of ISG, said: "For the past couple of quarters, we've been bracing for the impact of some of the macro risks that could affect the global economy — Brexit, tariffs and trade wars. But the talk about overall market growth has turned surprisingly positive. There continue to be recession concerns in European markets, especially the U.K. and Germany, but overall technology spend remains robust. With the Brexit deadline pushed farther out once again, uncertainty has become the new normal for many businesses in the U.K., and companies seem to be making strategic adjustments."

Globally, managed services ACV was down 3 percent in the second quarter against a very strong 2018 period, but combined market ACV was up 5 percent, driven by 14 percent growth in as-a-service contracting.

Market Insights

Growth in managed services was primarily driven by the Nordics, Benelux and Southern Europe. Managed services ACV in Benelux more than doubled to €384 million (£346 million) in the first half; in Southern Europe by 96 percent, to €545 million (£492 million); and in the Nordics by just over 24 percent, to €972 million (£876 million).

In Europe's larger markets, France's first-half ACV grew 29 percent, to €472 million (£426 million). Overall, the outlook is strong: a total of 43 deals were signed in the first half, which compares favorably with the 27 deals signed in the first half of 2018.

DACH generated €1.4 billion (£1.3 billion) of managed services ACV in the first half, up 3 percent over the prior year on the strength of a robust first quarter. Second-quarter ACV declined 20 percent against a strong 2018 period. The number of deals signed in the first half was up slightly (82 compared with 77 in the first half of 2018).

In the U.K. and Ireland, half-year ACV was down marginally (0.4 percent), at €1.6 billion (£1.4 billion), as the U.K. still feels the impact of Brexit uncertainty. The number of outsourcing deals also was down, from 111 in the first half of 2018 to 97 this year. ISG finds U.K. companies are continuing to exercise caution in their managed services investments, instead focusing spending on new technologies that will increase their agility and efficiency.