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Cloud-based outsourcing in the EMEA surpasses €1 billion

Tuesday 16th  May, 2017

According to the findings by research and advisory firm ISG, the annual value of cloud-based services in the EMEA region surpassed €1 billion for the first time, a sign such as-a-service offerings are growing in importance.

The EMEA ISG Index™, which measures commercial and public sector outsourcing contracts with an annual contract value (ACV) of €4 million or more, shows that the combined commercial market reached €3.5 billion in the first quarter of 2017.

The 'as-a-service' market, which uses cloud computing solutions to provide IT services externally, has taken off over the past two years. Traditional sourcing still dwarfs as-a-service in EMEA – a point of difference between this region and the Americas and Asia Pacific regions.

Public sector ACV in EMEA declined sharply in the last 12 months. The €6.3 billion of ACV awarded was down by almost half compared with the previous year, due to a slow-down in contracting brought about by political uncertainty across Europe. Going forward, the public-sector market should return to its usual €8 billion - €10 billion mark.  

The UK registered its highest ever ACV in a quarter, with €1.4 billion awarded. This follows three consecutive weak quarters in 2016 as UK businesses slowed their spending due to uncertainty over political and technological change.

John Keppel, partner and president of ISG, said: "There is a lot to be positive about, with the EMEA market showing strength in both traditional sourcing and as-a-service contracting. After a slow start, as-a-service continues to go from strength to strength. As a result of this and some robust activity in traditional sourcing, we expect high single-digit gains in the EMEA market for the rest of 2017."

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