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IT services contract awards fall to lowest level since 2003


The IT services market saw the value of new contract signings fall to its lowest level in more than eight years, according to analyst firm Ovum.

The total contract value (TCV) of deals announced in this period was just $19bn (£11.8bn) – the lowest quarterly figure since 2003, and down 40 per cent on the same period last year.

"The distinct lack of large deals on offer was a major contributing factor, combined with the on-going lack of demand from private sector firms, particularly in the US," said Ed Thomas, Ovum analyst and author of the report.

"In previous quarters, the buoyancy of the public sector outsourcing market has gone some way toward offsetting lacklustre returns from enterprise clients. However, on this occasion government spending on IT services projects also took a hit, with a notable lack of large-scale projects on offer."

Europe generated 58 per cent of private sector TCV in the second quarter of 2011, with the fall in spending on IT services by enterprises most noticeable in North America.

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