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2010 IT services market ends on a high

09 Feb 2011

According to an IT Services Contracts Quarterly Analysis of Q4 2010, things ended with an unexpected boom reversing a decline in average Q4 value that goes back to 2005.

Industry watcher Ovum found that total contract value for the last quarter of 2010 “soared” to more than US$49 billion, with Asia Pacific responsible for US$2.6 billion, a 25% increase from the previous year’s Q4 signings.

Report author Ed Thomas explained, “2010 went out with a bang thanks to a number of mega-deals announced during the fourth quarter, and it is thanks to a string of large deals that the IT services market both globally and regionally exploded into life”.

Bringing things down to a more local level, Jens Butler, Principal Asia Pacific IT Services Analyst, added the “services market, though not having such a substantial turnaround when compared to global (mainly due to the region coming through the GFC relatively unscathed) has still managed to put in exceptional figures in the last quarter of 2010 and topping off an exceptionally strong 2010 across the region.”

Ovum says that more than 40 deals were signed during the last quarter that averaged above US$60 million and included deals such as the agreements between China Unicom, China Telecom and China Mobile with Alcatel-Lucent.

“One of the major trends in both the global and AP markets has been towards smaller deals, and even with the Q4 deals across AP hitting $60m per deal, this did not halt the decline in average deal sizes falling to under $40m per deal for the year, the first time this has happened since 2003,” Ovum reported.