ISG: Rebound for EMEA sourcing at year’s end

Monday, January 22, 2018

The sourcing market in EMEA ended 2017 on a high note, “with double-digit growth in both traditional and as-a-service contracting values” according to the 4Q17 EMEA ISG Index published by Information Services Group (ISG). After a mid-year slump the market was up 27% sequentially in the final quarter, according to the Index (which tracks commercial outsourcing contracts with annual contract value (ACV) of over €4m), with the as-a-service sector growing by a record €1.1bn.

The results show a continuation of the trends which have been dominating the sourcing landscape in recent times, with “traditional” sourcing in significant decline (ACV dropped for the fourth year in a row “despite a slight increase in the number of contracts) but with that slack being more than picked up by as-a-service spend (especially the infrastructure-as-a-service market which grew by 58% year-on-year to hit €3bn); this picture was mirrored elsewhere in the world, according to ISG, with as-a-service overtaking traditional models in both the Americas and APAC at the end of last year.

Steven Hall, partner and president, ISG, said: “Despite a dip in the third quarter of 2017, the market recovered in the final quarter and demonstrated steady overall performance for the year. It is especially heartening to see the adoption of cloud-based services accelerate across the region, following a slow start in previous years. European businesses are seeing the potential of new technologies to help them on their digital transformation journeys, while reducing costs and improving agility. Macroeconomic uncertainty across Europe makes the business of predictions tricky. Nonetheless, the trend towards as-a-service is one we can expect to see accelerating over the next 12 months, with consistent growth of 20 percent or higher for the as-a-service market.”