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ISG Index™: Asia Pacific Market Soars to New Record on Strength of As-a-Service and Traditional SourcingSYDNEY, Oct. 24, 2017 /PRNewswire/ -- Asia Pacific's sourcing market soared to a new high in the third quarter, propelled by record as-a-service spending and a traditional sourcing market that was at its highest level in more than three years, according to the findings of the 3Q17 Asia Pacific ISG Index™ released by Information Services Group (ISG) (NASDAQ: III), a leading global technology research and advisory firm. The ISG Index™, which measures commercial sourcing contracts with annual contract value (ACV) of US$5 million or more, shows the combined commercial market in Asia Pacific (including both as-a-service and traditional sourcing) reached US$1.5 billion in the second quarter, up 43 percent over the prior year. It was the sixth successive quarter in which the region's ACV exceeded US$1 billion, a sign of a continuing robust market for sourcing services. As-a-service ACV reached a record $689 million, up 37 percent, while traditional sourcing ACV rose 49 percent, to $783 million, its highest level since the second quarter of 2014. For the first nine months, combined ACV rose 25 percent, to $3.7 billion, with the as-a-service market climbing 39 percent, to a record $1.9 billion, and the traditional market advancing 13 percent, to $1.8 billion. Year to date, as-a-service sourcing was fueled by a robust Infrastructure-as-a-Service (IaaS) market, which reached a record US$1.6 billion, up 44 percent. Software-as-a-Service (SaaS), rose 19 percent to US$345 million. Traditional sourcing was paced by Information Technology Outsourcing (ITO) spening of US$1.4 billion, up 32 percent. A record 116 ITO contracts have been signed year to date, with Application Design and Maintenance (ADM) driving a significant share of both contract volume and value. Business Process Outsourcing (BPO), meanwhile, fell 27 percent, to US$381 million. By industry, financial services (ACV of US$807 million, up 47 percent), business services (ACV of US$657 million, up 32 percent) and manufacturing (ACV of US$637 million, up 20 percent) were among the year-to-date growth leaders. Telecom and media, long the largest sourcing sector in Asia Pacific, was off 21 percent, to US$521 million in ACV, despite 21 percent growth in as-a-service sourcing, as the industry goes through a round of consolidation and retrenched spending. Asia Pacific's robust performance mirrors that of the global market. Global ACV reached US$10.7 billion in the third quarter, up 16 percent over the prior year. As-a-service sourcing continued its rapid growth, reaching a record high of US$4.7 billion in the quarter, up 43 percent. Traditional sourcing, meanwhile, had modest growth, nudging up 2 percent year over year, to US$6.0 billion. "Asia Pacific continues to embrace cloud-based solutions to a greater extent than other regions, with as-a-service sourcing accounting for 52 percent of the region's ACV through the first nine months of 2017. That's not to say the region is abandoning traditional sourcing; quite the contrary, the past two quarters have seen traditional sourcing ACV at among its highest levels ever, particularly in the ANZ and ASEAN sub-regions," said Lisa Borden, partner and head of ISG Australia and New Zealand (ANZ). "Going forward, we see continued strength in the as-a-service market, especially, through 2018." About the ISG Index™ About ISG Logo - https://mma.prnewswire.com/media/589060/ISG_LOGO.jpg |