The Asia Pacific sourcing market, boosted by growing demand for cloud-based services, had its strongest performance in three years, according to the findings of the 1Q17 ISG Index released by Information Services Group (ISG), a global technology research and advisory firm. Now in its 58th consecutive quarter, the ISG Index provides a quarterly review of the latest sourcing industry data and trends.
The ISG Index, which measures commercial and public sector sourcing contracts with an annual contract value (ACV) of US$5 million or more, shows that the combined commercial market in Asia Pacific reached US$1.08 billion in the first quarter of 2017, up marginally from Q416 and 16% year on year. This was the region's strongest quarter for ACV since the beginning of 2014 and marked the fourth consecutive quarter it had generated values in excess of US$1 billion, a record run for the region.
The jump in combined ACV was propelled by rapid as-a-service growth, up 59% year on year. In the first quarter, the region's 'as-a-service' segment accounted for more than two-thirds of the combined market value while traditional sourcing ACV sunk to its lowest level in a decade.
From a trailing-12-month perspective, the infrastructure-as-a-service (IaaS) market soared 77% while the software-as-a-service (SaaS) market declined 6%. In the traditional sourcing space, information technology outsourcing (ITO) continued its climb out of the 2016 trough, up 8% in the trailing 12 months, while business process outsourcing (BPO) slid by 48% due to the absence of a megadeal to drive performance in the previous 12-month period.
The region's largest sourcing industry, telecom and media, saw robust growth in the trailing 12 months, with as-a-service up 60% and traditional sourcing up 17%. Similarly, financial services also grew sharply, with as-a-service up 49% and traditional sourcing up 10%. Manufacturing, meanwhile, was off sharply from the prior 12-month period, as a 43% increase in as-a-service could not offset a 49% drop in traditional sourcing.
Public sector-combined ACV reached US$3.3 billion in the trailing 12 months, a jump of 23% compared with the previous period. Much of this contract value was signed in Australia and New Zealand, which is the most active region in Asia Pacific for public sector sourcing.
Globally, ACV for the combined commercial and public sector market stood at US$23.4 billion for this quarter. While this performance was up 15% from Q416, it fell short of the US$25.5 billion benchmark reached in Q116. Global as-a-service ACV increased by US$1.3 billion, or 38% in Q117 compared with the same period last year.
posted from Bloggeroid
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