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ISG Index™: As-a-Service Activity Lifts Overall Asia Pacific Sourcing Market in Second Quarter

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ISG expands quarterly ISG Index™ with release of 2Q16 market data

New data reveal record growth of As-A-Service segment

In Asia Pacific, strength in IaaS overcomes lackluster market for traditional sourcing; traditional contract volume falls to eight-year low

BANGALORE, India /PRNewswire/ — Information Services Group (ISG) (NASDAQ: III), a leading technology insights, market intelligence and advisory services company, today released the findings of its 2Q 2016 Asia Pacific ISG Index™, which include, for the first time, a view of the growing As-a-Service market.

The Asia Pacific ISG Index™, which measures commercial outsourcing contracts with an annual contract value (ACV) of US$5 million or more, shows combined second-quarter ACV for the region – representing both traditional and As-a-Service sourcing activity – reached US$1 billion, up 13 percent from the same period in 2015. Traditional sourcing values remained flat year on year while the As-a-Service market, at US$400 million, was up by 42 percent.

Over the first six months of the year, the Asia Pacific market generated a total of US$1.8 billion in ACV, up 7 percent compared with the first half of 2015. This increase was fueled by a 38 percent increase in As-a-Service ACV. Traditional outsourcing value, though remaining within a tight band of US$500 million – US$600 million for the sixth consecutive quarter, fell 7 percent for the period and the 67 contract awards was the lowest number recorded in eight years.

With ACV of US$600 million and just 51 contract awards, Information Technology Outsourcing (ITO) sunk to its lowest point since the first half of 2010. By contrast, Business Process Outsourcing (BPO) activity rose 33 percent compared with the first half of 2015, with ACV reaching US$400 million, as the result of some large awards.

Infrastructure-as-a-Service ACV rose to its highest point ever in Asia Pacific. The US$600 million awarded equaled that of the more established ITO market. Software-as-a-Service values of US$200 million remained largely consistent with the prior-year period.

By sub-region, Australia-New Zealand recorded increases in both value and volume for the half year, while India had its weakest half-year performance in a decade.

By sector, only manufacturing and telecom had ACV growth in the first half of the year. Manufacturing ACV climbed 28 percent year on year to reach its best half-year performance since 2012. Telecom saw a modest 6 percent gain in ACV for the period. The ACV growth in both these sectors was driven by large deal awards, as each saw a reduction in the number of contracts compared with the first half of 2015.

“The Asia Pacific market’s remarkable consistency continues,” said John Keppel, president, ISG EMEA and Asia. “Contracts above US$20 million have all but disappeared from this region in recent quarters. The steady growth of the As-a-Service market, which now accounts for more than 40 percent of the regional total, is encouraging and we expect that percentage to grow in the future.”

About the ISG Index™

Now in its 55th consecutive quarter, the ISG Index™ provides a quarterly review of the latest sourcing industry data and trends for clients, service providers, analysts and the media. For nearly 15 years, it has been the authoritative source for marketplace intelligence related to outsourcing transaction structures and terms, industry adoption, geographic prevalence and service provider performance.

To view an infographic highlighting the major findings of the 2Q 2016 Global ISG Index™, go to

About Information Services Group

Information Services Group (ISG) (NASDAQ: III) is a leading technology insights, market intelligence and advisory services company, serving more than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting and managed services, with a focus on information technology, business process transformation, program management services and enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the deepest data source in the industry, and more than five decades of experience and global leadership in information and advisory services. Based in Stamford, Conn., the company has more than 1,000 employees and operates in 21 countries.

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Source: Information Services Group
Related stocks: NASDAQ-NMS:III
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Written by asiafreshnews

August 31, 2016 at 2:54 pm

Posted in Uncategorized

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