August - 2008 issue > In Focus

By si Team

For the last few months we have been hearing news about several retrenchment measures taken by the IT industry due to the shrinking of margins caused by the so called global slow down. However, a report says that the first half of the current calendar year has seen the IT outsourcing industry posting its strongest performance in a decade.

The industry saw 282 outsourcing contracts valued at $49 billion in total contract value (TCV) and $10 billion in annualized contract value (ACV) during the first two quarters of the current calendar year. It was a year on year (Y-o-Y) increase of 24 percent in TCV and 36 percent in ACV, says TPI, a global sourcing data and advisory firm.

In the second quarter, 146 contracts were awarded in the global outsourcing industry, valued at $25.6 billion in TCV, and almost $5 billion in ACV.

All the measures indicate a noteworthy market strength, as this was the strongest second quarter performance since 2000. Additionally, each of the past three quarters has topped the $20 billion TCV mark. This series also represents the best three-consecutive quarter performance ever.

“The industry has seen the highest number of outsourcing contracts, TCV, and ACV during the first half of 2008 in more than 10 years. At the midpoint of the year, TCV in the broader market is on a trajectory to eclipse the TCV record of 2004, which has been the most prolific full year to date,” says an analysis by TPI.

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