Global IT contracts dip 22 percent in first half
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Bangalore: IT industry has reported a dip in total contract value (TCV) by 22 percent in the first half of 2009 as against the first six months (January-June) of 2008. IT industry awarded a TCV of just $20.5 billion in the first half of 2009. According to the report published by TPI, a research and advisory firm, the decline was primarily due to the reduction in mega-deals in Europe, as well as lower spending globally on Business Process Outsourcing (BPO). For the calendar year 2008, the industry had signed $90 billion worth of contracts. Moreover, the annualized contract value (ACV); TCV divided by the duration of the contract, was the largest ever in 2008, at $17 billion. For the first half of 2009, however, the ACV is 28 percent lower year-on-year (YOY). In TPI's view, the IT industry will not be able to match last year's figures. "The first half of 2008 was extremely strong for the outsourcing industry, which makes a YOY comparison tough. Nonetheless, recently we have seen some very early signs of stabilization in Information Technology Outsourcing (ITO) markets, especially in the U.S., which gives us some encouragement that we may be seeing a bottom to the current slump," said Mark Mayo, Partner and President, TPI Global Resources Management. On the brighter side, demand for ITO remained stable, both sequentially and YOY, in the U.S. and the Asia Pacific. For instance, the 26 contracts awarded by transportation companies in the first half of 2009, with buyers in Europe, West Asia and Africa leading the way, represented 44 percent YOY growth. The major Indian service providers like Tata Consultancy Services (TCS), Infosys, Wipro and HCL continue to figure among the top 10 players in the application development and maintenance (ADM) space.

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