Asia Pacific Outsourcing Market Growth Hits Record High

Asia Pacific Outsourcing Market Growth Hits Record High

Asia Pacific Outsourcing Market Growth Hits Record High

The outsourcing market in Asia Pacific posted a new record growth of US$2.2 billion, according to a report from technology research and advisory firm Information Services Group (ISG). The ISG Index, which measures outsourcing contracts with annual contract value (ACV) of USD5m or more, showed that second-quarter ACV for the combined Asia Pacific market (both managed services and as-a-service) grew 6%, the region’s third straight quarter to post over US$2 billion ACV and the fourth in the last five quarters above that mark. ISG said the overall market growth was fueled by the growing managed services sector, which grew 15% to US$967 million, its best quarterly record in five years.

ISG added that enterprise buyers signed 10 managed service contracts each worth over US$20 million in ACV, twice the number of the year-ago quarter, with strong demand in China, South Korea and India. However, overall deal volume fell 18% for the quarter despite the rise in large in contract awards, the report said. It added that cloud-based solutions drove the region’s growth, producing as-a-service ACV of US$1.3 billion in the second quarter compared to a flat performance in the previous year. ISG said it was the region’s sixth straight quarter to exceed US$1 billion in as-a-service ACV, but the first in 11 straight quarters that as-a-service ACV did not hit a new quarterly record.

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