After a lethargic 2015, the EMEA IT outsourcing market "returned to form" in the first quarter of 2016, according to market watcher ISG.
The overall EMEA outsourcing market – comprising ITO and business process outsourcing (BPO) deals – leapt 19 per cent year on year in Q1 to reach €2.25bn (£1.75bn), with the UK seeing a 10 per cent hike, ISG said.
ISG only tracks commercial outsourcing deals with an annual value of €4m or more, and 97 new-scope deals fitting this description were inked during the quarter across EMEA.
After a spell in the doldrums, the ITO sub-sector rebounded in Q1, growing 20 per cent to reach €1.5bn in annual contract value from 115 contracts, ISG said. This return to form was led by applications design and maintenance work and contracts bundling applications with infrastructure, the market watcher added.
BPO also started the year with its best first quarter since 2012.
The overall market was driven by restructuring deals, however, with the number of new-scope contracts actually falling, ISG cautioned.
"As forecast by ISG, 2016 got off to a strong start in EMEA. The increased ACV and contract activity in the first quarter are a welcome contrast to 2015's sluggish start and suggest a healthy market flow for the region," said John Keppel, partner and president of ISG (pictured).
"The strong year-on-year growth in ITO value and volume suggests that technology solutions continue to have a positive impact in many areas, even as work increasingly is moved to the cloud."
The EMEA results mirrored a 20 per cent rebound in the market at a global level, with annual contract value hitting €5bn worldwide.
Deal levels in EMEA should remain in "positive territory" for the year, Keppel said.
"We see consistent demand in the UK and pockets of increasing long-term demand across several of the smaller EMEA markets," he added.
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