Outsourcing picks up momentum
EMEA market gathers pace as end users look to cost-saving restructuring deals
The EMEA outsourcing market is showing signs of life again as cash-strapped end users turn to restructuring deals.
The total value of €20m-plus outsourcing deals in the region rose 81 per cent sequentially to €10.5bn (£9bn) in the fourth quarter of 2010, according to outsourcing advisory firm TPI.
But that total was still 31 per cent down on the same quarter last year and the market fell 14 per cent to €30bn for 2010 as a whole.
Restructuring deals comprising renegotiations or renewals more than doubled in 2010 to account for a third of overall spend (€11bn), as commercial clients squeezed their suppliers.
IBM was the main beneficiary, nabbing restructuring deals at ABN Amro, Danske Bank and Nordea Bank.
John Keppel, president of Information Services at TPI, told ChannelWeb: "The market is bigger and more mature so the restructuring scope coming to market is increasing.
"But the spike we have seen in the last couple of years is primarily due to organisations looking for quick costs savings, particularly in the IT outsourcing market. They are going back to their provider and retendering or restructuring earlier than they might have done to get savings."
Keppel said restructuring deals were typically just 20 per cent of the market.
TPI noted that the UK's commercial outsourcing sector fell for the second year running, but that public sector grew, accounting for more than three-quarters (77 per cent) of the total.
Across Europe, the financial services industry performed especially well, added TPI, with close to €10bn of contracts awarded last year, amounting to an annual rise of 29 per cent.