Asia Pacific managed services market records 14-year lowest level - ISG Index

 KUALA LUMPUR, Oct 30 -- Buffeted by pandemic concerns, the managed services market in Asia Pacific fell in the third quarter to its lowest level in 14 years, according to the latest report from Information Services Group (ISG).

The Asia Pacific ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of US$5 million or more, shows the region’s managed services market plummeted 48 per cent in the third quarter, to US$338 million, worst since 2006. (US$1 = RM4.157)

According to a statement, within managed services, information technology outsourcing was down 50 per cent, to US$277 million, and business process outsourcing was down 32 per cent, to US$61 million.

Meanwhile, ACV for cloud-based services, traditionally the dominant force in the region’s sourcing success, was up six per cent in the third quarter, to US$1.6 billion.

That figure includes infrastructure-as-a-service, up eight per cent, to US$1.4 billion, and software-as-a-service, down eight per cent, to US$222 million—one of its lightest quarters in the last three years.

Asia Pacific’s combined market (both managed services and as-a-service) was down 10 per cent, to US$1.97 billion, despite overall growth in the as-a-service segment.

ISG is forecasting the global managed services market will be down six per cent for the full year, 150 basis points better than its July forecast.

The firm is projecting the global as-a-service market will grow by 15.5 per cent in 2020, up from its 11 per cent forecast in July.

-- BERNAMA