Outsourcing demand remains at ‘all-time high’ — ISG
The demand for outsourcing work remains at an “all-time high” despite the contraction in Europe’s top two economies and fears of a slowdown in the United States (U.S.), said IT research firm ISG.
In an interview with Deccan Herald, ISG principal analyst Mrinal Rai explained that the layoffs at the tech giants are a result of their business models based on their profitability and cost structure.
However, Rai stated that they are not expecting clients to cut down on tech spending in the next few months.
According to the ISG Index, which measures commercial outsourcing contracts with an annual contract value (ACV) of $5 million or more, the ACV for the combined global market during the July-September period was at $23.2 billion, down only 3% from the year-ago period.
And most of the slowdown being seen in the global technology industry is among product companies and software-as-a-service (SaaS) firms, analysts said.
Rai added that the outsourcing industry is set to benefit from the possible recession in the global tech market.
“It will depend on the technology areas in which a company works. In the case of emerging technologies like [the] metaverse, there could be cautious spending. But in areas like remote working and automation, there will be demand. So, we think this will be good for the Indian IT industry,” the analyst concluded.
