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.