2010 Sees Record Low Number Of Information Technology Deals

Ed Thomas, senior Director at Ovum, said that “The total contract value of deals is up on the first half of 2009. There have been some big deals out there, mainly in the public sector in the UK. We\’ve seen big deals such as Desktop 21 awarded by the UK government to Fujitsu, Atos and HP Enterprise Services. This drives that value up across the region”.

He then went on to say that “The UK has the most mature outsourcing market in Europe, and probably the second most mature in the world behind the US. Companies in the UK are in the second and third generation of outsourcing deals. They are more able to ride out the downturn and the inevitable reduction in deals. There have been some big deals in Germany, but in France in the first half of 2010, we tracked only 13 deals with a total value beneath $200m. It seems organisations in France are still wary of offshore business models, and the downturn has only exacerbated that. The coalition government has imposed a limit of £100 million on future ICT contracts. This is an end to public sector mega deals in the UK. Whether this means we will see more smaller deals remains to be seen. There\’s quite a lot of activity in the Nordic region, not just from local vendors, but Indian companies and international vendors. It\’s a very technologically advanced region. Besides Nokia, there are some large utilities vendors in the region and powerful local vendors such as Tieto”.

It will be interesting to see the number and value of Information Communication Technology deals arranged in the latter part of 2010 and into 2011. With many Governments (in particular those based in the European Union) keen on pushing forward with austerity plans there will be a severe lack of public sector agreements. IT suppliers will be hoping that private sector firms pick up the slack however this may be unlikely.

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