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Here Comes IT: Market Busting Out of Slump

By Craig Galbraith
September 19, 2012 - News

Second-quarter numbers bode well for the information-technology services market, which has been struggling along with the global economy as of late.

New research from Ovum shows that the total contract value (TCV) of deals announced last quarter was nearly $35 billion (U.S.), up 82 percent from a year ago. It's the highest quarterly figure since the fourth quarter of 2010.

Several huge deals helped boost the market, including several worth $1 billion or more. Two of those were with U.S. defense agencies.

"Although the growth in TCV was driven by public sector megadeals, there was also significant activity in the private sector, with the key North American market building on its improved performance in 1Q12," said Ed Thomas, Ovum analyst and author of the report.

Despite two large deals involving Brazilian companies, the IT services industry remains heavily dependent on its two most mature markets: the U.S. and U.K., Ovum said. Those two countries accounted for more than 80 percent of quarterly TCV in April through June.

"North America once again dominated public sector contract activity, with 90 percent of quarterly TCV derived from the region," Thomas added. In comparison, Europe and Asia Pacific contributed just 6 percent and 4 percent, respectively.

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