{"id":629565,"date":"2023-04-15T09:49:44","date_gmt":"2023-04-15T14:49:44","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/04\/15\/global-spending-on-it-and-bpo-down-as-cloud-deals-slow\/"},"modified":"2023-04-15T09:49:44","modified_gmt":"2023-04-15T14:49:44","slug":"global-spending-on-it-and-bpo-down-as-cloud-deals-slow","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/04\/15\/global-spending-on-it-and-bpo-down-as-cloud-deals-slow\/","title":{"rendered":"Global spending on IT and BPO down as cloud deals slow"},"content":{"rendered":"<div id=\"content-header\">\n<h2>Spending on IT and BPO services drops as demand for cloud services slows <\/h2>\n<\/div>\n<div id=\"content-center\">\n<ul>\n<li><i data-icon=\"1\"><\/i><\/li>\n<li><i data-icon=\"2\"><\/i><\/li>\n<\/ul>\n<div id=\"contributors-block\">\n<p><img decoding=\"async\" src=\"https:\/\/cdn.ttgtmedia.com\/rms\/computerweekly\/Karl-Flinders-profile-pic-2022-140x180px.jpg\" alt=\"Karl Flinders\">\n\t\t\t\t\t<\/p>\n<p><span>By<\/span><\/p>\n<ul>\n<li>\n\t\t\t\t\t<a href=\"https:\/\/www.techtarget.com\/contributor\/Karl-Flinders\">Karl Flinders,<\/a><br \/>\n\t\t\t\t\t\t<span>Chief reporter and senior editor EMEA<\/span>\n\t\t\t\t\t\t<\/li>\n<\/ul>\n<p>\n\tPublished: <span>14 Apr 2023 10:41<\/span>\n<\/p>\n<\/div>\n<section id=\"content-body\">\n<p>Spending on IT and business process outsourcing (BPO) services dropped sharply in the first quarter of this year as spending on cloud services slowed.<\/p>\n<p>According to the latest figures, ISG revealed that $24bn was spent on IT and BPO globally, an 8% decrease from the same period last year.<\/p>\n<p>ISG records all deals struck that are worth over $5m to come up with the total actual contract value for a given period.\u00a0Spending on cloud-based as-a-service offerings by organisations during the first three months of this year was $14.3bn, a 13% drop from the <a href=\"https:\/\/www.computerweekly.com\/news\/252511911\/IT-and-business-services-hit-record-levels-in-2021\">record high of a year earlier<\/a>. Meanwhile, more traditional IT services, known by ISG as managed services, were up 1% at $9.bn.<\/p>\n<p>Steve Hall, president at ISG, said the results are a tale of two markets: \u201cOn the one hand, we saw record-high actual contract value in the managed services sector this quarter, fuelled by continuing demand for applications and engineering services \u2013 a clear sign that ongoing digital transformation is alive and well.<\/p>\n<p>\u201cOn the other, the cloud services market has seen its blistering growth slow considerably in recent quarters as enterprises slow the pace of migrations and look to optimise existing workloads in response to the uncertain economic environment.\u201d<\/p>\n<p>During the first quarter, there were 703 managed services contracts signed including eight mega-deals, worth more than $100m per year, as well as 237 restructured contracts worth a record $4.0bn.<\/p>\n<p>IT outsourcing, which falls within the managed services category, saw \u00a36.8bn in spending, a 7% increase on the same quarter last year. ISG said this was driven by growth in application development and maintenance services. Within this segment, organisations spent $3.0bn on BPO during the quarter, a 10% against a record first quarter in 2022.<\/p>\n<p>According to the ISG findings, cloud services spending has now <a href=\"https:\/\/www.computerweekly.com\/news\/252522740\/Global-IT-services-market-shows-signs-of-slowing\">fallen four quarters in a row<\/a> after hitting its peak in the first quarter of last year. Infrastructure-as-a-Service (IaaS) spending fell 16% to $10bn in the first three months of 2023. Software-as-a-Service (SaaS) spending was down 4% to $3.9bn<\/p>\n<p>\u201cWe see enterprises focusing on optimising the cloud-based services they have already committed to, rather than adding new workloads to the cloud,\u201d said Hall.<\/p>\n<p>He said the large cloud suppliers are being forced to cut costs as demand for their services slows: \u201cOn the cost side, hyperscalers really over-hired during the pandemic, and now they\u2019re adjusting their operational expenses to fit today\u2019s macro conditions and declining demand. That\u2019s one of the reasons we\u2019re seeing layoffs in big tech.\u201d<\/p>\n<p>ISG has lowered its forecast for cloud service spending in revenue growth in 2023. Hall said the fall in cloud contracts is expected to last through the second quarter, with demand picking up again in the second half.<\/p>\n<p>\u201cThe macro environment remains uncertain, with interest rates, inflation and trouble in the banking sector topping concerns for enterprise clients,\u201d said Hall. \u201cThere continues to be more scrutiny on deal signings, especially in discretionary spending areas. Enterprises are revisiting cost optimisation, efficiency gains and vendor consolidation deals.\u201d<\/p>\n<\/section>\n<section id=\"DigDeeperSplash\">\n<h4>\n\t\t\t<i data-icon=\"m\"><\/i>Read more on IT consultancy<\/h4>\n<ul>\n<li><a id=\"DigDeeperItem-1\" href=\"https:\/\/www.computerweekly.com\/news\/252527559\/IT-services-sector-hiring-slows-to-pre-pandemic-levels\"><br \/>\n\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero Images\/people-recruitment-interview-adobe_searchsitetablet_520X173.jpg\" srcset=\"https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero%20Images\/people-recruitment-interview-adobe_searchsitetablet_520X173.jpg 960w,https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero%20Images\/people-recruitment-interview-adobe.jpg 1280w\" alt ><\/p>\n<h5>IT services sector hiring slows to pre-pandemic levels<\/h5>\n<div>\n<p><img decoding=\"async\" src=\"https:\/\/cdn.ttgtmedia.com\/rms\/computerweekly\/Karl-Flinders-profile-pic-2022-140x180px.jpg\" alt=\"KarlFlinders\">\n\t\t\t\t\t\t\t\t\t<\/p>\n<p><span>By: <span>Karl\u00a0Flinders<\/span><\/span>\n\t\t\t\t\t\t\t<\/p>\n<\/div>\n<p>\t\t\t\t<\/a><\/li>\n<li><a id=\"DigDeeperItem-2\" href=\"https:\/\/www.computerweekly.com\/news\/252526170\/Global-IT-and-business-services-spending-slows-amid-economic-fears\"><br \/>\n\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero Images\/IT-outsourcing-offshoring-1-adobe_searchsitetablet_520X173.jpg\" srcset=\"https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero%20Images\/IT-outsourcing-offshoring-1-adobe_searchsitetablet_520X173.jpg 960w,https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero%20Images\/IT-outsourcing-offshoring-1-adobe.jpeg 1280w\" alt ><\/p>\n<h5>Global IT and business services spending slows amid economic fears<\/h5>\n<div>\n<p><img decoding=\"async\" src=\"https:\/\/cdn.ttgtmedia.com\/rms\/computerweekly\/Karl-Flinders-profile-pic-2022-140x180px.jpg\" alt=\"KarlFlinders\">\n\t\t\t\t\t\t\t\t\t<\/p>\n<p><span>By: <span>Karl\u00a0Flinders<\/span><\/span>\n\t\t\t\t\t\t\t<\/p>\n<\/div>\n<p>\t\t\t\t<\/a><\/li>\n<li><a id=\"DigDeeperItem-3\" href=\"https:\/\/www.computerweekly.com\/news\/252522893\/European-IT-services-see-bumper-quarter-but-signs-of-slowing-emerge\"><br \/>\n\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero Images\/outsourcing-digital-map-fotolia_searchsitetablet_520X173.jpg\" srcset=\"https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero%20Images\/outsourcing-digital-map-fotolia_searchsitetablet_520X173.jpg 960w,https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero%20Images\/outsourcing-digital-map-fotolia.jpg 1280w\" alt ><\/p>\n<h5>European IT services see bumper quarter, but signs of slowing emerge<\/h5>\n<div>\n<p><img decoding=\"async\" src=\"https:\/\/cdn.ttgtmedia.com\/rms\/computerweekly\/Karl-Flinders-profile-pic-2022-140x180px.jpg\" alt=\"KarlFlinders\">\n\t\t\t\t\t\t\t\t\t<\/p>\n<p><span>By: <span>Karl\u00a0Flinders<\/span><\/span>\n\t\t\t\t\t\t\t<\/p>\n<\/div>\n<p>\t\t\t\t<\/a><\/li>\n<li><a id=\"DigDeeperItem-4\" href=\"https:\/\/www.computerweekly.com\/news\/252522740\/Global-IT-services-market-shows-signs-of-slowing\"><br \/>\n\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero Images\/Outsourcing-istock_searchsitetablet_520X173.jpg\" srcset=\"https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero%20Images\/Outsourcing-istock_searchsitetablet_520X173.jpg 960w,https:\/\/cdn.ttgtmedia.com\/visuals\/ComputerWeekly\/Hero%20Images\/Outsourcing-istock.jpg 1280w\" alt ><\/p>\n<h5>Global IT services market shows signs of slowing<\/h5>\n<div>\n<p><img decoding=\"async\" src=\"https:\/\/cdn.ttgtmedia.com\/rms\/computerweekly\/Karl-Flinders-profile-pic-2022-140x180px.jpg\" alt=\"KarlFlinders\">\n\t\t\t\t\t\t\t\t\t<\/p>\n<p><span>By: <span>Karl\u00a0Flinders<\/span><\/span>\n\t\t\t\t\t\t\t<\/p>\n<\/div>\n<p>\t\t\t\t<\/a><\/li>\n<\/ul>\n<\/section>\n<\/div>\n<p><a href=\"https:\/\/www.computerweekly.com\/news\/365535256\/Global-spending-on-IT-and-BPO-down-as-cloud-deals-slow\" class=\"button purchase\" rel=\"nofollow noopener\" target=\"_blank\">Read More<\/a><br \/>\n Elroy Damron<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Spending on IT and BPO services drops as demand for cloud services slows By Karl Flinders, Chief reporter and senior editor EMEA Published: 14 Apr 2023 10:41 Spending on IT and business process outsourcing (BPO) services dropped sharply in the first quarter of this year as spending on cloud services slowed. According to the latest<\/p>\n","protected":false},"author":1,"featured_media":629566,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1424,2510,46],"tags":[],"class_list":["post-629565","post","type-post","status-publish","format-standard","has-post-thumbnail","category-global","category-spending","category-technology"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/629565","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=629565"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/629565\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/629566"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=629565"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=629565"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=629565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}