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Freelance & Outsourcing Industry: Difference between revisions
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==== Q1 2023 ISG Index ==== | ==== Q1 2023 ISG Index ==== | ||
Data from the ISG Index, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more<ref>https://ir.isg-one.com/news-market-information/press-releases/news-details/2023/Global-Spending-on-IT-and-Business-Services-Down-8-in-Q1-ISG-Index-Finds/default.aspx</ref> | Data from the ISG Index, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more<ref>https://ir.isg-one.com/news-market-information/press-releases/news-details/2023/Global-Spending-on-IT-and-Business-Services-Down-8-in-Q1-ISG-Index-Finds/default.aspx</ref><ref>https://isg-one.com/docs/default-source/default-document-library/1q23-isg-index-presentation.pdf?sfvrsn=4439d631_0</ref> | ||
Global spending on IT and business services in the first quarter fell sharply from an all-time high in the prior year, as modest growth in managed services failed to overcome continuing weakness in cloud demand | Global spending on IT and business services in the first quarter fell sharply from an all-time high in the prior year, as modest growth in managed services failed to overcome continuing weakness in cloud demand | ||
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* During the first quarter, 703 contracts were signed, down 1.5 percent against record volume in the 2022 first quarter, but up 2 percent sequentially. | * During the first quarter, 703 contracts were signed, down 1.5 percent against record volume in the 2022 first quarter, but up 2 percent sequentially. | ||
* IT outsourcing (ITO) ACV rose 7 percent, to $6.8 billion, fueled by growth in application development and maintenance (ADM) services, which advanced 23 percent in the quarter and now represents more than 65 percent of ITO ACV. | * IT outsourcing (ITO) ACV rose 7 percent, to $6.8 billion, fueled by growth in application development and maintenance (ADM) services, which advanced 23 percent in the quarter and now represents more than 65 percent of ITO ACV. | ||
* ITO Managed Services pricing continues to fall annually, most deals included Y/Y reductions but typically not in step with market declines. | |||
* Business process outsourcing (BPO), at $3.0 billion, declined 10 percent against a record first quarter in 2022. | * Business process outsourcing (BPO), at $3.0 billion, declined 10 percent against a record first quarter in 2022. | ||
* Provider revenues continue to show steady growth, but provider margins remain under pressure. Right-sizing activities in the market are occurring to improve margins | |||
[[File:Screenshot 2023-06-15 123314.png|center|thumb|719x719px|https://isg-one.com/docs/default-source/default-document-library/1q23-isg-index-presentation.pdf?sfvrsn=4439d631_0]] | |||
===== As-a-service (XaaS) Segment ===== | ===== As-a-service (XaaS) Segment ===== | ||
* ACV was $14.3 billion, down 13 percent, the fourth consecutive quarter of sequentially declining results following a record first quarter in 2022. | * ACV was $14.3 billion, down 13 percent, the fourth consecutive quarter of sequentially declining results following a record first quarter in 2022. | ||
* Infrastructure-as-a-service (IaaS) fell 16 percent, to $10.4 billion, the second straight quarter of declining year-over-year ACV in this segment. | * Infrastructure-as-a-service (IaaS) fell 16 percent, to $10.4 billion, the second straight quarter of declining year-over-year ACV in this segment. Cloud consumption is slowing | ||
* The Big Three hyperscalers saw their combined ACV drop 12 percent in the quarter, the first time they have experienced declining quarterly ACV versus the prior year. | * The Big Three hyperscalers ((AWS, Azure and GCP) saw their combined ACV drop 12 percent in the quarter, the first time they have experienced declining quarterly ACV versus the prior year. | ||
* Software-as-a-service (SaaS), likewise, saw a drop in ACV in the first quarter, down 4 percent from the prior year, to $3.9 billion. | * Software-as-a-service (SaaS), likewise, saw a drop in ACV in the first quarter, down 4 percent from the prior year, to $3.9 billion. | ||