Media outsourcing spending by annual contract value (ACV) rose
Telecommunications remains the undisputed champion of outsourcing, with ACV of
These findings are included in the 2014
"Media companies are expanding the scope of their activity beyond ITO and are now using outsourcing to support their strategic repositioning in response to the digital disruption in the industry," said ISG Chief Research Officer
There were equal amounts of volatility (double-digit ACV swings in 11 of the 27 industries) and stability (12 of the 27 industries saw ACV changes of 5 percent or less) in outsourcing activity in the last year. Overall, losers (those with declining ACV) outpaced winners (those with increasing ACV) by a margin of 2 to 1, with an overall average decline in ACV of 4 percent among the 27 industries studied.
Spending was subdued in most verticals as clients took advantage of intense service provider competition and cheaper cloud computing and X-as-a-Service (e.g. Software-as-a-Service, Infrastructure-as-a-Service, Business Process-as-a-Service, etc.) offerings to reduce their service delivery costs.
While it was challenging for service providers to grow ACV in most verticals, outsourcing penetration overall continued to rise. Currently, 45 percent of the world's largest public companies have an active outsourcing contract, up from 40 percent in 2010.
Keywords for this news article include: Software, Telecommunications,
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