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Global Outsourcing Industry Finishes Strong in 2015

Information Services Group (ISG) reported that the global outsourcing industry delivered one of its best fourth-quarter performances ever, fueled by nine “mega-deals” (contracts with an annual value of $100 million or more). Data measuring commercial outsourcing contracts with annual contract values (ACV) of $5 million or more show that fourth-quarter ACV rose 5% to $7 billion, marking the highest quarterly level in the last four years.

Although ACV for the full year fell 8% to $23.7 billion, deal volume in 2015 was at an all-time high. In the Americas, manufacturing had a strong year, with ACV increasing 19% and the number of awards hitting a record high. The travel and transport and retail industries also had a healthy year. Despite the nine mega-deals in the fourth quarter, the trend of smaller, shorter deals continued in 2015. In fact, from 2012 to 2015, the data show that the average ACV decreased by 20% and the average deal length decreased by 15%.

ISG predicts a slow start to 2016, but John Keppel, partner and president of ISG, stated that “more enterprises are sourcing than ever before, and they’re paying less for those services, which encourages them to participate in the sourcing market even more.”

Copyright © 2022 by Morgan, Lewis & Bockius LLP. All Rights Reserved.National Law Review, Volume VI, Number 20
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About this Author

Vito Petretti, Morgan Lewis, Technology Lawyer
Partner

Vito Petretti’s practice focus is technology and outsourcing matters. Clients regularly turn to him to draft and negotiate domestic and international outsourcing service agreements for a variety of business processes, such as information technology, finance and accounting, human resources, and procurement. Within the realm of information technology, Vito drafts and negotiates agreements for software licensing, hardware purchases and leases, data licensing and subscriptions, website hosting and development, and other technology-related agreements, including system...

215-963-5001
Katherine B. O'Keefe, Morgan Lewis, Technology Lawyer
Associate

Katherine B. O’Keefe is part of a team that handles critical commercial transactions that enable our clients to run their business operations effectively. The team is focused on technology transactions, including licensing, services, and alliance deals that involve emerging technologies such as cloud computing, software as a service (SaaS), and data analytics. Our technology, outsourcing, and commercial transactions lawyers assist clients in managing their online presence, from website development, hosting, and maintenance; to privacy and use policies; to data breach and...

215-963-5564
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