2021 will have been the year of records for the outsourcing services market in the EMEA zone. Over 12 months, the cumulative annual value (ACV) of service contracts generating at least $5 million in billings per year reached $26.5 billion, i.e. 23% (+29% worldwide) more than in 2020 These data, taken from the ISG Index, are unprecedented, both in terms of growth and turnover. In addition, the study shows that France clearly stood out from the other major European markets with contracts whose VAC jumped 82% to $2.2 billion. In comparison, the increase reached only 2% in the United Kingdom, while the DACH zone fell by 29%.

As-a-service up 41%

Hosted IaaS and PaaS contracts were the main contributors to last year’s growth in EMEA. Their VAC appreciated by 41% to $12.6 billion, driven by the increase in that of IaaS contracts (+44% to $9.2 billion) and, to a lesser extent, by that of SaaS contracts (+ 33% to $3.4 billion). Another major branch of the outsourcing market, managed service contracts recorded an increase of 11% to $13.9 billion in their CAV. The latter thus reached its highest level in ten years. This result was made possible by the dynamism of IT outsourcing contracts (+45% CAV to $11.4 billion), much higher than that of business process outsourcing contracts (+5% CAV to $2.6 billion).

Slower growth in Q4

The ISG Index study shows, however, that the growth of the outsourcing market blunted in the fourth quarter to reach +9% (+11% in France), ie its lowest level of the year. Despite this, the sector’s CAV rose for the first time to more than $7 billion over three months ($7.1 billion exactly). The pace of market growth was slowed by the 16% drop in the VAC of managed service contracts, which represented $3.5 billion over the quarter. This poor performance was largely offset by the 55% increase to $3.6 billion in the VAC of as-a-service contracts. “Managed Services recorded a fifth consecutive quarter of ACV above $3.4 billion. Although down year-over-year, it should be noted that the fourth quarter of 2020 included several mega-deals”, weights Lyonel Roüast, partner and president of ISG for the SEMEA zone.