Spending on IT Contracts Down Worldwide

Spending on IT Contracts Down Worldwide

Spending on IT Contracts Down Worldwide
Image via Flickr by USDAgov

According to a new report issued by Ovum, an independent market analysis firm specializing in keeping track of information technologies, telecommunications, and other industries, global spending on information technologies contracts was lower in 2012 than it has been in a decade. This trend was evident in every major market around the world.

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Ovum’s report stated that spending for information technologies contracts in December 2012 was lower than it was during the same time period in 2011, in both terms of total values of the contracts awarded and in the volume of contracts dealt to contractors.

The total value of information technologies contracts in December 2012 was $20.8 billion lower than December 2011, a 34 percent decrease. The number of such deals was 17 percent lower than the numbers from 2011. The trend was also evident in the number of mega deals awarded contractors, defined as contracts worth $1 billion or more.

Companies which typically award contracts to information technologies professionals cited worry over undertaking major projects in light of the uncertain global economy as a large factor in the decline. The Eurozone crisis was also a notable issue for many companies.

Government contracts saw the same decline as the private sector during the same period of time. Most governments reduced the number and/or amount of their contracts awarded due to mounting debt and the fear of inability to repay those debts.

Some North American companies actually did award significant information technologies contracts, most notably the giant manufacturing company Proctor and Gamble. However, this was not an indication of broad differences among North American companies, as those contracts were the exception to the trend, not the rule. The last time the global outlook on information technologies contracts was this low was in 2002.

It’s unclear how much of the decline is an indication that companies are hiring internal IT personnel instead of contracting the work to outside providers. [/show_to]

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