Asia-Pacific impacted by the global slowdown

Asia-Pacific appears not to have avoided the fallout of the current negative global economic
conditions, according to Ovum.

In a new report*, the independent technology analyst firm states that engagements in the Asia-Pacific market are being slightly delayed, becoming re-scoped and having a greater cost management focus.

Jens Butler, Ovum IT Services analyst and author of the report, said: “The Asia-Pacific market appears to have hit a speed bump, with a year-on-year drop of 25 per cent during the third quarter of 2011 and a sense that the economic concerns that have hit the rest of the world appear to be filtering through to the Asian growth markets.”

“These markets are not falling into a recessionary tailspin, but the historical double-digit market growth figures are trending closer to high single digits/low teens, as many markets see the current economic conditions as an opportunity to take a breath.”

According to the report, many vendors are taking the current market situation as an opportunity to invest in infrastructure, partnerships and resources in some of the growth markets such asIndia, China andMalaysia.

“64 per cent of contracts signed in the Asia-Pacific services market emanated from the telecommunications sector in the quarter,” Butler added, “with the cash-strapped industries taking a more conservative approach to any form of services investment in the near term.”

The report also reveals that megadeals are not back, but control is consolidating. The “components” of contracts are consolidating under a number of core suppliers with 60% of contracts signed in the past 3 years having a single “prime” vendor for the majority of the services put to market.

Butler concluded: “Some industries are consolidating their sourcing contracts more than others – with energy, healthcare and retail following the traditional “bundlers” of manufacturing and the public sector.”

-ENDS—

NOTES TO EDITORS

*Asia-Pacific IT Services Quarterly Briefing, 3Q11

To arrange an interview or for further details regarding this release, please contact Delphine Jersier in the Ovum press office on +61 (0)3 9601 6725, or email delphine.jersier@ovum.com

 

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is an Informa business.