A/NZ managed services market down 14% during 2022

A/NZ managed services market down 14% during 2022

Despite having its strongest fourth quarter of the year with ACV of US$469 million.

Scott Bertsch (ISG)

Scott Bertsch (ISG)

Credit: ISG

The managed services market in Australia and New Zealand (A/NZ) is down 14 per cent, year-on-year, to US$1.1 billion during 2022, despite being the Asia Pacific (APAC) region’s largest market for deals.

This is according to research firm Information Services Group (ISG), which claimed this took place even with the region having its strongest quarter of the year during Q4, with annual contract value (ACV) – which is measured by the firm from deals consisting of at least US$5 million – of US$469 million.

Managed services across the APAC region meanwhile had an ACV increase by 21 per cent year-on-year and 76 per cent quarter-on-quarter, to US$1.3 billion during the period.

Within the market, IT outsourcing was up 19 per cent, to US$877 million, and business process outsourcing increased 26 per cent, to US$437 million.

“Managed services had its second-best quarter ever, trailing only the second quarter of 2012,” Scott Bertsch, partner and regional leader for ISG Asia Pacific, said.

“The region saw strong demand for infrastructure and managed network services, as well as industry-specific BPO services and facilities management. Nearly 100 managed services contracts were signed in the quarter, a new record.”

For the full year, APAC managed services increased by 9 per cent, to US$3.4 billion, from 273 contracts, which represents a 24 per cent increase compared to the year prior.

As a point of comparison, during the third quarter of 2021, ACV rose by 53 per cent down to US$575 million, which followed a recording-breaking increase a quarter prior to that of 87 per cent to US$929 million.

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