This IDC Presentation provides an analysis and assessment of application outsourcing (AO) deals based on a rolling four-quarter view for 1Q10–4Q14. In the application outsourcing deal-making world, which includes both traditional application management and hosted application management, service providers have continued to encounter a challenging deal-making environment. After-shocks of the financial crisis, modernized application outsourcing and management delivery models, and tightened access to capital are changing the AO market. Each major geographic region has reacted to the recession differently, especially in highly regulated industry verticals such as government, healthcare, and utilities. These changes not only shifted a number of historical deal metrics such as contract length, annual total run rate, and deal size but will also affect upcoming renewal opportunities.
By leveraging IDC's BuyerPulse Services Deals Database, the world's largest database of services deals containing more than 48,000 contracts, this IDC Presentation provides an analysis and assessment of application outsourcing deals based on a rolling four-quarter view from 1Q10 through 4Q14 (period ending December 31, 2014).
IDC analysis shows that success in AO deal making will require service providers to standardize and automate their service delivery as well as expand their go-to-market approaches. In particular, this analysis of application outsourcing signings addresses the following questions:
- Where are the best opportunities across key segments, including deal sizes, industries, and outsourcing markets by U.S. and worldwide views, that can drive revenue expansion?
- What are the strategic trends and directions in key deal metrics, such as total contract value (TCV), average deal lengths, annual contract value, and average run rates, needed to architect deals?
- What types of large application outsourcing deals are coming up for renewal, and where are they coming from?
- How are customer needs shaping deals, and are there disruptive events and factors in the market to which vendors will need to take action to ensure success in winning future deals?
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