In brief: Global IT services sector slumps in Q2

A report by Ovum has indicated an increase on the number of IT services contracts in Q2, however clients are still reluctant to sign large deals

The global IT services sector saw a 14 per cent slump in the second quarter of 2010, despite a relative increase in the number of deals over the period, according to a report from Ovum.

The IT services contracts quarterly analysis Q2 2010 report identified 457 deals produced during the quarter, an increase of 56 over the first quarter, which recorded the lowest figures since 2007.

However, the report indicates the Total Contract Value (TCV) actually fell 14 per cent to $30.9 billion.

Ovum analyst and report author, Ed Thomas, said that while the increase in the number of contracts is positive news, there are still concerns about the scale of outsourcing in the private sector, which saw the TCV fall to $10 billion, or one third of the total value.

The addition of a slump in the first quarter meant the first half of the year meant the sector was in its worst state since 2007.

“Analysis of both IT services deal signings and TCV in the first six months of 2010 reveals an extremely difficult start to the year for vendors," Thomas said in a statement.

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