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Are Stumbling EMEA Market Trends temporary?

By ESOutlook | Wednesday, November 29, 2017

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The Europe, Middle East, and Africa (EMEA) region is a thriving region for the As-a-Service market, with record third-quarter spending up by 48 percent, to €1 billion while traditional sourcing saw its worst slump in a decade; falling 43 percent, to €1.3 billion. According to the EMEA ISG Index, the slump has been attributed to the lack of traditional large contracts in the quarter, something that the EMEA relies upon. The resulting loss caused Annual Contract Value (ACV) to drop by 23 percent, translating to a loss of €2.3 billion. ISG attributes this slowdown to the macroeconomic events in the EMEA region—the German federal elections and the continuing wavering doubts over Brexit.

Despite the UK’s weak third quarter, its ACV was up 15 percent year over year to €2.5 billion, while contracts increased to 13 percent. The DACH market’s ACV was down 25 percent to €1.7 billion as a result of slow buying decisions due to the elections. That being said, it is the third strongest year-to-date for the DACH region in a decade. The Financial Services sector in the EMEA region showed strong gains in both the As-a-Service and traditional sourcing, with a year to date investment of more than €2 billion in just the As-a-Service market.

The global numbers though are a stark contrast, with the global ACV up 16 percent over last year to touch the €8.5 billion mark, while the As-a-Service market recorded a high of €3.7 billion. The traditional sourcing market, however, finished the third quarter with a modest two percent growth. 

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