EMEA IT Outsourcing Deals: 2006 Review

With 304 deals closed and spending totaling a little more than €30 billion, 2006 was very similar to 2005, when European firms closed 305 outsourcing deals with a total contract value (TCV) of €33 billion. Infrastructure outsourcing was again the top service category, but it showed a decline from 2005. Telecom and network services were No. 2 in terms of popularity with buyers, perhaps a sign of growing convergence between IT and telecom. Government and public-sector buyers took the lead from their financial services and insurance peers, who saw a surprising decline in activity in 2006; manufacturing was a solid No. 2 here. The UK again outstripped the next three countries combined in terms of deal numbers. The decline in deal length and deal value seen in 2005's year-on-year comparison has stabilized; there was even a small uptick in the number of deals for five to nine years. Deals valued between €51 million and €250 million grew in number. US vendors did well in Europe: CSC took the lead in TCV, with two megadeals with NHS and BAE Systems to the fore. EDS did well for deal numbers, closing 45 deals in 2006.