IT services market dealt a bitter blow

Market research company Ovum said that the IT services market in the second quarter was down 40 percent from the year before – the worst result for eight years.

The total contract vlue of deals amounted to $19 billion worldwide – the lowest quarterly figure since Q1 2003, according to Ovum.

The number of deals too fell to 384, the fourth consecutive quarter where there was a drop.

Ovum analyst Ed Thomas said that things had gone from bad to worse in the quarter, with “very weak performance” in contracts. He attributes this to a continuing lack of demand from private sector organisations, particularly so in the USA.

Government spending on IT services projects is a contributory factor to the weak results.

He said that enterprises were failing to spend, particularly so in North America. But Europe presents a different picture and put in the strongest performance worlwide, particularly due to large contracts being signed in Scandinavia.