cloud sourcing isg one america pandemic [shutterstock: 526112170, I'm friday]
[shutterstock: 526112170, I'm friday]
Cloud Press Release

Americas Sourcing Market Reaches New High In 2020

The Americas sourcing market reached a record high in 2020 as the pandemic accelerated enterprise demand for hyperscale computing and other cloud-based services, according to Information Services Group (ISG).

The Americas ISG Index, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, shows the region delivered a record $30.4 billion of combined market ACV in 2020, up 8 percent, with cloud-based services (as-a-service) up 18.5 percent, to a record $17.9 billion, but managed services down 4 percent, to $12.5 billion.

ACV for Infrastructure as a Service spiked nearly 25 percent in 2020, as enterprises continue to move to the public cloud. AWS, for one, made strong inroads in the media and entertainment industry with recent wins at MGM and ViacomCBS. Among other recent notable deals, PepsiCo migrated its mission-critical SAP workloads to Azure, and Tapestry migrated its S/4 Hana solution to Google Cloud.

Software-as-a-Service ACV also grew in 2020, up 7.5 percent, on the strength of such deals as Dell’s contract with ServiceNow for the Now Platform; SAP’s agreements with HP and Juniper Networks; Salesforce’s deal with NBCUniversal; and Oracle’s contract with Equinix to implement Oracle Fusion Cloud.

Coming off a record third quarter, the Americas delivered mixed results in Q4, with demand for cloud-based services reaching a new high, but managed services slumping to its worst quarterly performance in more than four years. The region generated $7.2 billion in combined-market ACV in the fourth quarter, up 4 percent over the prior year, but down 11 percent sequentially. Managed services fell 17 percent, to $2.5 billion, with IT outsourcing (ITO) slumping 32 percent, to $1.6 billion, even as business process outsourcing (BPO) advanced 38 percent, to $858 million. It was the region’s softest quarter for managed services since the third quarter of 2016.

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