- Managed services segment sees its best quarter in five years

- Combined market reaches record high of US$2.2 billion

The Asia Pacific outsourcing market reached a record high in the second 
quarter, boosted by strong demand for managed services, according to the latest 
state-of-the industry report from Information Services Group (ISG) ( 
https://c212.net/c/link/?t=0&l=en&o=2547559-1&h=3414803521&u=http%3A%2F%2Fwww.isg-one.com%2F&a=ISG 
) (Nasdaq: III) ( 
https://c212.net/c/link/?t=0&l=en&o=2547559-1&h=49913460&u=http%3A%2F%2Fwww.nasdaq.com%2Fsymbol%2Fiii&a=III 
), a leading global technology research and advisory firm.

Logo - https://mma.prnewswire.com/media/454165/ISG_Logo.jpg 

Data from the ISG Index(TM), which measures commercial outsourcing contracts 
with annual contract value (ACV) of US$5 million or more, show second-quarter 
ACV for the combined Asia Pacific market (both managed services and 
as-a-service) reached an all-time high of US$2.2 billion, up 6 percent. It was 
the region's third straight quarter with ACV above US$2 billion, and the fourth 
in the last five quarters above that mark.

Overall growth was powered by a surging managed services segment, which climbed 
15 percent, to US$967 million, its best quarterly result in five years. In all, 
enterprise buyers signed 10 managed services contracts each worth more than 
US$20 million in ACV, double the number of the year-ago quarter. Demand was 
particularly strong in China, South Korea and India, offsetting some weakness 
in Japan and in the Australia-New Zealand market. Despite the surge in large 
contract awards, overall deal volume was down 18 percent for the quarter.

Demand for cloud-based solutions, long the driver of the region's growth, 
produced as-a-service ACV of US$1.3 billion in the second quarter, flat with 
prior year. It was the sixth straight quarter the region surpassed US$1 billion 
in as-a-service ACV, but the first time in 11 straight quarters that 
as-a-service ACV did not establish a new quarterly record. Sluggish results for 
infrastructure-as-a-service (IaaS) in China pushed regional IaaS ACV down 3 
percent, to US$1.1 billion, for the quarter. Software-as-a-service (SaaS), 
meanwhile, rose 18 percent, to US$206 million.

For the first six months of 2019, Asia Pacific's combined market generated ACV 
of US$4.3 billion, up 19 percent. Managed services ACV climbed 22 percent in 
the half, to US$1.6 billion, driven by strong demand from the manufacturing and 
telecommunications industries, which offset weaker results in the region's 
largest sourcing industry, banking, financial services and insurance (BFSI). 
As-a-service ACV for the half reached US$2.7 billion, up 17 percent over the 
prior year. 

"Effectively, the combined sourcing market in Asia Pacific has doubled since 
2016," said Scott Bertsch, ISG partner and regional head of Asia Pacific. 
"Enterprises are modernizing and rationalizing their entire IT estate, with 
cloud migration, open APIs and infrastructure platforming being used to 
increase efficiency, drive growth and enhance the digital experiences of 
customers." 

About the ISG Index(TM)

Now in its 67th consecutive quarter, the ISG Index(TM) provides a quarterly 
review of the latest sourcing industry data and trends for financial analysts, 
enterprise buyers, software and service providers, law firms, academia and the 
media. For nearly 17 years, it has been the authoritative source for 
marketplace intelligence related to outsourcing transaction structures and 
terms, industry adoption, geographic prevalence and service provider 
performance. In 2016, the ISG Index(TM) was expanded to include coverage of the 
fast-growing as-as-service market, measuring the significant impact cloud-based 
services are having on digital business transformation. ISG also provides 
ongoing analysis of automation and other digital technologies in its quarterly 
ISG Index(TM) presentations.

About ISG

ISG (Information Services Group) (Nasdaq: III) ( 
https://c212.net/c/link/?t=0&l=en&o=2547559-1&h=49913460&u=http%3A%2F%2Fwww.nasdaq.com%2Fsymbol%2Fiii&a=III 
) is a leading global technology research and advisory firm. A trusted business 
partner to more than 700 clients, including more than 70 of the top 100 
enterprises in the world, ISG is committed to helping corporations, public 
sector organizations, and service and technology providers achieve operational 
excellence and faster growth. The firm specializes in digital transformation 
services, including automation, cloud and data analytics; sourcing advisory; 
managed governance and risk services; network carrier services; strategy and 
operations design; change management; market intelligence and technology 
research and analysis. Founded in 2006, and based in Stamford, Conn., ISG 
employs more than 1,300 digital-ready professionals operating in more than 20 
countries—a global team known for its innovative thinking, market influence, 
deep industry and technology expertise, and world-class research and analytical 
capabilities based on the industry's most comprehensive marketplace data. For 
more information, visit www.isg-one.com. 

SOURCE:  Information Services Group, Inc.

CONTACT: Will Thoretz
         ISG
         +1-203-517-3119
         will.thoretz@isg-one.com; J

         Jim Baptiste
         Matter Communications for ISG
         +1-978-518-4527
         jbaptiste@matternow.com