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IT Services Market Endures Dismal 2012

A report from research firm Ovum find that IT contract volume was down 18 percent in the financial services industry in 2012.

Global IT services contract activity in 2012 was at its lowest point since 2002, according to U.K.-based research firm Ovum.

Performance in the three months to the end of December 2012 was far less than in the same period of 2011, ensuring that annual IT services contract activity fell to its lowest level for 10 years, both in terms of total contract value (TCV) and deal volume, according to the firm's research.

[Related: Global Bank IT Spend to Reach $118.6 Billion in 2013]

According to Ovum data, the TCV of deals announced in the fourth quarter of 2012 was $20.8 billion, down 34 percent on the same period of the previous year. Also in that same period, the total number of deals fell 17 percent.

While the total level of activity in the fourth quarter of 2012 represented a slight improvement on the previous three months of the year -- with TCV up 10 percent from the third quarter of 2012 -- the overall TCV was down on the previous 12 months across both the public and private sector, with the private sector enduring its worst year since 1998 in TCV terms, according to Ovum.

According to the firm, the sharpest fall was seen in the services sector, where the number of deals announced fell by 50 percent. In healthcare and financial services, contract volumes were down 39 percent and 18 percent respectively.

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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