IT Services Revenue Way Down: Time To Go Shopping

Now might be a good time for retailers to go bargain-hunting for IT services. Market researcher Ovum reported on Tuesday (August 10) that the total value of outsourcing deals announced during the second quarter of 2010 fell 14 percent from the previous quarter. That decline comes despite the fact the number of deals in Q2 was actually up by 14 percent over Q1 (when the number was the lowest since 2007). Most of that Q2 drop in value was due to smaller contracts with businesses; the government IT services remained steady.

More deals bringing in less revenue? That's right: Crunching Ovum's numbers, the average outsourcing deal in Q1 was $89.3 million, while the average deal in Q2 was all the way down to $67.4 million. Those results suggest that after a terrible Q1, services-vendor salespeople spent Q2 either offering great bargains or desperately booking any revenue, no matter how small the deal. Either way, IT outsourcers appear to be ready to deal.