Managed services deals tipped to increase in 2024
- reported on IT-Online
Managed Services Deals in 2023:
- According to IDC Services Contract Database:
- About 1,800 managed services deals were signed.
- Total value exceeded $100 billion.
Deal Trends:
- Decline in the total number of deals compared to 2022.
- Average deal size remained consistent.
- Increase in large deals (TCV > $100 million) in 2023.
IT Spending and Focus:
- IT spending by organizations is on the rise.
- Larger investments in cloud and AI services.
- AI-enabled services gaining traction.
Regional Insights:
- US:
- Over 45% of global TCV.
- Notable contracts:
- AT&T and Ericsson: $14 billion.
- Verizon Business and HCL Technologies: > $2 billion.
- CoreLogic and Cognizant: $1 billion.
- Western Europe:
- 42% of global TCV in 2023.
- Significant increase from 2022.
- Strong growth despite economic and geopolitical uncertainties.
- Mega deals, including:
- Liberty Global and Infosys: GBP 1.5 billion.
- Danske Bank and Infosys.
- LahiTapiola Mutual Insurance and CG.
AI and Managed Services:
- Average size of AI-related deals doubled in 2023.
- AI implementations increasing across sectors, especially manufacturing and financial services.
- Upskilling of workforce by major service providers for Generative AI applications.
Future Projections:
- Technology spending to grow across all regions.
- IDC anticipates increased large managed services contracts in 2024.
- Mega deals signed in Q1 2024 with TCV > $500 million.
Renewals and Opportunities:
- 15% of TCV from AI-related deals.
- 60% of TCV from cloud deals.
- Estimated 3,000 managed services deals worth > $150 billion up for renewal in 2024.
- Over 200 deals estimated with TCV > $100 million.