Managed services deals reach $125 bn in contract value

The number of managed services deals signed in 2022 reached more than 1,700 — worth more than $125 billion in contract value.
Marketing automation for tech jobThe total number of managed services deals fell compared to 2021, but the average deal size increased by more than 22 percent, according to IDC report.

There was an increase in larger managed services deal signings (total contract value (TCV) above $100 million) in 2022 compared to 2021.

More and more organizations are upgrading their IT infrastructure leveraging cloud, artificial intelligence (AI), and security. The pandemic also forced organizations to become digital first. The after effect of this paradigm shift is evident in the increased IT spending trend observed in 2022.

More than 60 percent of the total TCV was signed in the USA, which is almost 8 percent higher than 2021. This growth was mainly driven by many large deals awarded to hyperscalers involving higher level cloud implementation.

Some notable deals in the USA include the one between Snap and Google estimated to be more than $700 million, and one between Boeing and AWS estimated to be around $400 million.

Western Europe accounted for 28 percent of the TCV in 2022, which is almost 6 percent less than 2021.

Notable deals in Western Europe region include the one between the London Stock Exchange and Microsoft worth $2.8 billion and between UBS and Microsoft estimated to be around $750 million.

IDC’s Services Contracts Database lists more than 2,300 managed services deals, worth more than an estimated $122 billion, coming up for renewal in 2023. This includes about 130 deals above TCV of $100 million.

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