And some data from ISG as it relates to Europe. ISG, which records all deals worth over $5m to calculate the total contract value for a period, revealed a 6% fall in cloud-based services spending to $3.7bn. Within cloud services, infrastructure as a service (IaaS) recorded a 10% decline in spending to $2.7bn. Organizations spent 6% more on software as a service (SaaS), which rose to just over $1bn.
Traditional IT outsourcing contracts, labeled “managed services” by ISG, were also down in the first three months compared to last year. The total spent, $3.7bn, matched cloud spending, and although it was up from the previous quarter, it was 4% down on the corresponding quarter last year.
There’s some cost-cutting going on here, and I wanted to note it. Caveats for sure – it’s both big contracts and Europe. That said, it’s worth noting.