The bean counters at Ovum, a data monitoring firm located in Australia, crunched a bunch of numbers and determined that the IT services industry is in pretty bad shape, which is putting it nicely. According to Ovum, the value of new contract signings fell to its lowest point in eight years during the second quarter of 2011.
Ovum says the total contract value (TCV) of deals announced in the second quarter managed just $19 billion, a full 40 percent below the same period one year prior, and the lowest quarterly figure since Q1 of 2003. In addition, the number of deals around the world dropped to just 384 in Q2, marking the fourth consecutive quarter that number has gone down.
"Not only was this down more than 20 percent on the number tracked during the second quarter of 2010, but it was also the lowest number of deals recorded by Ovum in a single quarter since Q4 2007," Ovum said in a statement .
Ovum says there weren't any "mega deals" signed in the second quarter of 2011, which are deals valued at $1 billion or more. What's more, Ovum pointed out "Just two contracts in the second quarter were valued at over $100 million, including a major deal won by Indian vendor Tech Mahindra with Vodafone Hutchinson Australia."