IDC: Number of Managed Services Contracts Declined in 2022; Increase in Average Deal Size

Published On: May 7, 2023Categories: Buzz, Uncategorized

According to the International Data Corporation (IDC) Services Contracts Database, more than 1,700 managed services deals were signed in 2022 worth more than $125 billion in contract value. The total number of deals declined compared to 2021, but the average deal size increased by more than 22%.

Despite indications of a global economic slowdown, IT spending across organizations seems to be steadily increasing, according to the Needham, Massachusetts-based market researcher, which also reports an increase in larger deal signings (total contract value (TCV) above $100 million) in 2022 compared to 2021.

More than 60% of the total TCV was signed in the USA, which is almost 8% higher than 2021. This growth was mainly driven by many large deals awarded to hyperscalers involving higher level cloud implementation. Western Europe accounted for 28% of the TCV in 2022, which is almost 6% less than 2021. Due to high inflation, skill shortages, and disruption in the supply chain due to geo-political reasons, this slowdown is expected to continue over a few quarters.

Overall spending by organizations is expected to decline due to the economic headwinds. However, IT spending is not expected to be affected as much.

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

Channel Impact®
As technology is increasingly becoming the backbone of organizational growth strategies, partners are seeing more organizations upgrading their IT infrastructure leveraging cloud, artificial intelligence (AI), and security. The pandemic further accelerated this trend.

Stay in the Know

Keep tabs on what’s happening in the channel and the impact it will have on the partner community by subscribing to Channel Impact communications.

Recent News

Search Buzz

Buzz Categories