Indian tech giants bag 31% of global outsourcing contracts in 2021: Report

The first quarter of 2021 has seen remarkable growth in deal volume as well as Annual Contract Value (ACV)

April 14, 2022

602 of the deals during the period feel within the US$ 5 million - US$ 10 million ACV bracket.

Six deals worth US$ 100 million were made during the first quarter, as against four deals in Q1 of 2020.

The Managing Services market has seen a 13% year-on-year growth, touching US$ 8.6 billion of ACV.

The Cloud as a Service (XaaS) segment crossed the US$ 15.6 billion mark in terms of deal made, marking an unprecedented leap.

Leading Indian Information Technology companies including Tech Mahindra, Infosys, Wipro, HCL Technologies, Cognizant and Tata Consultancy Services (TCS) have bagged 31% of the total Managed Services deals in 2021, according to Global Advisory Firm ISG. This is likely to increase in the coming quarters, added ISG.

Of the US$ 33 billion deals made, 602 of them falling within the US$ 5 million – US$ 10 million bracket were awarded during the year.  The first quarter also saw the signing of six deals worth US$ 100 million in Annual Contract Value (ACV). The firm also said that the corresponding quarter in the previous year saw only four mega deals signed. 

The Telecommunications, Manufacturing and Financial Service  sectors led the demand for managed services. At a market level, Managed Services are seen to have reached US$ 8.6 billion worth of Annual Contract Value (ACV), marking a 13% year-on-year growth. The sector is seen to have continued its trajectory of winning deals worth more than US$ 8 billion for the fourth consecutive quarter with ISG forecasting that the trend will be expected to continue.  The Cloud as a Service (XaaS) segment registered US$ 15.6 billion worth of deals, crossing the US$ 15 billion mark for the first time in a quarter.

The business process outsourcing (BPO) segment, meanwhile, surged 86% to a record $3 billion of ACV, fuelled by strong demand for industry-specific services.