asia pacific
Asia Pacific is now an as-a-service region. Combined market ACV in Asia Pacific grew 11 percent between 1Q20 and 1Q21 due solely to as-a-service activity. As-a-service bookings now comprise a full 85 percent of the Asia Pacific ACV, and this sector of the market is consistently posting 20 percent year-over-year gains (see Data Watch). Large managed services deals have all but disappeared over the past six quarters.
Cloud-only strategies are gaining traction as organizations opt exclusively for IaaS and SaaS solutions. As this happens, bigger chunks of infrastructure management are being incorporated into as-a-service agreements and are leading to more agile product development with a focus on continuous delivery. At the same time, enterprises are exercising more control of their provider relationships by breaking scope into smaller pieces or bringing work back in house. We’re seeing a number of companies build panel-based arrangements to shift time-and-materials contracts to be more agile with the goal of driving specific outcomes without significant upfront financial commitments.
Government organizations also have been breaking large sourcing contracts into smaller pieces to give local entities more opportunity to engage. Of course, there are exceptions to this – and many of the large deals in this region are being extended rather than going to market. Outside of ANZ, digital take up in the region remains slow. Regulators in Asia have been slow to accept cloud, and data centers are geographically distributed and subject to regional regulatory control, all of which make cloud migrations more challenging. Digital talent is also at a premium. However, the rapid growth of China’s economy will be a catalyst for digital transformation across the rest of the Asia Pacific region, and we expect digital adoption to accelerate. | | |
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deal activity
- Pitney Bowes and IBM. E-commerce, mailing and shipping company signs multi-year infrastructure transformation deal. Link
- Centrica and Cognizant. U.K.'s largest energy company consolidating its SAP footprint. Link
- McLaren Health Care and HCL. U.S. managed care provider creating EMR center of excellence. Link
- Safran Aircraft Engines and Sopra Steria. French aerospace manufacturer deploying S/4HANA. Link
- Alstom and Accenture. French transportation company developing new product lifecycle management system. Link
- Cintra and Atos. Transport infrastructure developer implementing new cloud-based tolling system. Link
- Carestream and HPE. Canadian healthcare company using GreenLake to streamline medical imaging process. Link
- vidaXL and Google. Dutch e-commerce firm migrating SAP to GCP. Link
- Suncorp and Genesys. Australian financial services company implements new contact center platform. Link
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M&A
- Unisys acquires experience management provider Unify Square. Link
- Accenture acquiring EPM firm Nell’Armonia Link, Malaysian digital agency Entropia Link and Australian cloud native firm Industrie&Co Link.
- Capgemini, Orange and Microsoft creating hyperscale cloud for France. Link
- Atos and Thales creating big data and AI platform for defense and intelligence agencies. Link
- Wipro sells Ensono stake to KKR for $76 million. Link
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isg insiders
Stanton Jones, Alex Bakker, Cynthia Batty, Dr. Daniel Gerster, Doug Saylors, Missy Lawrence-Johnson, Mrinal Rai, Ron Exler, Sashidharan Balasundaram, Steve Hall, Sunder Sarangan, Troy Williams
contributing this week
Michael Gale
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