KUALA LUMPUR, May 15 -- Asia Pacific’s demand for cloud-based as-a-service solutions soared to a new record in the first quarter, even as demand for managed services slumped in response to the coronavirus pandemic.
This is according to the latest state-of-the-industry report from Information Services Group (ISG), a leading global technology research and advisory firm.
The ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of US$5 million or more, found Asia Pacific’s as-a-service market jumped 25 per cent, to a record US$1.7 billion of ACV in the quarter, while managed services dropped 27 per cent, to US$522 million. (US$1 = RM4.343)
The two segments, combined, were up eight per cent, to US$2.2 billion. As-a-service accounted for more than 75 per cent of the region’s combined market for the second consecutive quarter, according to a statement.
As-a-service sourcing was boosted by strong demand for Infrastructure-as-a-Service (IaaS), which climbed 32 per cent, to a record US$1.5 billion, despite some pandemic-related demand constraints in China during the quarter.
“We continue to see growth in the IaaS segment as more and more enterprises shift their workloads to the public cloud, or to a hybrid cloud environment. Demand for managed services, on the other hand, was softer against a robust first quarter last year, and showed signs of pandemic-related weakness,” said partner and head of ISG Asia Pacific, Scott Bertch.
ISG expects managed services ACV to decline 17 per cent sequentially in the second quarter as overall spending slows in response to the pandemic. For the full year, ISG projects managed services spending will be down seven per cent versus the prior year.
In addition, second-quarter as-a-service ACV is expected to be flat, quarter over quarter, with some upside potential for IaaS. For the full year, ISG forecasts as-a-service ACV will be up 12 per cent versus the prior year.
More details at www.isg-one.com.
-- BERNAMA
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