After a slow start to 2010 the second quarter of the year was the best for 12 months in terms of the number of IT services deals announced.

However, concerns remain about the scale of outsourcing in the private sector where the total contract value (TCV) in the quarter slipped to only $10 billion as clients continued to shy away from large deals.

Public-sector demand remained steady, particularly in the US, which accounted for over 90% of the vertical’s quarterly TCV.

This was good news for vendors with a major focus on the US government sector, notably General Dynamics, Lockheed Martin, and SAIC.
Number of deals up 14% on the first quarter

IT services contract activity bounced back in the second quarter, having fallen to its lowest level since 2007 in the first three months of the year.Ovum’s IT Services Contracts Analytics tracked a total of 457 deals in the three months ended 30 June, up from 401 in Q1. However, the total was still down 8% on the same period last year when Ovum recorded 498 deals.

Despite the number of contracts increasing 14% in the first quarter of the year, the TCV in Q2 fell 14% to $30.8 billion. This was largely because of the high number of mega-deals (contracts valued at $1 billion or more) announced in the first three months of 2010.

Eight mega-deals were reported in the quarter to the end of March, compared with only two in Q2.

The large awards boosted the average contract value to $89.0 million in the first quarter, compared with $67.4 million in the second three months of the year.

Both of the second-quarter mega-deals involved US public-sector agencies. The larger of the two contracts (valued at $1.6 billion) was awarded to ACS (which is now owned by Xerox) by California’s Department of Health Care Services.

The other went to defense specialist General Dynamics, which was selected by the Federal Aviation Administration (FAA) as one of three large-business contractors on the System Engineering 2020 Research and Development/Mission Analysis Support program. The 10-year contract has a maximum potential value of $1.2 bn.

Private-sector woes continue

Contract-signing activity in the public sector remained buoyant in Q2, but the TCV from the private sector fell to a new low. The number of deals signed was up on the first quarter, but the TCV slipped to only $10.0 billion with the average contract valued at only $40.1 mn.

Not only were there no private-sector mega-deals announced during the second quarter, but also only four contracts out of a total of 250 were worth $500 million or more.

Of the deals awarded by private-sector clients, 88% were valued at $100 million or less. By way of comparison, three private-sector mega-deals were awarded in the first three months of 2010, which boosted the average contract value to $64.0 mn.

US dominates public-sector contract activity

Some 207 public-sector deals were announced in the second quarter of 2010, up 8% on the previous quarter of the year and 1% on the same period 2009.

While the TCV was down slightly on Q1, the average contract value was over $100 million for the second consecutive quarter. In total, the public sector contributed 68% to the overall TCV, dwarfing the contribution of the private sector.

Of the 207 deals announced in Q2, over three-quarters (157 contracts) were signed in the US. These deals accounted for a staggering 92% ($19.1 billion) of public-sector TCV and had an average value of nearly US$122 mn.

General Dynamics’ big wins with the FAA, Nasa, and the Space and Naval Warfare Systems Command helped it secure a 16% share of public-sector TCV in Q2. In total the company announced 12 new contracts worth a combined $3.3 billion.

Two of General Dynamics’ major rivals in the defense market, Lockheed Martin and SAIC, each secured 10% of public-sector TCV during the second quarter, while ACS, thanks to its big win in California, was responsible for 8% of the three-month total.

Source:http://www.indiainfoline.com/Markets/News/IT-services-deal-signings-bounce-back-in-second-quarter/4903826235

CSC  today announced it was named the top provider in information technology (IT) services in the Vanguards in Insurance Practices Awards and also received a RAVE Award Honorable Mention for its Agency Link agent portal software.

The awards were presented at the ACORD LOMA Insurance Systems Forum, hosted by ACORD, a nonprofit insurance standards organization, and LOMA, a worldwide leader in learning and professional development within the insurance and financial services industry, and were determined by insurance carriers who either named the top technology providers in various categories or shared their client experiences.

Vanguards in Insurance Practices Awards

Providing a broad range of IT services, including consulting, data transformation, software testing and outsourcing, CSC has won first-place honors in the IT Services category every year since the award was established in 2007. For the Vanguards in Insurance Practices survey, the sponsors, Insurance Networking News and research firm Celent, ask insurance carriers in the United States and Canada to rank the top insurance technology providers across several categories. Factors impacting the choice of preferred vendors include vendor responsiveness, vendor stability, perfect functionality/service fit, modern technology, long-term partnership potential and aggressive pricing. This year’s results reflect 2,000 responses from Insurance Networking News readers.

RAVE Award 2010

In addition, CSC’s Agency Link software received a RAVE Award Honorable Mention. These awards are sponsored by Tech Decisions and industry research and advisory firm Novarica. Rather than being chosen by a board of experts or an open online poll, the winners are those that received the highest aggregate rankings from a group of current clients using Novarica’s Average Customer Experience (ACE) ranking methodology.

Agency Link is an agent portal that helps carriers and their agents more effectively sell and service their property and casualty insurance policies. It allows agents to rate, quote, underwrite and issue new policies and gain access to a wide range of customer service functions.

“With one of the industry’s broadest portfolios of insurance software, consulting and IT services, CSC is committed to providing solutions that address mission-critical client needs,” said Ray August, president of CSC’s Financial Services Group. “These industry acknowledgments validate CSC’s consistent delivery of high-quality products and services and our ability to help insurance companies achieve business results.”

Source:http://www.marketwatch.com/story/insurers-choose-csc-as-the-top-it-services-provider-for-third-year-2010-07-07?reflink=MW_news_stmp