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Researcher: More Contracts Signed in Q2

Yes, but: Total contract value is down.

As the economy continues to bump along, throwing off signals both that it might be headed up or down, a major component of the channel is reflecting the same confusing lack of clear trends.

Researchers at Ovum last month reported that the number of contracts in the IT service sector increased in the second quarter. The research firm found a 14 percent sequential increase in deals from 401 in the first quarter to 457 in the second quarter. The number of deals announced was the best showing on the statistic in a year. That's the positive news.

The bad news: The total contract value (TCV) of those deals fell 14 percent to $30.8 billion.

In a statement, Ovum analyst Ed Thomas indicated that IT service providers dealing with the public sector were faring slightly better than their private-sector counterparts.

"Public sector demand remained steady, particularly in the United States, which accounted for more than 90 percent of the market's quarterly TVC. This was good news for vendors with a major focus on the U.S. government sector, notably General Dynamics, Lockheed Martin and SAIC," Thomas said. "[C]oncerns remain about the scale of outsourcing in the private sector, where TCV for Q2 slipped to only $10 billion as clients shied away from signing large deals."

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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