The first quarter of 2014 has been the strongest so far for the IT outsourcing industry in the EMEA region since 2010. According to a report by IT outsourcing market intelligence company ISG, the value and number of contracts awarded to outsourcing firms increased by double digits.

This growth has been fuelled primarily by five mega deals worth over €80 million, including contracts in the UK, the Nordics and France, ISG said.

The annual contract value across EMEA reached €2.4 billion, which represents an increase of 10% over the previous quarter and a 29% jump over the previous 12 months. New scope contracts accounted for 76% of the total contract value. Moreover, the number of contracts awarded to companies in the region increased 21% year-on-year to 165, the report revealed.

The UK's IT outsourcing industry continued growing in the first three months of 2014, with the ACV climbing 33% and 66% in quarterly and annual terms respectively to just over €1 billion. The number of contracts awarded reached 59, their highest level registered in a single quarter over the past three years, the report said.

John Keppel, partner at ISG North Europe, commented that the IT outsourcing market would continue to be driven by increased competition, multi-sourcing and lower technology costs. He noted that customers would shift to smaller deals as they need more specialised services from more providers. He forecast that IT and BPO outsourcing would increase with 15% in the first half of the year and register "high single digit" growth for 2014.