IT and Business Services Market Shows Recovery in Q2 2023: ISG Index Report

Americas' Demand for IT and Business Services Rebounded in Q2, ISG Index™ Shows By Investing.com

Region's growth paced by XaaS demand, as managed services remains sluggish STAMFORD, Conn.--(BUSINESS WIRE)--Demand for IT and business services in the Americas rebounded in the second quarter as the region produced its best growth in two years, even as spending on managed services remained sluggish, according to the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: NASDAQ:III), a leading global technology research and advisory firm. The Americas ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, shows second-quarter ACV for the combined market"including both cloud-based as-a-service (XaaS) and managed services"rose 10 percent, to $12.1 billion, the region's first quarterly double-digit increase since the second quarter of 2022. The latest quarter ends a streak of five straight quarters of year-over-year declines, after the market peaked at $13.5 billion of combined ACV in the first quarter of 2022. Overall, second-quarter growth was driven largely by XaaS spending, which rose 15 percent, to $7.4 billion, the first time XaaS ACV exceeded $7 billion in a quarter since the fourth quarter of 2022. Managed services ACV, meanwhile, rose 3 percent, to $4.7 billion, against a soft year-ago quarter. It was only the second time in the last seven quarters that managed services ACV fell below $5 billion in a quarter. Managed services contract volume, at 347 deals, was down nearly 6 percent from the prior year. There were four mega-deals (with ACV of at least $100 million) signed in the quarter, compared with three such deals in the prior year. Managed services growth was held back by a sharp decline in spending by the banking, financial services and insurance (BFSI) sector, the region's largest industry for IT and business process outsourcing. BFSI ACV fell 18 percent, as other industries advanced, including manufacturing (up 9 percent), consumer packaged goods (up 29 percent), retail (up 46 percent) and media and telecommunications (up more than 250 percent). Enterprises are spending again on cloud-based services, particularly as they look to modernize their data capabilities to pave the way for generative AI at scale, said Todd Lavieri, ISG vice chairman and president of ISG Americas and Asia Pacific. Managed services demand continues to be sluggish, as discretionary spending remains under pressure. Companies continue to focus on optimizing their existing investments and are slow to begin or accelerate new initiatives. The downturn in the BFSI sector this quarter is emblematic of that trend, Lavieri noted. We continue to see banks laser-focused on cost optimization and ensuring ROI from past investments, but we also see a strong desire not to miss the boat on AI, which is driving new project-based work. Lavieri added: With signs of slowing inflation in the U.S., and early indications that interest rates may be easing, we expect the Americas market to slowly rebound in the coming quarters. Results by Segment Within managed services, IT outsourcing (ITO) declined 4 percent, to $3.4 billion of ACV, as growth in data center and infrastructure services was offset by a sharp decline in application development and maintenance (ADM) services. ACV for business process outsourcing (BPO), meanwhile, surged 25 percent, on strong demand for facilities management; engineering, research and development (ER&D) and industry-specific services. On the cloud side, infrastructure-as-a-service (IaaS) ACV climbed 24 percent, to $5.1 billion, even as software-as-a-service (SaaS) dipped 1 percent, to $2.3 billion. First-Half Results The Americas' combined market rose 4 percent year to date, to $24.2 billion, versus a soft first half last year. The combined market, however, remains 7 percent lower than the first half of 2022, when it reached a record high. Managed services ACV declined 2 percent, to $9.8 billion, on 717 contracts " including six mega-deals, compared with nine such deals last year. Within managed services, ITO was down slightly (0.6 percent), to $6.8 billion, while BPO fell 6 percent, to $3.0 billion. XaaS spending in the first half was up 8 percent, to $14.4 billion, with IaaS up 13 percent, to $9.6 billion, and SaaS essentially even (up 0.1 percent), at $4.8 billion. 2024 Forecast For the full year, ISG is forecasting 2 percent revenue growth for managed services, down 100 basis points from its April forecast, and 14 percent revenue growth for XaaS, down from its 15 percent growth forecast in April. Globally, there is no clear catalyst at the moment to push discretionary spending higher, Lavieri said. As in the Americas, global activity in the important BFSI sector remains dampened, due to the higher-for-longer interest rate environment. Enterprises in general continue to focus on cost optimization, and AI growth, while strong, is likely masking underlying weakness in the IT and business services industry. About the ISG Index™ The ISG Index™ is recognized as the authoritative source for marketplace intelligence on the global technology and business services industry. For 87 consecutive quarters, it has detailed the latest industry data and trends for financial analysts, enterprise buyers, software and service providers, law firms, universities and the media. For more information about the ISG Index, or to view a replay of the 2Q24 webcast and download presentation slides, visit this webpage. About ISG ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world's top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries"a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit www.isg-one.com.

Americas' Demand for IT and Business Services Rebounded in Q2, ISG Index™ Shows

Region's growth paced by XaaS demand, as managed services remains sluggish Demand for IT and business services in the Americas rebounded in the second quarter as the region produced its best growth in two years, even as spending on managed services remained sluggish, according to the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm. The Americas ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, shows second-quarter ACV for the combined market -- including both cloud-based as-a-service (XaaS) and managed services -- rose 10 percent, to $12.1 billion, the region's first quarterly double-digit increase since the second quarter of 2022. The latest quarter ends a streak of five straight quarters of year-over-year declines, after the market peaked at $13.5 billion of combined ACV in the first quarter of 2022. Overall, second-quarter growth was driven largely by XaaS spending, which rose 15 percent, to $7.4 billion, the first time XaaS ACV exceeded $7 billion in a quarter since the fourth quarter of 2022. Managed services ACV, meanwhile, rose 3 percent, to $4.7 billion, against a soft year-ago quarter. It was only the second time in the last seven quarters that managed services ACV fell below $5 billion in a quarter. Managed services contract volume, at 347 deals, was down nearly 6 percent from the prior year. There were four mega-deals (with ACV of at least $100 million) signed in the quarter, compared with three such deals in the prior year. Managed services growth was held back by a sharp decline in spending by the banking, financial services and insurance (BFSI) sector, the region's largest industry for IT and business process outsourcing. BFSI ACV fell 18 percent, as other industries advanced, including manufacturing (up 9 percent), consumer packaged goods (up 29 percent), retail (up 46 percent) and media and telecommunications (up more than 250 percent). "Enterprises are spending again on cloud-based services, particularly as they look to modernize their data capabilities to pave the way for generative AI at scale," said Todd Lavieri, ISG vice chairman and president of ISG Americas and Asia Pacific. "Managed services demand continues to be sluggish, as discretionary spending remains under pressure. Companies continue to focus on optimizing their existing investments and are slow to begin or accelerate new initiatives." The downturn in the BFSI sector this quarter is emblematic of that trend, Lavieri noted. "We continue to see banks laser-focused on cost optimization and ensuring ROI from past investments, but we also see a strong desire not to miss the boat on AI, which is driving new project-based work." Lavieri added: "With signs of slowing inflation in the U.S., and early indications that interest rates may be easing, we expect the Americas market to slowly rebound in the coming quarters." Results by Segment Within managed services, IT outsourcing (ITO) declined 4 percent, to $3.4 billion of ACV, as growth in data center and infrastructure services was offset by a sharp decline in application development and maintenance (ADM) services. ACV for business process outsourcing (BPO), meanwhile, surged 25 percent, on strong demand for facilities management; engineering, research and development (ER&D) and industry-specific services. On the cloud side, infrastructure-as-a-service (IaaS) ACV climbed 24 percent, to $5.1 billion, even as software-as-a-service (SaaS) dipped 1 percent, to $2.3 billion. First-Half Results The Americas' combined market rose 4 percent year to date, to $24.2 billion, versus a soft first half last year. The combined market, however, remains 7 percent lower than the first half of 2022, when it reached a record high. Managed services ACV declined 2 percent, to $9.8 billion, on 717 contracts - including six mega-deals, compared with nine such deals last year. Within managed services, ITO was down slightly (0.6 percent), to $6.8 billion, while BPO fell 6 percent, to $3.0 billion. XaaS spending in the first half was up 8 percent, to $14.4 billion, with IaaS up 13 percent, to $9.6 billion, and SaaS essentially even (up 0.1 percent), at $4.8 billion. 2024 Forecast For the full year, ISG is forecasting 2 percent revenue growth for managed services, down 100 basis points from its April forecast, and 14 percent revenue growth for XaaS, down from its 15 percent growth forecast in April. "Globally, there is no clear catalyst at the moment to push discretionary spending higher," Lavieri said. "As in the Americas, global activity in the important BFSI sector remains dampened, due to the higher-for-longer interest rate environment. Enterprises in general continue to focus on cost optimization, and AI growth, while strong, is likely masking underlying weakness in the IT and business services industry." About the ISG Index™ The ISG Index™ is recognized as the authoritative source for marketplace intelligence on the global technology and business services industry. For 87 consecutive quarters, it has detailed the latest industry data and trends for financial analysts, enterprise buyers, software and service providers, law firms, universities and the media. For more information about the ISG Index, or to view a replay of the 2Q24 webcast and download presentation slides, visit this webpage. About ISG ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world's top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries -- a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit www.isg-one.com.

Americas' Demand for IT and Business Services Rebounded in Q2, ISG Index™ Shows - Information Servs Gr (NASDAQ:III)

Region's growth paced by XaaS demand, as managed services remains sluggish Demand for IT and business services in the Americas rebounded in the second quarter as the region produced its best growth in two years, even as spending on managed services remained sluggish, according to the latest state-of-the-industry report from Information Services Group (ISG) III, a leading global technology research and advisory firm. The Americas ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, shows second-quarter ACV for the combined market -- including both cloud-based as-a-service (XaaS) and managed services -- rose 10 percent, to $12.1 billion, the region's first quarterly double-digit increase since the second quarter of 2022. The latest quarter ends a streak of five straight quarters of year-over-year declines, after the market peaked at $13.5 billion of combined ACV in the first quarter of 2022. Overall, second-quarter growth was driven largely by XaaS spending, which rose 15 percent, to $7.4 billion, the first time XaaS ACV exceeded $7 billion in a quarter since the fourth quarter of 2022. Managed services ACV, meanwhile, rose 3 percent, to $4.7 billion, against a soft year-ago quarter. It was only the second time in the last seven quarters that managed services ACV fell below $5 billion in a quarter. Managed services contract volume, at 347 deals, was down nearly 6 percent from the prior year. There were four mega-deals (with ACV of at least $100 million) signed in the quarter, compared with three such deals in the prior year. Managed services growth was held back by a sharp decline in spending by the banking, financial services and insurance (BFSI) sector, the region's largest industry for IT and business process outsourcing. BFSI ACV fell 18 percent, as other industries advanced, including manufacturing (up 9 percent), consumer packaged goods (up 29 percent), retail (up 46 percent) and media and telecommunications (up more than 250 percent). "Enterprises are spending again on cloud-based services, particularly as they look to modernize their data capabilities to pave the way for generative AI at scale," said Todd Lavieri, ISG vice chairman and president of ISG Americas and Asia Pacific. "Managed services demand continues to be sluggish, as discretionary spending remains under pressure. Companies continue to focus on optimizing their existing investments and are slow to begin or accelerate new initiatives." The downturn in the BFSI sector this quarter is emblematic of that trend, Lavieri noted. "We continue to see banks laser-focused on cost optimization and ensuring ROI from past investments, but we also see a strong desire not to miss the boat on AI, which is driving new project-based work." Lavieri added: "With signs of slowing inflation in the U.S., and early indications that interest rates may be easing, we expect the Americas market to slowly rebound in the coming quarters." Results by Segment Within managed services, IT outsourcing (ITO) declined 4 percent, to $3.4 billion of ACV, as growth in data center and infrastructure services was offset by a sharp decline in application development and maintenance (ADM) services. ACV for business process outsourcing (BPO), meanwhile, surged 25 percent, on strong demand for facilities management; engineering, research and development (ER&D) and industry-specific services. On the cloud side, infrastructure-as-a-service (IaaS) ACV climbed 24 percent, to $5.1 billion, even as software-as-a-service (SaaS) dipped 1 percent, to $2.3 billion. First-Half Results The Americas' combined market rose 4 percent year to date, to $24.2 billion, versus a soft first half last year. The combined market, however, remains 7 percent lower than the first half of 2022, when it reached a record high. Managed services ACV declined 2 percent, to $9.8 billion, on 717 contracts - including six mega-deals, compared with nine such deals last year. Within managed services, ITO was down slightly (0.6 percent), to $6.8 billion, while BPO fell 6 percent, to $3.0 billion. XaaS spending in the first half was up 8 percent, to $14.4 billion, with IaaS up 13 percent, to $9.6 billion, and SaaS essentially even (up 0.1 percent), at $4.8 billion. 2024 Forecast For the full year, ISG is forecasting 2 percent revenue growth for managed services, down 100 basis points from its April forecast, and 14 percent revenue growth for XaaS, down from its 15 percent growth forecast in April. "Globally, there is no clear catalyst at the moment to push discretionary spending higher," Lavieri said. "As in the Americas, global activity in the important BFSI sector remains dampened, due to the higher-for-longer interest rate environment. Enterprises in general continue to focus on cost optimization, and AI growth, while strong, is likely masking underlying weakness in the IT and business services industry." About the ISG Index™ The ISG Index™ is recognized as the authoritative source for marketplace intelligence on the global technology and business services industry. For 87 consecutive quarters, it has detailed the latest industry data and trends for financial analysts, enterprise buyers, software and service providers, law firms, universities and the media. For more information about the ISG Index, or to view a replay of the 2Q24 webcast and download presentation slides, visit this webpage. About ISG ISG (Information Services Group) III is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world's top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries -- a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit www.isg-one.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20240716091564/en/ Market News and Data brought to you by Benzinga APIs

Europe's IT, Business Services Market Up Slightly in Q2: ISG Index™

Combined market up 1% in Q2, third straight quarter of sequential growth Market impacted by sluggish managed service demand, even as XaaS grows by double digits Europe's IT and business services market grew only slightly in the second quarter, as slowing demand for managed services largely offset a sharp rise in spending on cloud-based services, according to the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm. The EMEA ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows ACV for the combined market (both managed services and cloud-based as-a-service) rose 1 percent, to US $7.7 billion, in the second quarter. Since bottoming out in the third quarter of last year, the combined market has grown sequentially for three straight quarters to reach its second-highest quarterly ACV ever in Q2. "Having rebounded from the trough of last year's downturn, the European market is now on a slow growth trajectory, with sluggish demand for managed services impeding overall growth," said Steve Hall, president, ISG EMEA. "Cost optimization remains the primary driver of managed services demand, while decision-making on new initiatives continues to be slowed by macroeconomic and geopolitical uncertainty." Second-Quarter Results by Segment Managed services ACV in the second quarter dipped 8 percent, to US $4.0 billion, but rose 3 percent sequentially from a weaker first quarter. A total of 295 managed services contracts were signed in the quarter, up 20 percent from the prior year. Among those contracts were four mega deals (ACV of US $100 million or more), compared with five signed in the second quarter last year. The volume of smaller deals under US $10 million rose 38 percent year on year. Within managed services, IT outsourcing (ITO) rose 7 percent, to US $3.3 billion, driven by strong growth in bundled infrastructure and application development and maintenance (ADM) services, which offset declines in ADM-only and data center services. Business process outsourcing (BPO), meanwhile, slumped 45 percent, to US $692 million, as all BPO segments showed declines, especially customer engagement and facilities management services. By industry, managed services ACV was higher in retail (up 71 percent), manufacturing (up 50 percent) and media and telecom (up 41 percent), while BFSI, Europe's largest industry for outsourcing, dropped 31 percent year on year, reflecting a higher-for-longer interest rate environment. ACV in the as-a-service (XaaS) segment climbed 14 percent year on year, to US $3.7 billion, and has grown three straight quarters after hitting bottom in the third quarter of 2023. Within this segment, infrastructure-as-a-service (IaaS) rose 22 percent, to US $2.7 billion, amid signs the cost-optimization cycle for cloud may be over, due in part to rising interest in data-fueled GenAI. Software-as-a-service (SaaS), meanwhile, was off 2 percent, to US $1.0 billion, as enterprises reduced licensing volume. Geographic Performance Although down 13 percent year on year, the region's largest managed services market, the U.K., posted its sixth straight US $1 billion quarter with ACV in Q2 of US $1.3 billion. The DACH market (Germany, Austria and Switzerland), meanwhile, generated US $896 million of ACV, up 20 percent versus the prior year, its best quarter since the fourth quarter of 2022. Both France (down 12 percent) and the Nordics (down 18 percent) pulled back in the quarter. First-Half Results For the first half, combined market ACV rose 3 percent, to US $15.2 billion. Managed services, at US $7.9 billion, was down 3 percent, while XaaS, at US $7.3 billion, was up 11 percent versus the first half last year. A record 571 managed services contracts were signed in the half, up 5 percent, including six mega-deals, even with the prior year. Within managed services, ITO was essentially flat (down 0.1 percent), at US $6.1 billion, while BPO declined 12 percent, to US $1.8 billion. On the cloud side, the IaaS market rose 15 percent, to US $5.2 billion, while the SaaS market rose 1 percent, to US $2.1 billion. 2024 Global Forecast For the full year, ISG is forecasting 2 percent revenue growth for managed services, down 100 basis points from its April forecast, and 14 percent revenue growth for XaaS, down from its 15 percent growth forecast in April. "Uncertainty persists in the IT and business services market, with no clear catalyst at the moment to push discretionary spending higher," Hall said. "Activity in the important BFSI sector remains dampened, due to the higher-for-longer interest rate environment impacting the overall growth of the market. Enterprises in general continue to focus on cost optimization, and AI growth, while strong, is likely masking underlying weakness in the IT and business services industry." About the ISG Index™ The ISG Index™ is recognized as the authoritative source for marketplace intelligence on the global technology and business services industry. For 87 consecutive quarters, it has detailed the latest industry data and trends for financial analysts, enterprise buyers, software and service providers, law firms, universities and the media. The 2Q24 Global ISG Index results were presented during a webcast today. To view a replay of the webcast and download presentation slides, visit this webpage. About ISG ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world's top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries -- a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit www.isg-one.com.

Europe's IT, Business Services Market Up Slightly in Q2: ISG Index™ By Investing.com

Combined market up 1% in Q2, third straight quarter of sequential growth Market impacted by sluggish managed service demand, even as XaaS grows by double digits LONDON--(BUSINESS WIRE)--Europe's IT and business services market grew only slightly in the second quarter, as slowing demand for managed services largely offset a sharp rise in spending on cloud-based services, according to the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: NASDAQ:III), a leading global technology research and advisory firm. The EMEA ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows ACV for the combined market (both managed services and cloud-based as-a-service) rose 1 percent, to US $7.7 billion, in the second quarter. Since bottoming out in the third quarter of last year, the combined market has grown sequentially for three straight quarters to reach its second-highest quarterly ACV ever in Q2. Having rebounded from the trough of last year's downturn, the European market is now on a slow growth trajectory, with sluggish demand for managed services impeding overall growth, said Steve Hall, president, ISG EMEA. Cost optimization remains the primary driver of managed services demand, while decision-making on new initiatives continues to be slowed by macroeconomic and geopolitical uncertainty. Second-Quarter Results by Segment Managed services ACV in the second quarter dipped 8 percent, to US $4.0 billion, but rose 3 percent sequentially from a weaker first quarter. A total of 295 managed services contracts were signed in the quarter, up 20 percent from the prior year. Among those contracts were four mega deals (ACV of US $100 million or more), compared with five signed in the second quarter last year. The volume of smaller deals under US $10 million rose 38 percent year on year. Within managed services, IT outsourcing (ITO) rose 7 percent, to US $3.3 billion, driven by strong growth in bundled infrastructure and application development and maintenance (ADM) services, which offset declines in ADM-only and data center services. Business process outsourcing (BPO), meanwhile, slumped 45 percent, to US $692 million, as all BPO segments showed declines, especially customer engagement and facilities management services. By industry, managed services ACV was higher in retail (up 71 percent), manufacturing (up 50 percent) and media and telecom (up 41 percent), while BFSI, Europe's largest industry for outsourcing, dropped 31 percent year on year, reflecting a higher-for-longer interest rate environment. ACV in the as-a-service (XaaS) segment climbed 14 percent year on year, to US $3.7 billion, and has grown three straight quarters after hitting bottom in the third quarter of 2023. Within this segment, infrastructure-as-a-service (IaaS) rose 22 percent, to US $2.7 billion, amid signs the cost-optimization cycle for cloud may be over, due in part to rising interest in data-fueled GenAI. Software-as-a-service (SaaS), meanwhile, was off 2 percent, to US $1.0 billion, as enterprises reduced licensing volume. Geographic Performance Although down 13 percent year on year, the region's largest managed services market, the U.K., posted its sixth straight US $1 billion quarter with ACV in Q2 of US $1.3 billion. The DACH market (Germany, Austria and Switzerland), meanwhile, generated US $896 million of ACV, up 20 percent versus the prior year, its best quarter since the fourth quarter of 2022. Both France (down 12 percent) and the Nordics (down 18 percent) pulled back in the quarter. First-Half Results For the first half, combined market ACV rose 3 percent, to US $15.2 billion. Managed services, at US $7.9 billion, was down 3 percent, while XaaS, at US $7.3 billion, was up 11 percent versus the first half last year. A record 571 managed services contracts were signed in the half, up 5 percent, including six mega-deals, even with the prior year. Within managed services, ITO was essentially flat (down 0.1 percent), at US $6.1 billion, while BPO declined 12 percent, to US $1.8 billion. On the cloud side, the IaaS market rose 15 percent, to US $5.2 billion, while the SaaS market rose 1 percent, to US $2.1 billion. 2024 Global Forecast For the full year, ISG is forecasting 2 percent revenue growth for managed services, down 100 basis points from its April forecast, and 14 percent revenue growth for XaaS, down from its 15 percent growth forecast in April. Uncertainty persists in the IT and business services market, with no clear catalyst at the moment to push discretionary spending higher, Hall said. Activity in the important BFSI sector remains dampened, due to the higher-for-longer interest rate environment impacting the overall growth of the market. Enterprises in general continue to focus on cost optimization, and AI growth, while strong, is likely masking underlying weakness in the IT and business services industry. About the ISG Index™ The ISG Index™ is recognized as the authoritative source for marketplace intelligence on the global technology and business services industry. For 87 consecutive quarters, it has detailed the latest industry data and trends for financial analysts, enterprise buyers, software and service providers, law firms, universities and the media. The 2Q24 Global ISG Index results were presented during a webcast today. To view a replay of the webcast and download presentation slides, visit this webpage. About ISG ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world's top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries"a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit www.isg-one.com.