PARIS–(Small business WIRE)–Sourcing field authorities will obtain in Paris to discuss the most current engineering and enterprise expert services developments and shipping models at the to start with-ever ISG SourceIT EMEA meeting, Could 17–18, at the Hôtel Lutetia, hosted by Details Products and services Group (ISG) (Nasdaq: III), a primary international technological know-how research and advisory organization.
The accumulating arrives at a time when demand for this kind of services is rising, in accordance to the findings of the EMEA ISG Index™, which show file first-quarter yearly deal benefit (ACV) in Europe for cloud-based mostly IT and business enterprise solutions and robust continuing momentum in managed companies.
“Europe’s merged market place has been steadily expanding, with EMEA ISG Index™ details exhibiting ACV for the mixed marketplace at a record US $7.5 billion in the 1st quarter, up 21 {ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year over calendar year,” claimed Hervé Ferrouillat, ISG companion and host of the ISG SourceIT event. “With this accelerated need comes a important have to have for the sourcing and governance methods that will ensure enterprises notice the benefit they hope from the expert services and technologies they are getting.”
More ISG Index results noticed regional EMEA need for cloud-based mostly expert services at a record US$3.9 billion, up 44 percent in the initially quarter and accounting for 51 p.c of the combined current market, the best proportion ever.
Sourcing specialists at ISG SourceIT will check out the affect of raising cloud desire from the position of see of the community sector, which necessitates a bespoke tendering system for aggressive vendor assortment how the strategy of the “sovereign cloud” is impacting company functions, and Cloud FinOps frameworks that deliver with each other business, engineering and finance groups.
Expert-led periods will also handle enhancing contract lifecycle management, vendor management efficiency and price tag discounts identifying and mitigating worth leakage in outsourcing agreements, and introducing cybersecurity controls to sourcing contracts.
“As aspect of their electronic transformations, organizations are faced with several difficulties. Amongst other matters, they must regulate the complexity of their infrastructures and guarantee the safety of their data in a hybrid multi-cloud entire world in which cyber-attacks are on the raise. The sourcing of IT solutions and answers in this hybrid context have to be particularly agile and targeted on worth development for shoppers. Collaboration with an prolonged ecosystem contributes to meeting this aim,” claimed Philippe Roncati, president of Kyndryl France.
The ISG SourceIT EMEA is sponsored by Kyndryl, HCL, Tech Mahindra, T-Systems, Wipro and WNS. The Technological know-how Organization Management (TBM) Council and FITT France are media sponsors.
Further information and registration are out there on the function web site.
About ISG
ISG (Information and facts Expert services Team) (Nasdaq: III) is a top world wide know-how study and advisory firm. A trustworthy small business associate to extra than 800 clients, like more than 75 of the world’s leading 100 enterprises, ISG is dedicated to assisting organizations, community sector companies, and support and technology suppliers accomplish operational excellence and more quickly development. The business specializes in digital transformation products and services, which includes automation, cloud and facts analytics sourcing advisory managed governance and risk providers network provider providers method and operations layout change management industry intelligence and technology study and investigation. Founded in 2006, and based in Stamford, Conn., ISG employs extra than 1,300 electronic-all set pros operating in a lot more than 20 countries—a global team recognized for its modern considering, sector impact, deep marketplace and technological innovation knowledge, and entire world-course investigate and analytical capabilities based on the industry’s most in depth marketplace facts. For far more information and facts, take a look at www.isg-1.com.
Global combined ACV for the third quarter up 40{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to a record $21.8 billion
Cloud-based as-a-service spend up 55{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, highest growth rate ever, to record $13.4 billion
Managed services climbs 22{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to a record $8.4 billion, with record contracting activity
ISG raises its 2021 forecasts again for both as-a-service and managed services
STAMFORD, Conn., October 12, 2021–(BUSINESS WIRE)–The global market for technology and business services grew at its fastest pace ever in the third quarter, propelled by surging demand for cloud computing and other digital capabilities, according to the latest state-of-the industry report from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
Data from the ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, show third-quarter ACV for the combined global market (both as-a-service and managed services) grew by 40 percent, to $21.8 billion—the highest quarterly growth rate for the combined market since ISG began tracking as-a-service spending in 2014, and the fourth consecutive quarter the global market has established a new high for ACV.
“The demand environment for technology and business services is as robust as we’ve ever seen,” said Steve Hall, partner and president of ISG. “This is not just pent-up demand coming out of the pandemic, but a real structural shift for the market as enterprise customers accelerate their digital transformation strategies, modernize their legacy environments and move to the cloud. We see this trend continuing for the foreseeable future, even against some economic headwinds. There is no let-up in sight.”
The cloud-based as-a-service market reached a record $13.4 billion in the third quarter, up 55 percent against the prior year—the highest quarterly growth rate ever, topping the previous high of 50 percent in the first quarter of 2016. Within this segment, both infrastructure-as-a-service (IaaS) and software-as-a-service (SaaS) grew at a record pace, with IaaS up 57 percent, to a record $9.7 billion, and SaaS up 53 percent, to a record $3.7 billion.
Managed services reached a record $8.4 billion, and its 22 percent growth rate was the highest in more than three years. IT outsourcing (ITO) came in at $6.1 billion, up 18 percent from last year, but down slightly from the previous quarter. Business process outsourcing (BPO), meanwhile, surged 32 percent, to a record $2.3 billion.
A record 564 managed services contracts were awarded in the third quarter, extending to four quarters the best 12-month stretch ever for deal activity—coming out of a COVID-19 low in the second quarter last year. During the third quarter, six mega-deals, each worth more than $100 million, were signed, Healthy Lifestyle.
Year-to-Date Performance
Through the first nine months of 2021, the combined global market generated a record $59.8 billion of ACV, up 26 percent.
As-a-service, at a record $35.5 billion, was up 33 percent, its highest growth rate in three years. IaaS hit a record $25.8 billion of ACV, up 35.5 percent, also its highest growth rate in three years, as enterprises seek the cost savings, agility and innovation offered by cloud-based infrastructure. SaaS also established a new record for quarterly ACV—$9.7 billion, up 26 percent—as providers seek to establish longer-term, value-based relationships with clients to mitigate the negative impact of price increases in an inflationary environment.
Managed services, at a record $24.2 billion, was up 17 percent—the fastest growth rate for this segment since 2014. ITO rose 12 percent, its best growth rate in three years, to a record $18.3 billion, on record contracting activity of 1,187 deals. The ITO market is being fueled by strong demand for application development and maintenance (ADM) and cybersecurity services, even as the infrastructure (data center) business declines. The BPO segment soared 40 percent, to $5.9 billion, with contract awards up 39 percent year to date. Growth is being fueled by strong demand for engineering/R&D and finance and accounting services. Contact center and facilities management services are also growing but have yet to climb back to their pre-pandemic highs.
Americas
The Americas region generated strong growth across the board in the third quarter, both versus the prior year as well as quarter over quarter, and set ACV records in all segments. Combined ACV climbed 37 percent, to $11.6 billion, its highest level ever and the first time the region has surpassed $10 billion in a quarter. As-a-service ACV soared 51 percent over the prior year, to a record $6.9 billion, the fastest growth rate for this segment since ISG began tracking it in 2014. IaaS surged 53 percent, to a record $4.6 billion, and SaaS shot up 48 percent, to a record $2.4 billion. Managed services advanced 21 percent, to a record $4.7 billion. ITO jumped 26 percent, to a record $3.4 billion, and BPO was up 9 percent, to a record $1.3 billion.
Europe, Middle East and Africa (EMEA)
EMEA’s combined market reached an all-time high of $6.5 billion, up 36 percent from the prior year, and up 4 percent over the second quarter. As-a-service soared 59 percent, to a record $3.3 billion, with IaaS and SaaS each also up 59 percent, to quarterly records of $2.4 billion and $930 million, respectively. Managed Services, meanwhile, rose 19 percent, to $3.2 billion, fueled by 7 percent growth in ITO, to $2.3 billon, and 71 percent growth in BPO, to a record $844 million, the latter on strong demand for engineering and R&D services. The region produced strong growth across most geographies, with the notable exception of its two largest markets—DACH and the UK—both down for the quarter.
Asia Pacific
Asia Pacific generated $3.6 billion of combined market ACV in the third quarter, up 60 percent over the prior year, but down 6 percent from a record second quarter. The as-a-service market continued to establish new quarterly highs, up 62 percent, to a record $3.1 billion overall, with IaaS up 60 percent, to a record $2.7 billion, and SaaS up 69 percent, to a record $407 million. Managed services ACV was $575 million, up 53 percent against a soft year-ago quarter, but down 40 percent against a strong second quarter. ITO followed the same pattern, with ACV of $405 million, up 29 percent over last year, but down 51 percent against the second quarter. BPO, on the other hand, advanced 178 percent versus last year and 18 percent over the prior quarter, with strength in engineering/R&D and industry-specific services.
2021 Forecast
ISG is forecasting the market for cloud-based services (IaaS and SaaS) will grow 25 percent globally in 2021, up from its 21 percent growth forecast last quarter. The firm also is raising its forecast for managed services growth to 10.1 percent, up from its prior forecast of 9 percent.
Commenting on the forecast, Hall said: “Our outlook for the technology and business services market remains bullish, with the volume of managed services deals in the pipeline indicating strong buying intentions among enterprises seeking digital transformation partners. The market is no longer dependent on larger deals and the smaller deals, we believe, will eventually grow into larger engagements as transformation efforts continue to pick up steam. One headwind for this sector is the Great Resignation, which has increased industry attrition and could slow growth.
“We believe the as-a-service market is in the early phase of its maturity cycle. One near-term headwind is inflationary pressures. If providers can successfully navigate potential price increases with their client base or alter the pricing model to another construct, such as outcomes-based pricing, the multiyear secular growth drivers should remain quite healthy.”
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 76 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. In 2016, the ISG Index was expanded to include coverage of the fast-growing as-a-service market, measuring the significant impact cloud-based services are having on digital business transformation. ISG also provides ongoing analysis of automation and other digital technologies in its quarterly ISG Index presentations.
The 3Q21 Global ISG Index was presented during a conference call and webcast today. To listen to an audio replay of the call and view 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 700 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 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 1,300 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,
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