ISG
22.1.2024 10:01:25 CET | Business Wire | Press release
Demand for IT and business services in Europe dipped slightly in the fourth quarter, but was up sequentially from the third quarter, indicating the start of a potential market rebound, 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) at US $7.2 billion for the fourth quarter, down 1 percent from the prior year, but up 4 percent from the third quarter.
“The European market appears poised for a rebound,” said Steve Hall, president, ISG EMEA. “Although down year on year against some tough comps, most segments showed positive sequential growth in the fourth quarter. We also saw growth in new-scope awards and a drop in contract restructurings year on year. This could indicate a bottoming-out of the market, as we begin to move past aggressive cost optimization and start to see new shoots of investment.”
Hall said several signs point to a better 2024. “Conditions are right for a turnaround. Inflation is cooling rapidly and central banks are planning interest rate cuts. That should create a more friendly environment for enterprise spending and capital deployment in 2024.”
Q4 Results by Segment
Managed services ACV for the fourth quarter came in at US $3.9 billion, up 7 percent versus the prior year. There were 268 managed services contracts signed in the quarter, up 3.5 percent, including three mega deals (contracts with ACV of US $100 million or more). Although the number of such deals was even with a year ago, the ACV of this year’s mega deals was 7 percent higher. The ACV of new scope awards was US $2.7 billion, up 13 percent year on year, while that of restructured contracts fell 4.5 percent, to US $1.2 billion.
Within managed services, IT outsourcing (ITO) advanced 10 percent, to US $3.0 billion, driven by strength in applications development and data center services, while business process outsourcing (BPO) dipped 2 percent, to US $929 million.
ACV in the as-a-service (XaaS) segment fell 8 percent versus the prior year, to US $3.3 billion, but was up 1 percent from the prior quarter, the second straight quarter it rose sequentially. Within this segment, infrastructure-as-a-service (IaaS) fell 15 percent, to US $2.2 billion, while software-as-a-service (SaaS) rose 8 percent, to US $1.1 billion.
Full-Year Results
EMEA’s combined market ACV was US $29.0 billion, down 3 percent over the prior year. It was the first time since 2016 EMEA had a down market for the full year.
Managed services had a record year, with ACV of US $15.9 billion, up 4 percent. ITO, at US $12.0 billion, was up 4 percent, while BPO, at US $3.9 billion, was up 3 percent. A total of 1,093 managed services contracts were awarded in 2022, even with the prior year. Twelve of those were mega deals, down from 14 in the prior year but up 40 percent by total ACV. Among sectors, financial services, up 26 percent, and energy, up 30 percent, drove the market.
The XaaS segment generated ACV of US $13.1 billion, down 9 percent, the first time XaaS ACV fell in the EMEA region for the full year. IaaS fell 15 percent, to US $8.9 billion, while SaaS rose 4 percent, to US $4.2 billion. XaaS accounted for 45 percent of the combined market in 2023, down from 49 percent in 2022.
Geographic Performance
In the fourth quarter, the region’s largest market, the U.K., generated US $1.3 billion of managed services ACV, up 54 percent versus the prior year. It was the fourth consecutive quarter ACV in the U.K. topped US $1 billion – a first. France, the region’s third-largest market, produced ACV of US $801 million, up 67 percent, while DACH, the region’s second-largest market, saw its ACV decline 21 percent, to US $730 million
For the full year, the U.K. generated US $5.6 billion of managed services ACV, its second-best year ever, behind 2012. The Benelux market was the only other geographic market in positive territory for the year, up 16 percent, to US $1.2 billion. DACH was down 23 percent, to US $2.9 billion, while France dipped 4 percent, to US $2.2 billion.
2024 Global Forecast
ISG is forecasting 4.25 percent growth for managed services and 15 percent revenue growth for XaaS in 2024.
“We expect spending for application modernization and business transformation projects led by GenAI to continue at high levels in 2024. Public cloud spending should accelerate as optimizations phase out. We also expect small discretionary deals to recover, as well as Financial Services industry spending to rebound,” Hall said.
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 85 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, visit this webpage.
The 4Q23 Global ISG Index results were presented during a webcast on January 18. 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 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.
To view this piece of content from cts.businesswire.com, please give your consent at the top of this page.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240122943164/en/
About Business Wire
Subscribe to releases from Business Wire
Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from Business Wire
LTM Launches BlueVerse™ RightLogic to Address Cyber Risk in AI Era6.7.2026 11:12:00 CEST | Press release
New assessment and risk assurance framework helps enterprises gain unified visibility, prioritise remediation and scale AI securely LTM, the Business Creativity partner to the world’s largest enterprises, has launched BlueVerse™ RightLogic, a cybersecurity assessment and risk assurance framework designed to help enterprises identify, assess and remediate cyber exposure as they accelerate AI adoption. AI is now capable of autonomously identifying and exploiting vulnerabilities, while exposure across infrastructure, applications and supply chains continue to expand. This has elevated cyber risk from a technology concern to a board-level priority, with enterprises struggling to maintain visibility and respond at the speed of emerging threats. BlueVerse RightLogic addresses this gap by providing a unified, business-aligned view of enterprise exposure and enabling a shift from fragmented, point-in-time assessments to continuous, evidence-led risk management. The framework combines an end-to
Media Release: Financial Worries Rise and Match Health Concerns as Cost-of-Living Pressures Mount in 20266.7.2026 10:00:00 CEST | Press release
Globally, people are united in their top personal worries: Financial and health issues rank at the top in 2026, averaging 13 percentage points ahead of other concerns.Financial pressure is prominent across Europe, rising in France, Germany, and U.K., and emerging as a top concern in newly measured markets, Spain and Switzerland.Allianz published these results in “The Allianz 3am Report 2026,” which surveyed 10,000 people across 10 countries worldwide about what keeps them awake at night.Addressing financial concerns requires accessible, targeted financial and risk education. To support this, Allianz has launched the “Allianz School For Life” learning platform. Households around the world are feeling the strain of the rising cost of living, with financial pressure increasingly shaping everyday choices and long-term confidence. Finances and health are now tied as the top global worries, at 48% each, followed by concerns about the future at 35%, according to consumer surveys in 10 countri
HAZAMA ANDO Becomes an Official Partner in Helical Fusion’s Commercial Fusion Initiative and Signs MoU Toward Construction of the Fusion Pilot Plant6.7.2026 08:40:00 CEST | Press release
A long-established Japanese general contractor will contribute construction expertise to advance Fusion Pilot Plant development toward commercially viable fusion power. Helical Fusion Co., Ltd. (“Helical Fusion”), a Japan-based fusion energy startup developing fusion power plants, and HAZAMA ANDO CORPORATION (“HAZAMA ANDO”), a long-established Japanese general contractor, today announced that HAZAMA ANDO has become an Official Partner in the Helix Program, Helical Fusion’s commercial fusion initiative. The two companies have also signed a memorandum of understanding (“MoU”) to collaborate toward the construction of Helix KANATA, Helical Fusion’s Fusion Pilot Plant targeted for the 2030s. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260706176052/en/ (L-R) Kazuhiko Kuniya (Representative Director and President, HAZAMA ANDO CORPORATION) and Takaya Taguchi (Co-Founder and CEO, Helical Fusion Co., Ltd.) at a press conference in
Sofinnova Partners Announces Myricx Bio Agrees to Be Acquired by Novartis6.7.2026 07:15:00 CEST | Press release
Sofinnova Partners co-led the seed investment in 2019 and has supported the company from founding through to exitThe proposed acquisition combines the oncology expertise of Novartis with Myricx Bio’s novel ADC assets and platform having broad potential across multiple solid tumor typesMyricx Bio's first-in-class NMTi payload platform is designed to improve the therapeutic index of ADCs, offering the potential for more effective and better-tolerated treatment options for cancer patientsThe transaction valued at up to $1.5 billion including $1.1 billion cash upfront Sofinnova Partners, a leading European life sciences venture capital firm, today announced that its portfolio company Myricx Bio (“Myricx”) has reached agreement to be acquired by Novartis, for up to $1.5 billion including $1.1 billion cash upfront plus potential milestone payments. This marks Sofinnova Partners' seventh exit in three years. Myricx Bio is a UK-headquartered transatlantic biotech company focused on the discove
Global New Material International Wins Technology Innovation Best Practice Award at Sino-European ESG Conference6.7.2026 05:59:00 CEST | Press release
Global New Material International Holdings Ltd. has received the Technology Innovation Best Practice Award at the Third Sino-European Corporate ESG Best Practice Conference recently in Mainz, Germany, in recognition of its efforts to advance sustainable development through material innovation. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260705533555/en/ Thorsten Giehler (L), Director of the Economic, Social Development and Employment Division of The German Society for International Cooperation (GIZ), delivered the award to Zhou Fangchao, Executive Director and Vice President of Global New Material International. The annual conference, initiated by the Chinese Consulate General in Frankfurt and jointly organized with Chinese and European partners, recognizes corporate best practices in environmental, social and governance (ESG) performance. This year's event brought together government officials, business leaders and exper
In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.
Visit our pressroom