{"id":1009096,"date":"2026-10-12T04:03:01","date_gmt":"2026-10-12T08:03:01","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/demand-for-tech-services-in-europe-continues-to-surge-led-by-ai-driven-infrastructure-spending-in-q3-isg-index\/"},"modified":"2026-10-12T04:03:01","modified_gmt":"2026-10-12T08:03:01","slug":"demand-for-tech-services-in-europe-continues-to-surge-led-by-ai-driven-infrastructure-spending-in-q3-isg-index","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/demand-for-tech-services-in-europe-continues-to-surge-led-by-ai-driven-infrastructure-spending-in-q3-isg-index\/","title":{"rendered":"Demand for Tech Services in Europe Continues to Surge, Led by AI-Driven Infrastructure Spending in Q3: ISG Index\u2122"},"content":{"rendered":"

<\/p>\n

Demand for Tech Services in Europe Continues to Surge, Led by AI-Driven Infrastructure Spending in Q3: ISG Index\u2122<\/b><\/p>\n

Combined market up 56%, as infrastructure spend more than doubles<\/b><\/p>\n

Managed services up 12%, as enterprises look for savings to fund AI<\/b><\/p>\n

LONDON–(BUSINESS WIRE<\/a>)–
\nSurging AI demand propelled Europe\u2019s technology services market to a new high in the third quarter, as infrastructure spending more than doubled and traditional managed services grew by double digits, the latest state-of-the-industry report from Information Services Group (ISG<\/a>) (Nasdaq: III<\/a>), a global AI-centered technology research and advisory firm, finds.<\/p>\n

\nThe EMEA ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows third-quarter ACV for the combined market (both managed services and cloud-based infrastructure and software services) soared 56 percent\u2014its fastest growth in eight years\u2014to US $14.9 billion. It was the fourth straight quarter that combined ACV growth has exceeded 20 percent, averaging 39 percent in that span.<\/p>\n

\n\u201cThe European market is absolutely roaring right now,\u201d said Anthony Drake, president, ISG EMEA. \u201cAfter surpassing US $10 billion for the first time in last year\u2019s fourth quarter, demand continues to push higher, with more than US $5 billion of incremental spend added from a year ago\u2014and US $2 billion added just since last quarter. We\u2019re seeing double-digit growth in managed services, led by business process outsourcing, as enterprises continue to emphasize efficiency and cost savings, but the real story is the meteoric rise in infrastructure spending to support accelerating AI adoption. The region is on a roll.\u201d<\/p>\n

Third-Quarter Results by Segment<\/b><\/p>\n

\nACV for the as-a-service (XaaS) segment surged 85 percent year on year, its fastest growth ever, to a record US $10.6 billion, as AI-driven spending on infrastructure services (IaaS) more than doubled (up 106 percent from the prior year), to a new high of US $9.1 billion. Software-as-a-service (SaaS) ACV, meanwhile, was up 17 percent, to a record US $1.5 billion. It was the tenth straight quarter the XaaS segment has produced double-digit growth, averaging 42 percent in that timeframe.<\/p>\n

\nSpending on managed services advanced 12 percent year on year, to US $4.3 billion, although ACV was down 10 percent from the second quarter. A total of 241 managed services contracts were awarded in the quarter, down 2.4 percent from the prior year. Among them were six mega deals (ACV of US $100 million or more), up from two last year, with the ACV of those deals up 275 percent, to US $971 million. The increase in mega-deal volume and ACV reflects an overall surge in larger deal (US $50 million and higher) activity, where volume is up 78 percent year on year.<\/p>\n

\nWithin managed services, IT outsourcing (ITO) was up 6 percent, to US $2.8 billion, as data center services more than doubled and bundled application development and maintenance (ADM) and infrastructure services grew by double-digits, offsetting a 19 percent decline in standalone ADM services. Business process outsourcing (BPO), meanwhile, climbed 16 percent, to US $948 million, led by double-digit growth in industry-specific, customer engagement and facilities management services. Engineering, research and development (ER&D) services jumped 54 percent, to US $475 million, propelled by physical engineering work related to the buildout of Europe\u2019s data centers.<\/p>\n

\nBy industry, ACV was sharply higher (up 74 percent) in manufacturing, a sector that accounts for 25 percent of the region\u2019s managed services spend. Other large gainers were fast moving consumer goods and healthcare and pharmaceuticals, both up by triple digits, although each account for less than 10 percent of the region\u2019s ACV. On the other hand, two of the region\u2019s largest verticals for sourcing\u2014banking, financial services and insurance (BFSI) and energy\u2014saw double-digit declines.<\/p>\n

Geographic Performance<\/b><\/p>\n

\nDACH reclaimed the top spot as EMEA\u2019s largest managed services market, with ACV of US $1.5 billion in the third quarter, up 80 percent year on year. ACV in the UK and Ireland rose 13 percent, to US $1.1 billion, its fourth straight quarter exceeding the US $1 billion mark. France, the region\u2019s third largest market, grew 10 percent, to US $452 million. The smaller markets of Southern Europe and the Nordics, meanwhile, each declined by double digits.<\/p>\n

Nine-Month Results<\/b><\/p>\n

\nYear to date, combined market ACV climbed 43 percent, to US $39.8 billion. Managed services, at US $13.7 billion, was up 13 percent, while XaaS, at US $26.1 billion, soared 66.5 percent. A total of 819 managed services contracts were awarded year to date, up 7 percent from last year, including 11 mega-deals, three more than the prior year, with the ACV of those deals up 37 percent.<\/p>\n

\nWithin managed services, ITO was up 1.6 percent, at US $9.0 billion, while BPO advanced 58 percent, to US $3.2 billion, and ER&D rose 21 percent, to US $1.45 billion. On the cloud side, the IaaS market surged by 86 percent, to US $21.9 billion, while the SaaS market rose 7.6 percent, to US $4.3 billion.<\/p>\n

2026 Global Forecast<\/b><\/p>\n

\nFor the full year, ISG is maintaining its forecast of 2.1 percent growth for managed services. At the same time, ISG is raising its previous growth forecast for cloud-based XaaS to 60 percent, up from 30 percent last quarter. Within this segment, IaaS is expected to grow 80 percent and SaaS is expected to grow 12.5 percent\u2014the first time ISG has broken out IaaS and SaaS in its public forecasts.<\/p>\n

About the ISG Index\u2122<\/b><\/p>\n

\nThe ISG Index\u2122 is recognized as the authoritative source for marketplace intelligence on the global technology and business services industry. For 96 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.<\/p>\n

\nThe 3Q26 Global ISG Index results were presented during a webcast on October 8. To view a replay of the webcast and download the presentation slides, visit this webpage<\/a>.<\/p>\n

About ISG<\/b><\/p>\n

ISG<\/a> (Nasdaq: III<\/a>) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world\u2019s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments.<\/p>\n

\"\"<\/p>\n

View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20261012410014\/en\/<\/a><\/span><\/p>\n

Press Contacts:<\/b><\/p>\n

\nPhilipp Jaensch, ISG
\n
+49 151 730 365 76
\n
philipp.jaensch@isg-one.com<\/a><\/p>\n

\nWill Thoretz, ISG
\n
+1 203 517 3119
\n
will.thoretz@isg-one.com<\/a><\/p>\n

KEYWORDS:<\/b> United Kingdom Europe<\/p>\n

INDUSTRY KEYWORDS:<\/b> Apps\/Applications Technology Consulting Professional Services Software Data Analytics Outsourcing Business Data Management Artificial Intelligence<\/p>\n

MEDIA:<\/b><\/p>\n\n\n\n\n
Logo<\/b><\/font><\/td>\n<\/tr>\n
\"Logo\"<\/td>\n<\/tr>\n
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Demand for Tech Services in Europe Continues to Surge, Led by AI-Driven Infrastructure Spending in Q3: ISG Index\u2122 Combined market up 56%, as infrastructure spend more than doubles Managed services up 12%, as enterprises look for savings to fund AI LONDON–(BUSINESS WIRE)– Surging AI demand propelled Europe\u2019s technology services market to a new high in the third quarter, as infrastructure spending more than doubled and traditional managed services grew by double digits, the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm, finds. The EMEA ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows third-quarter ACV for the combined market (both … <\/p>\n

Continue reading “Demand for Tech Services in Europe Continues to Surge, Led by AI-Driven Infrastructure Spending in Q3: ISG Index\u2122”<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-1009096","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\nDemand for Tech Services in Europe Continues to Surge, Led by AI-Driven Infrastructure Spending in Q3: ISG Index\u2122 - Market Newsdesk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.marketnewsdesk.com\/index.php\/demand-for-tech-services-in-europe-continues-to-surge-led-by-ai-driven-infrastructure-spending-in-q3-isg-index\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Demand for Tech Services in Europe Continues to Surge, Led by AI-Driven Infrastructure Spending in Q3: ISG Index\u2122 - Market Newsdesk\" \/>\n<meta property=\"og:description\" content=\"Demand for Tech Services in Europe Continues to Surge, Led by AI-Driven Infrastructure Spending in Q3: ISG Index\u2122 Combined market up 56%, as infrastructure spend more than doubles Managed services up 12%, as enterprises look for savings to fund AI LONDON–(BUSINESS WIRE)– Surging AI demand propelled Europe\u2019s technology services market to a new high in the third quarter, as infrastructure spending more than doubled and traditional managed services grew by double digits, the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm, finds. 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Market Newsdesk","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.marketnewsdesk.com\/index.php\/demand-for-tech-services-in-europe-continues-to-surge-led-by-ai-driven-infrastructure-spending-in-q3-isg-index\/","og_locale":"en_US","og_type":"article","og_title":"Demand for Tech Services in Europe Continues to Surge, Led by AI-Driven Infrastructure Spending in Q3: ISG Index\u2122 - Market Newsdesk","og_description":"Demand for Tech Services in Europe Continues to Surge, Led by AI-Driven Infrastructure Spending in Q3: ISG Index\u2122 Combined market up 56%, as infrastructure spend more than doubles Managed services up 12%, as enterprises look for savings to fund AI LONDON–(BUSINESS WIRE)– Surging AI demand propelled Europe\u2019s technology services market to a new high in the third quarter, as infrastructure spending more than doubled and traditional managed services grew by double digits, the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm, finds. 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