{"id":837471,"date":"2025-04-15T09:09:24","date_gmt":"2025-04-15T13:09:24","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index\/"},"modified":"2025-04-15T09:09:24","modified_gmt":"2025-04-15T13:09:24","slug":"americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index\/","title":{"rendered":"Americas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: ISG Index\u2122"},"content":{"rendered":"

<\/p>\n

Americas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: ISG Index\u2122<\/b><\/p>\n

Combined market up 19%, driven by 33 percent growth in XaaS ACV<\/b><\/p>\n

Managed services down slightly, showing signs of pressure on discretionary spending<\/b><\/p>\n

STAMFORD, Conn.–(BUSINESS WIRE<\/a>)–
\nDemand for IT and business services in the Americas rose by double digits in the first quarter, despite growing economic uncertainty, according to 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.\n<\/p>\n

\nThe Americas ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, shows first-quarter ACV for the combined market\u2014including both managed services and cloud-based as-a-service (XaaS)\u2014was $14.5 billion, up 19 percent from a year ago. Versus the fourth quarter of 2024, the combined market was down slightly (0.2 percent).\n<\/p>\n

\n\u201cThe Americas market was driven by strong cloud and AI demand, as companies continued their digital transformations in Q1 despite economic uncertainty and the prospect of U.S. tariffs,\u201d said Todd Lavieri, vice chairman and president of ISG Americas and Asia Pacific. \u201cEnterprises remain focused on cost resiliency, productivity and IT modernization. The managed services segment, however, showed some weakness, with smaller deals down 5 percent in the quarter versus the prior year. This could be a sign that discretionary spending is under pressure.\u201d\n<\/p>\n

\nLavieri said ISG expects increased volatility in the months ahead. \u201cThe introduction of sweeping tariffs and the potential for retaliatory measures by U.S. trading partners have raised the level of uncertainty. Companies are likely to remain cautious in the near term, even after the U.S. administration\u2019s decision last week to pause most additional tariffs for 90 days.\u201d\n<\/p>\n

Q1 Results by Segment<\/b><\/p>\n

\nThe managed services segment generated first-quarter ACV of $5.3 billion, down 0.4 percent from the prior year and down 8 percent from the prior quarter.\n<\/p>\n

\nA total of 377 managed services contracts were signed in the first quarter, down 1.8 percent versus a year ago, but up 4.1 percent versus the fourth quarter. Among them were three mega deals (contracts with ACV of $100 million or more), up from two in the first quarter of 2024, but down sharply from the eight mega-deals signed in Q4. Meanwhile, the number of smaller deals\u2014those valued at between $5 million and $9 million\u2014declined 5 percent versus the prior year, marking the third time in the last four quarters this segment has seen year-over-year declines.\n<\/p>\n

\nBy industry, gainers included financial services (up 12 percent), consumer package goods (up 47 percent) and media\/telecoms (up 31 percent). Defensive industries such as energy, healthcare and retail all fell back into negative territory for the quarter.\n<\/p>\n

\nWithin managed services, IT outsourcing (ITO) ACV rose 5 percent, to $3.8 billion, driven by strong growth in data center services and more moderate growth in application development and maintenance (ADM) services. Business processing outsourcing (BPO) ACV, meanwhile, fell 39 percent, to $803 million, with customer engagement the only area showing growth against a difficult prior-year comparison. Engineering, research and development (ER&D) services, broken out from BPO for the first time this quarter, was up 81 percent, to $687 million.\n<\/p>\n

\nACV for XaaS was up 33 percent, to $9.2 billion, the first time it surpassed the $9-billion mark in a quarter. It was the fourth straight quarter that XaaS has generated double-digit growth versus the prior year, although growth decelerated by 280 basis points from the fourth quarter.\n<\/p>\n

\nWithin this segment ACV for infrastructure-as-a-service (IaaS) soared 44 percent versus the prior year, to $6.6 billion, while software-as-a-service (SaaS) advanced 12 percent, at $2.6 billion.\n<\/p>\n

2025 Global Forecast<\/b><\/p>\n

\nHeightened uncertainty from trade policy, geopolitical tensions and evolving regulations are beginning to weigh on the industry\u2019s second-quarter outlook, ISG said.\n<\/p>\n

\nISG\u2019s forecasts for market growth in 2025 are based on two scenarios. In the first scenario, the tariff environment stabilizes by midyear, and the market sees faster decision-making in the second half. Under that scenario, ISG forecasts XaaS growth of 18 percent for 2025, unchanged from its January forecast. ISG\u2019s forecast for managed services growth would be 1.3 percent, down from its January forecast of 4.5 percent.\n<\/p>\n

\nIn the second scenario, tariffs would extend through the third quarter or beyond, compounded by immigration enforcement, prevailing wage issues or retaliatory digital services taxes in the EU, resulting in a longer pullback in discretionary demand and delays in award conversion. In this more bearish case, ISG forecasts XaaS growth for the year would moderate to 15 percent, while managed services spending would be negative 2.4 percent, a nearly 700 basis-point swing from its January forecast.\n<\/p>\n

\n\u201cWe remain cautious in our base case, but not pessimistic,\u201d said Lavieri. \u201cThe signals from Q1 are fundamentally strong. The shift we\u2019re seeing is not one of declining demand, but one of delayed commitment.\u201d\n<\/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 90 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.\n<\/p>\n

\nThe 1Q25 Global ISG Index results were presented on April 10. To view a replay of the webcast and download presentation slides, visit this webpage<\/a>.\n<\/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, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.\n<\/p>\n

\"\"<\/p>\n

View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20250415967351\/en\/<\/a><\/span><\/p>\n

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

Julianna Sheridan, Matter Communications for ISG
\n
+1 978-518-4520
\n
isg@matternow.com<\/a><\/p>\n

KEYWORDS:<\/b> United States North America Connecticut<\/p>\n

INDUSTRY KEYWORDS:<\/b> Consulting Data Management Technology Professional Services Security Software Artificial Intelligence Networks Internet Hardware Electronic Design Automation<\/p>\n

MEDIA:<\/b><\/p>\n\n\n\n\n
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Americas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: ISG Index\u2122 Combined market up 19%, driven by 33 percent growth in XaaS ACV Managed services down slightly, showing signs of pressure on discretionary spending STAMFORD, Conn.–(BUSINESS WIRE)– Demand for IT and business services in the Americas rose by double digits in the first quarter, despite growing economic uncertainty, according to the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm. The Americas ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, shows first-quarter ACV for the combined market\u2014including both managed services and cloud-based as-a-service (XaaS)\u2014was $14.5 billion, … <\/p>\n

Continue reading “Americas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: 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-837471","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\nAmericas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: 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\/americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Americas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: ISG Index\u2122 - Market Newsdesk\" \/>\n<meta property=\"og:description\" content=\"Americas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: ISG Index\u2122 Combined market up 19%, driven by 33 percent growth in XaaS ACV Managed services down slightly, showing signs of pressure on discretionary spending STAMFORD, Conn.–(BUSINESS WIRE)– Demand for IT and business services in the Americas rose by double digits in the first quarter, despite growing economic uncertainty, according to the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm. The Americas ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, shows first-quarter ACV for the combined market\u2014including both managed services and cloud-based as-a-service (XaaS)\u2014was $14.5 billion, … Continue reading "Americas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: ISG Index\u2122"\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.marketnewsdesk.com\/index.php\/americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index\/\" \/>\n<meta property=\"og:site_name\" content=\"Market Newsdesk\" \/>\n<meta property=\"article:published_time\" content=\"2025-04-15T13:09:24+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&sty=20250415967351r1&sid=flmnd&distro=nx&lang=en\" \/>\n<meta name=\"author\" content=\"Newsdesk\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Newsdesk\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index\\\/\"},\"author\":{\"name\":\"Newsdesk\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/#\\\/schema\\\/person\\\/482f27a394d4fda80ecb5499e519d979\"},\"headline\":\"Americas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: ISG Index\u2122\",\"datePublished\":\"2025-04-15T13:09:24+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index\\\/\"},\"wordCount\":1011,\"image\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/cts.businesswire.com\\\/ct\\\/CT?id=bwnews&sty=20250415967351r1&sid=flmnd&distro=nx&lang=en\",\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index\\\/\",\"url\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index\\\/\",\"name\":\"Americas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: ISG Index\u2122 - 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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\/americas-it-and-business-services-sector-grows-by-double-digits-in-q1-despite-growing-uncertainty-isg-index\/","og_locale":"en_US","og_type":"article","og_title":"Americas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: ISG Index\u2122 - Market Newsdesk","og_description":"Americas\u2019 IT and Business Services Sector Grows by Double Digits in Q1, Despite Growing Uncertainty: ISG Index\u2122 Combined market up 19%, driven by 33 percent growth in XaaS ACV Managed services down slightly, showing signs of pressure on discretionary spending STAMFORD, Conn.–(BUSINESS WIRE)– Demand for IT and business services in the Americas rose by double digits in the first quarter, despite growing economic uncertainty, according to the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm. 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