{"id":837809,"date":"2025-04-15T20:03:10","date_gmt":"2025-04-16T00:03:10","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/"},"modified":"2025-04-15T20:03:10","modified_gmt":"2025-04-16T00:03:10","slug":"strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/","title":{"rendered":"Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds"},"content":{"rendered":"

<\/p>\n

Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds<\/b><\/p>\n

Combined market up 10%, driven by 19% increase in XaaS demand<\/b><\/p>\n

Managed services slumps 26% in the face of economic uncertainty<\/b><\/p>\n

SYDNEY–(BUSINESS WIRE<\/a>)–
\nAsia Pacific\u2019s IT and business services market grew by double digits in the first quarter, powered by strong cloud demand amid a slump in managed services spending, 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 Asia Pacific ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows ACV for the combined market\u2014both managed services and as-a-service (XaaS)\u2014rose 10 percent versus the prior year, to US $5.3 billion, the region\u2019s fifth straight quarter of year-on-year growth.\n<\/p>\n

\nAsia Pacific was powered by strong demand for cloud services, with as-a-service spending climbing 19 percent, to US $4.5 billion. Infrastructure-as-a-service (IaaS) advanced 18 percent, to US $3.95 billion, while software-as-a-service (SaaS) climbed 30 percent, to US $556 million.\n<\/p>\n

\nManaged services ACV, meanwhile, slumped 26 percent, to US $778 million, its weakest result since the third quarter of 2023 and coming on the heels of four straight quarters of double-digit growth averaging 31 percent per quarter. IT outsourcing (ITO) dropped 16 percent, to US $539 million, with application development and maintenance (ADM), up 7 percent, and multi-tower infrastructure, up 88 percent, the only areas of growth. Business process outsourcing (BPO) fell by 31 percent, to US $155 million, and engineering services (ER&D), broken out from BPO for the first time, declined 54 percent, to US $84 million.\n<\/p>\n

\nA total of 57 managed services contracts were awarded in the first quarter, down 14 percent year on year. A major driver of the shortfall was a decline in the number of smaller deals, those between US $5 million and US $9 million, which slumped 26 percent versus the prior year.\n<\/p>\n

\n\u201cThe Asia Pacific market continued to be driven by strong demand for cloud-based services, as companies forged ahead with digital transformation and AI adoption,\u201d said Michael Gale, partner and regional leader, ISG Asia Pacific. \u201cThe focus remains on cost resiliency, productivity and IT modernization.\u201d\n<\/p>\n

\nGale said the market is likely headed into a period of increased volatility, driven by heightened economic uncertainty and the impact of U.S. tariffs. \u201cOrganizations are assessing the indirect impact of U.S. tariffs and the potential for further economic disruption,\u201d he said.\n<\/p>\n

\nOne potential sign of that impact, Gale said, is the sharp decline in the number of small deals during the first quarter. \u201cThat could be a signal that discretionary spending is under pressure,\u201d he said.\n<\/p>\n

Results by Industry, Geography<\/b><\/p>\n

\nMost industries turned negative versus the prior year, with the exception of the media\/telecoms sector, which advanced by triple digits, and the region\u2019s second largest vertical, manufacturing, which advanced nearly 7 percent. On the other hand, financial services, the region\u2019s largest vertical, fell by 28 percent year on year.\n<\/p>\n

\nBy geography, most markets were down versus the prior year. Australia-New Zealand, the region\u2019s largest market, pulled back 35 percent year on year, while Southeast Asia and China both declined by more than 70 percent. Japan and India were the lone bright spots, both up by double digits.\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 Gale. \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 1Q24 Global ISG Index results were presented during a webcast 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\/20250415818426\/en\/<\/a><\/span><\/p>\n

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

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

KEYWORDS:<\/b> Australia\/Oceania Australia<\/p>\n

INDUSTRY KEYWORDS:<\/b> Professional Services Data Analytics Technology Other Technology Software Networks Artificial Intelligence<\/p>\n

MEDIA:<\/b><\/p>\n\n\n\n\n
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Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds Combined market up 10%, driven by 19% increase in XaaS demand Managed services slumps 26% in the face of economic uncertainty SYDNEY–(BUSINESS WIRE)– Asia Pacific\u2019s IT and business services market grew by double digits in the first quarter, powered by strong cloud demand amid a slump in managed services spending, 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 Asia Pacific ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows ACV for the combined market\u2014both managed services and as-a-service … <\/p>\n

Continue reading “Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds”<\/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-837809","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\nStrong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds - 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\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds - Market Newsdesk\" \/>\n<meta property=\"og:description\" content=\"Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds Combined market up 10%, driven by 19% increase in XaaS demand Managed services slumps 26% in the face of economic uncertainty SYDNEY–(BUSINESS WIRE)– Asia Pacific\u2019s IT and business services market grew by double digits in the first quarter, powered by strong cloud demand amid a slump in managed services spending, 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 Asia Pacific ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows ACV for the combined market\u2014both managed services and as-a-service … Continue reading "Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds"\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.marketnewsdesk.com\/index.php\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/\" \/>\n<meta property=\"og:site_name\" content=\"Market Newsdesk\" \/>\n<meta property=\"article:published_time\" content=\"2025-04-16T00:03:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&sty=20250415818426r1&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\\\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\\\/\"},\"author\":{\"name\":\"Newsdesk\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/#\\\/schema\\\/person\\\/482f27a394d4fda80ecb5499e519d979\"},\"headline\":\"Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds\",\"datePublished\":\"2025-04-16T00:03:10+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\\\/\"},\"wordCount\":966,\"image\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/cts.businesswire.com\\\/ct\\\/CT?id=bwnews&sty=20250415818426r1&sid=flmnd&distro=nx&lang=en\",\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\\\/\",\"url\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\\\/\",\"name\":\"Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 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\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/","og_locale":"en_US","og_type":"article","og_title":"Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds - Market Newsdesk","og_description":"Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds Combined market up 10%, driven by 19% increase in XaaS demand Managed services slumps 26% in the face of economic uncertainty SYDNEY–(BUSINESS WIRE)– Asia Pacific\u2019s IT and business services market grew by double digits in the first quarter, powered by strong cloud demand amid a slump in managed services spending, 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 Asia Pacific ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows ACV for the combined market\u2014both managed services and as-a-service … Continue reading \"Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds\"","og_url":"https:\/\/www.marketnewsdesk.com\/index.php\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/","og_site_name":"Market Newsdesk","article_published_time":"2025-04-16T00:03:10+00:00","og_image":[{"url":"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&sty=20250415818426r1&sid=flmnd&distro=nx&lang=en","type":"","width":"","height":""}],"author":"Newsdesk","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Newsdesk","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.marketnewsdesk.com\/index.php\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/#article","isPartOf":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/"},"author":{"name":"Newsdesk","@id":"https:\/\/www.marketnewsdesk.com\/#\/schema\/person\/482f27a394d4fda80ecb5499e519d979"},"headline":"Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds","datePublished":"2025-04-16T00:03:10+00:00","mainEntityOfPage":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/"},"wordCount":966,"image":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/#primaryimage"},"thumbnailUrl":"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&sty=20250415818426r1&sid=flmnd&distro=nx&lang=en","inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.marketnewsdesk.com\/index.php\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/","url":"https:\/\/www.marketnewsdesk.com\/index.php\/strong-cloud-demand-fuels-q1-double-digit-growth-in-asia-pacifics-it-and-business-services-market-isg-index-finds\/","name":"Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific\u2019s IT and Business Services Market, ISG Index\u2122 Finds - 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