{"id":928736,"date":"2026-01-20T13:33:39","date_gmt":"2026-01-20T18:33:39","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds\/"},"modified":"2026-01-20T13:33:39","modified_gmt":"2026-01-20T18:33:39","slug":"ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds\/","title":{"rendered":"AI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, ISG Index\u2122 Finds"},"content":{"rendered":"

<\/p>\n

AI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, ISG Index\u2122 Finds<\/b><\/p>\n

Combined market up 21%, as AI drives record demand for cloud services<\/b><\/p>\n

ISG forecasts 2.1% managed services growth, 20% XaaS growth globally for 2026<\/b><\/p>\n

STAMFORD, Conn.–(BUSINESS WIRE<\/a>)–
\nAI-driven demand for cloud services propelled the Americas technology services and software market to a record high in the fourth quarter, 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 Americas ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, shows fourth-quarter ACV for the combined market\u2014including both managed services and cloud-based as-a-service (XaaS)\u2014climbed 21 percent, to a record $17.9 billion. It was the fifth straight quarter growth has topped 20 percent versus the prior year. The growth rate of the latest quarter, however, was the weakest over that span, which has averaged 24.5 percent a quarter. Versus the third quarter, combined ACV was up 4 percent sequentially.<\/p>\n

\n\u201cThe Americas led the industry\u2019s global growth in 2025, fueled by the region\u2019s accelerating investment in AI-related services,\u201d said Todd Lavieri, vice chairman and president of ISG Americas and Asia Pacific. \u201cIn addition to continuing double-digit XaaS growth, the region crossed $23 billion in managed services ACV for the first time, supported by strong ITO activity, a rebound in BFSI, and continued momentum in infrastructure and bundled work. While the fourth quarter softened a bit, full-year performance confirms that the Americas remains the anchor of global growth.\u201d<\/p>\n

Q4 Results by Segment<\/b><\/p>\n

\nWhile managed services turned in a strong year, it finished 2025 on a weak note. Fourth-quarter ACV declined 6 percent, to $5.6 billion\u2014breaking a four-quarter streak of year-over-year gains averaging 13 percent a quarter. The Q4 managed services market also declined against the third quarter, down 12 percent sequentially.<\/p>\n

\nWithin managed services, IT outsourcing (ITO) ACV was down 9 percent, to $4.2 billion, with the only growth coming from bundled application development and maintenance (ADM) and infrastructure services and managed network services. Business process outsourcing (BPO), meanwhile, grew 14 percent, to $1.0 billion, on the strength of industry-specific services as well as facilities management, HR and finance and accounting services. Engineering (ER&D) services, on the other hand, declined 12 percent, to $387 million.<\/p>\n

\nDuring the quarter, 365 managed services contracts were awarded, down 4 percent from the prior year, the only quarter in 2025 that saw volume decline year over year. Three mega deals (contracts with annual value of at least $100 million) were awarded, down from 7 in the prior year. The ACV of those mega-deals was down by 58 percent against the fourth quarter of 2024.<\/p>\n

\nBy industry, several sectors recorded gains of more than 50 percent, including energy (up 89 percent) and healthcare\/pharma (up 85 percent). However, that was offset by declines in other large outsourcing industries, including banking, financial services and insurance (BFSI), down 17 percent, and manufacturing, down 31 percent.<\/p>\n

\nIn the cloud-based XaaS segment, fourth-quarter ACV surged 39 percent, to a record $12.3 billion, its best quarterly growth rate since the second quarter of 2022. It was the seventh straight quarter of XaaS growth, averaging 31 percent a quarter.<\/p>\n

\nWithin XaaS, infrastructure-as-a-service (IaaS) soared 52 percent, to $9.4 billion, fed by surging AI and cloud modernization demand. Software-as-a-service (SaaS) grew by a more modest 8 percent, to $3.0 billion.<\/p>\n

Full-Year Results<\/b><\/p>\n

\nFor the full year, the Americas combined market generated a record $65.9 billion of ACV, up 25 percent, a growth rate three times that of 2024 and the fastest annual growth since 2021.<\/p>\n

\nManaged services ACV advanced 9 percent, to a record $23.4 billion, on record volume of 1,640 contracts, up 12 percent from the prior year. Fifteen mega-deals were awarded, one off the 2024 pace, with the ACV of those contracts declining slightly year over year.<\/p>\n

\nAmong major industries, ACV in the all-important BFSI sector, the region\u2019s largest industry for sourcing, was up 18 percent for the year, to $6.9 billion\u2014equal to an incremental $1 billion in ACV, despite a soft fourth quarter. Other industries were also up double digits, including energy, up 50 percent, to $1.8 billion, and healthcare and pharma, up 30 percent, to $3.6 billion. Manufacturing, meanwhile, was off slightly, down 1.5 percent, to $3.5 billion.<\/p>\n

\nACV for XaaS segment climbed 35 percent, to $42.5 billion, or $11 billion more than the prior year. Growth accelerated from the 18 percent growth rate in 2024. The XaaS market now accounts for 64 percent of the combined market, up from 59 percent the previous year.<\/p>\n

\nWithin XaaS, IaaS was up 45 percent, to $30.9 billion, while SaaS rose 15 percent, to $11.6 billion.<\/p>\n

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

\nFor the full year, ISG is forecasting 2.1 percent revenue growth for managed services, and 20 percent revenue growth for cloud-based software and services (XaaS), the latter supported by continuing cloud migration, AI adoption, cybersecurity investment and platform-led consumption.<\/p>\n

\n\u201cAI is reshaping demand faster than managed services economics are adapting,\u201d said Lavieri. \u201cIt continues to accelerate growth in cloud, infrastructure and platforms, while putting pressure on traditional labor-based pricing and margin structures in managed services.\u201d<\/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 93 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 4Q25 Global ISG Index results were presented during a webcast on January 15. To view a replay of the webcast and download 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, 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.<\/p>\n

\"\"<\/p>\n

View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20260120893034\/en\/<\/a><\/span><\/p>\n

Press Contacts:
\n
<\/b>
Will 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> Connecticut United States North America<\/p>\n

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

MEDIA:<\/b><\/p>\n\n\n\n\n
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AI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, ISG Index\u2122 Finds Combined market up 21%, as AI drives record demand for cloud services ISG forecasts 2.1% managed services growth, 20% XaaS growth globally for 2026 STAMFORD, Conn.–(BUSINESS WIRE)– AI-driven demand for cloud services propelled the Americas technology services and software market to a record high in the fourth quarter, 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 Americas ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, shows fourth-quarter ACV for the combined market\u2014including both managed services and cloud-based as-a-service (XaaS)\u2014climbed 21 percent, … <\/p>\n

Continue reading “AI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, 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-928736","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\nAI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, 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\/ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"AI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, ISG Index\u2122 Finds - Market Newsdesk\" \/>\n<meta property=\"og:description\" content=\"AI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, ISG Index\u2122 Finds Combined market up 21%, as AI drives record demand for cloud services ISG forecasts 2.1% managed services growth, 20% XaaS growth globally for 2026 STAMFORD, Conn.–(BUSINESS WIRE)– AI-driven demand for cloud services propelled the Americas technology services and software market to a record high in the fourth quarter, 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 Americas ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, shows fourth-quarter ACV for the combined market\u2014including both managed services and cloud-based as-a-service (XaaS)\u2014climbed 21 percent, … Continue reading "AI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, ISG Index\u2122 Finds"\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.marketnewsdesk.com\/index.php\/ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds\/\" \/>\n<meta property=\"og:site_name\" content=\"Market Newsdesk\" \/>\n<meta property=\"article:published_time\" content=\"2026-01-20T18:33:39+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&sty=20260120893034r1&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\\\/ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds\\\/\"},\"author\":{\"name\":\"Newsdesk\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/#\\\/schema\\\/person\\\/482f27a394d4fda80ecb5499e519d979\"},\"headline\":\"AI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, ISG Index\u2122 Finds\",\"datePublished\":\"2026-01-20T18:33:39+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds\\\/\"},\"wordCount\":1048,\"image\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/cts.businesswire.com\\\/ct\\\/CT?id=bwnews&sty=20260120893034r1&sid=flmnd&distro=nx&lang=en\",\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds\\\/\",\"url\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds\\\/\",\"name\":\"AI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, 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\/ai-driven-demand-for-cloud-services-propels-americas-tech-market-to-new-high-in-q4-isg-index-finds\/","og_locale":"en_US","og_type":"article","og_title":"AI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, ISG Index\u2122 Finds - Market Newsdesk","og_description":"AI-Driven Demand for Cloud Services Propels Americas Tech Market to New High in Q4, ISG Index\u2122 Finds Combined market up 21%, as AI drives record demand for cloud services ISG forecasts 2.1% managed services growth, 20% XaaS growth globally for 2026 STAMFORD, Conn.–(BUSINESS WIRE)– AI-driven demand for cloud services propelled the Americas technology services and software market to a record high in the fourth quarter, 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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