{"id":929005,"date":"2026-01-20T19:22:18","date_gmt":"2026-01-21T00:22:18","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/asia-pacific-tech-services-market-slumps-in-q4-isg-index\/"},"modified":"2026-01-20T19:22:18","modified_gmt":"2026-01-21T00:22:18","slug":"asia-pacific-tech-services-market-slumps-in-q4-isg-index","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/asia-pacific-tech-services-market-slumps-in-q4-isg-index\/","title":{"rendered":"Asia Pacific Tech Services Market Slumps in Q4: ISG Index\u2122"},"content":{"rendered":"

<\/p>\n

Asia Pacific Tech Services Market Slumps in Q4: ISG Index\u2122<\/b><\/p>\n

Combined market ACV down 11%, with managed services down 36% and XaaS down 5%<\/b><\/p>\n

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

SYDNEY–(BUSINESS WIRE<\/a>)–
\nAsia Pacific\u2019s market for technology services and software declined sharply in the fourth quarter, on lower demand for both cloud services and managed services, 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 Asia Pacific ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows fourth-quarter ACV for the combined market (both cloud-based XaaS and managed services) down 11 percent versus the prior year, to US $5.5 billion. It was the region\u2019s worst performance since the first quarter of 2023, when the market was down 17 percent, and it ended a five-quarter growth streak during which growth averaged 8.5 percent.<\/p>\n

\n\u201cAsia Pacific had a very challenging fourth quarter and year in managed services,\u201d said Michael Gale, partner and regional leader, ISG Asia Pacific. \u201cWe saw growth in engineering services in both periods, related to the need to become AI-ready. And while XaaS spending was down for the quarter, for the full year it accelerated slightly from the prior year, driven largely by AI workloads, data platform expansion and enterprise cloud modernization.\u201d<\/p>\n

Fourth Quarter Results<\/b><\/p>\n

\nManaged services ACV in the fourth quarter slumped 36 percent, to US $735 million, and it was down 18 percent from the third quarter. A total of 64 contracts were awarded in the fourth quarter, down 13.5 percent from the prior year, but up 7 percent from the third quarter. New-scope and restructured contract volume were both down double digits versus the prior year, as was the number of smaller deals between $5 million and $9 million of ACV.<\/p>\n

\nWithin managed services, both IT outsourcing (ITO) and business process outsourcing (BPO) ACV were down sharply. ITO slid 46 percent, to US $464 million, and BPO dropped 42 percent, to US $119 million. Engineering services (ER&D) ACV, meanwhile, nearly doubled, up 93 percent, to US $152 million.<\/p>\n

\nFrom a geographic perspective, Southeast Asia and China were up triple digits, while the remaining markets were down, including Australia-New Zealand (ANZ), down 70 percent, and India, down 7 percent. By industry, ACV for media\/telecom and energy were both up triple digits, with most other verticals down significantly. Banking, financial services and insurance (BFSI) was down 60 percent and manufacturing was off 29 percent.<\/p>\n

\nIn the cloud space, XaaS declined 5 percent, to US $4.7 billion, versus the prior year and was down 3 percent from the third quarter. This was the first pullback in the region\u2019s XaaS market since the second quarter of 2024, and it broke a five-quarter growth streak during which ACV growth averaged 12 percent.<\/p>\n

\nWithin XaaS, infrastructure-as-a-service (IaaS) was down 6 percent, to US $4.1 billion, while software-as-a-service (SaaS) rose 5 percent, to US $586 million.<\/p>\n

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

\nFor the full year, Asia Pacific\u2019s combined market generated a record US $22.6 billion of ACV, up 2 percent. By comparison, the region grew 11 percent in 2024 and declined 6 percent in 2023, underscoring the choppy nature of its outsourcing spend.<\/p>\n

\nManaged services ACV for the year was down 27 percent, to US $3.3 billion, with 251 contracts awarded, down 12 percent. Most markets saw declines in spending, except India, which rose 4 percent. ANZ, meanwhile, was down 42 percent, to US $819 million, its lowest level of ACV since 2019. By industry, the regions two largest segments\u2014BFSI and manufacturing\u2014were down 34 percent and 15 percent, respectively. Telecom was one of the few bright spots, up 10 percent.<\/p>\n

\nThe XaaS segment, meanwhile, advanced 9 percent, to US $19.3 billion of ACV, a slight acceleration from 7 percent growth in 2024. IaaS was up 8 percent, to US $17.0 billion, while SaaS grew 19 percent, to US $2.3 billion. With the decline in managed services spending in 2025, XaaS accounted for 85.5 percent of the region\u2019s ACV, up from the typical 80 percent range.<\/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 Gale. \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\/20260120599871\/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> Australia\/Oceania Australia Asia Pacific<\/p>\n

INDUSTRY KEYWORDS:<\/b> Apps\/Applications Technology Security Consulting Professional Services Software Networks Internet Data Management Artificial Intelligence<\/p>\n

MEDIA:<\/b><\/p>\n\n\n\n\n
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<\/font><\/td>\n<\/tr>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Asia Pacific Tech Services Market Slumps in Q4: ISG Index\u2122 Combined market ACV down 11%, with managed services down 36% and XaaS down 5% ISG forecasts 2.1% managed services growth, 20% XaaS growth globally in 2026 SYDNEY–(BUSINESS WIRE)– Asia Pacific\u2019s market for technology services and software declined sharply in the fourth quarter, on lower demand for both cloud services and managed services, 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 Asia Pacific ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows fourth-quarter ACV for the combined market (both cloud-based XaaS and managed services) down 11 percent versus … <\/p>\n

Continue reading “Asia Pacific Tech Services Market Slumps in Q4: 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-929005","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\nAsia Pacific Tech Services Market Slumps in Q4: 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\/asia-pacific-tech-services-market-slumps-in-q4-isg-index\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Asia Pacific Tech Services Market Slumps in Q4: ISG Index\u2122 - Market Newsdesk\" \/>\n<meta property=\"og:description\" content=\"Asia Pacific Tech Services Market Slumps in Q4: ISG Index\u2122 Combined market ACV down 11%, with managed services down 36% and XaaS down 5% ISG forecasts 2.1% managed services growth, 20% XaaS growth globally in 2026 SYDNEY–(BUSINESS WIRE)– Asia Pacific\u2019s market for technology services and software declined sharply in the fourth quarter, on lower demand for both cloud services and managed services, 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 Asia Pacific ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows fourth-quarter ACV for the combined market (both cloud-based XaaS and managed services) down 11 percent versus … Continue reading "Asia Pacific Tech Services Market Slumps in Q4: ISG Index\u2122"\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.marketnewsdesk.com\/index.php\/asia-pacific-tech-services-market-slumps-in-q4-isg-index\/\" \/>\n<meta property=\"og:site_name\" content=\"Market Newsdesk\" \/>\n<meta property=\"article:published_time\" content=\"2026-01-21T00:22:18+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&sty=20260120599871r1&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\\\/asia-pacific-tech-services-market-slumps-in-q4-isg-index\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/asia-pacific-tech-services-market-slumps-in-q4-isg-index\\\/\"},\"author\":{\"name\":\"Newsdesk\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/#\\\/schema\\\/person\\\/482f27a394d4fda80ecb5499e519d979\"},\"headline\":\"Asia Pacific Tech Services Market Slumps in Q4: ISG Index\u2122\",\"datePublished\":\"2026-01-21T00:22:18+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/asia-pacific-tech-services-market-slumps-in-q4-isg-index\\\/\"},\"wordCount\":942,\"image\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/asia-pacific-tech-services-market-slumps-in-q4-isg-index\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/cts.businesswire.com\\\/ct\\\/CT?id=bwnews&sty=20260120599871r1&sid=flmnd&distro=nx&lang=en\",\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/asia-pacific-tech-services-market-slumps-in-q4-isg-index\\\/\",\"url\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/asia-pacific-tech-services-market-slumps-in-q4-isg-index\\\/\",\"name\":\"Asia Pacific Tech Services Market Slumps in Q4: ISG Index\u2122 - 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