{"id":952680,"date":"2026-04-20T04:03:26","date_gmt":"2026-04-20T08:03:26","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index\/"},"modified":"2026-04-20T04:03:26","modified_gmt":"2026-04-20T08:03:26","slug":"europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index\/","title":{"rendered":"Europe\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: ISG Index\u2122"},"content":{"rendered":"

<\/p>\n

Europe\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: ISG Index\u2122<\/b><\/p>\n

Combined market up 30%, to record US $12.2 billion, fueled by strong AI-driven IaaS growth<\/b><\/p>\n

LONDON–(BUSINESS WIRE<\/a>)–
\nDemand for technology services in Europe continued to accelerate in the first quarter, driven by strong demand for the cloud-based infrastructure services needed to power AI, the latest state-of-the-industry report from Information Services Group (ISG<\/a>) (Nasdaq: III<\/a>), a leading global technology research and advisory firm, shows.<\/p>\n

\nThe EMEA 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 (both managed services and cloud-based as-a-service) climbed 30 percent in the first quarter, to a record US $12.2 billion. Sequentially, the market was up 12 percent from its previous high in the fourth quarter. Over the last seven quarters, EMEA\u2019s combined market has risen by double-digits in six of them, averaging 22 percent year-on-year growth in that span.<\/p>\n

\n\u201cEurope has clearly turned the corner, as the region continues to embrace the power of AI to transform business,\u201d said Anthony Drake, president of ISG\u2019s EMEA region. \u201cWe\u2019re seeing explosive growth in infrastructure services and steady growth in managed services, as companies focus on cost optimization to fund their AI ambitions. In the first quarter, business process outsourcing was a bright spot, as AI begins to positively impact these services.<\/p>\n

\n\u201cOverall, the promise of AI is clearly outweighing the impact of geopolitical concerns,\u201d Drake added.<\/p>\n

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

\nACV in the as-a-service (XaaS) segment soared 52 percent year on year, to a record US $7.5 billion. It was the segment\u2019s highest growth rate since the third quarter of 2021, and the eighth consecutive quarter of double-digit year-on-year growth, during which time growth averaged 36.5 percent a quarter. Sequentially, the XaaS market was up 17 percent versus the fourth quarter of 2025.<\/p>\n

\nWithin this segment, infrastructure-as-a-service (IaaS) climbed 72 percent, to US $6.1 billion\u2014its fastest quarterly growth rate in more than seven years\u2014while software-as-a-service (SaaS) advanced only 0.7 percent, to US $1.4 billion.<\/p>\n

\nManaged services ACV in the first quarter rose nearly 6 percent, US $4.7 billion, its second-best quarter ever, and only the second time EMEA produced two US $4 billion-plus quarters in a row. There were 285 managed services contracts signed in the quarter, up 2 percent from the prior year, including three mega deals (ACV of US $100 million or more), the same as last year, but with the ACV of those deals up 22 percent year on year. New scope ACV was up 15 percent, to US $3.3 billion, only the second time the region has reached that figure.<\/p>\n

\nWithin managed services, IT outsourcing (ITO) slid 16 percent, to US $2.9 billion, with all areas down except for bundled infrastructure and application development and maintenance (ADM) services, up nearly 300 percent, and end user computing (EUC), up 60 percent. Business process outsourcing (BPO), meanwhile, soared 145 percent, to US $1.3 billion, versus a weak first quarter last year, but was up 25 percent sequentially. The biggest gainers were HR, facilities management and industry-specific services, all up triple digits, while call center services, the largest area of BPO, eked out a 0.7 percent increase. Engineering, research and development (ER&D) services, meanwhile, was up 4 percent, to US $399 million.<\/p>\n

\nBy industry, managed services ACV was sharply higher in telecommunications (up 192 percent) and retail (up 105 percent), while energy and transportation were both up about 30 percent. However, the region\u2019s two largest sectors\u2014banking, financial services and insurance (BFSI) and manufacturing\u2014were a drag on growth, down 43 percent and 30 percent, respectively.<\/p>\n

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

\nThe region\u2019s largest market, the U.K., posted its second consecutive US $1 billion-plus quarter, up 6 percent year on year, to US $1.2 billion. France rose 15 percent, to US $954 million, while Benelux and Southern Europe, two similar-sized markets at about US $400 million, were up 22 percent and 8 percent, respectively. DACH, however, declined 20 percent, to US $716 million, its slowest quarter in two years, and the Nordics was down 33 percent, to US $359 million, its worst quarter since the third quarter of 2024.<\/p>\n

New ISG AI Index\u2122 Launched<\/b><\/p>\n

\nISG last week announced<\/a> the launch of its ISG AI Index\u2122, a first-of-its-kind benchmark that measures how AI is impacting the global technology and business services sector. The initial findings were presented during the ISG Index call last Thursday. They show that infrastructure-as-a-service (IaaS) has seen the greatest impact from AI, up 160 percent. Software as-a-service (SaaS) has risen 53 percent while managed services is up only slightly, at 0.3 percent. On a market-weighted basis, the composite ISG AI Index was up 77 percent since inception, dating to December 2022, just after the launch of ChatGPT 3.0 and the start of the current AI era. Visit this webpage<\/a> for more details.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n

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

\nISG said it is raising its full-year forecast for XaaS revenue growth to 25 percent, up 400 basis points from its January forecast, and is holding its managed services growth forecast at 2.1 percent for the year. The forecasts reflect ISG\u2019s view that XaaS growth will continue to accelerate on strong demand for AI, while managed services growth will remain \u201csteady\u201d as enterprises focus on cost takeout to fund their AI initiatives.<\/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 94 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 1Q26 Global ISG Index results were presented during a webcast last week. 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 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\/20260420005356\/en\/<\/a><\/span><\/p>\n

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

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

Will 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> Consulting Data Management Technology Professional Services Security Other Technology Software Artificial Intelligence Networks Internet Electronic Design Automation<\/p>\n

MEDIA:<\/b><\/p>\n\n\n\n\n
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Europe\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: ISG Index\u2122 Combined market up 30%, to record US $12.2 billion, fueled by strong AI-driven IaaS growth LONDON–(BUSINESS WIRE)– Demand for technology services in Europe continued to accelerate in the first quarter, driven by strong demand for the cloud-based infrastructure services needed to power AI, the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, shows. The EMEA 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 (both managed services and cloud-based as-a-service) climbed 30 percent in the first quarter, to a record US … <\/p>\n

Continue reading “Europe\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: 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-952680","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\nEurope\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: 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\/europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Europe\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: ISG Index\u2122 - Market Newsdesk\" \/>\n<meta property=\"og:description\" content=\"Europe\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: ISG Index\u2122 Combined market up 30%, to record US $12.2 billion, fueled by strong AI-driven IaaS growth LONDON–(BUSINESS WIRE)– Demand for technology services in Europe continued to accelerate in the first quarter, driven by strong demand for the cloud-based infrastructure services needed to power AI, the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, shows. 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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\/europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index\/","og_locale":"en_US","og_type":"article","og_title":"Europe\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: ISG Index\u2122 - Market Newsdesk","og_description":"Europe\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: ISG Index\u2122 Combined market up 30%, to record US $12.2 billion, fueled by strong AI-driven IaaS growth LONDON–(BUSINESS WIRE)– Demand for technology services in Europe continued to accelerate in the first quarter, driven by strong demand for the cloud-based infrastructure services needed to power AI, the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, shows. The EMEA 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 (both managed services and cloud-based as-a-service) climbed 30 percent in the first quarter, to a record US … Continue reading \"Europe\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: ISG Index\u2122\"","og_url":"https:\/\/www.marketnewsdesk.com\/index.php\/europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index\/","og_site_name":"Market Newsdesk","article_published_time":"2026-04-20T08:03:26+00:00","og_image":[{"url":"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&sty=20260420005356r1&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\/europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index\/#article","isPartOf":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index\/"},"author":{"name":"Newsdesk","@id":"https:\/\/www.marketnewsdesk.com\/#\/schema\/person\/482f27a394d4fda80ecb5499e519d979"},"headline":"Europe\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: ISG Index\u2122","datePublished":"2026-04-20T08:03:26+00:00","mainEntityOfPage":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index\/"},"wordCount":1081,"image":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index\/#primaryimage"},"thumbnailUrl":"https:\/\/cts.businesswire.com\/ct\/CT?id=bwnews&sty=20260420005356r1&sid=flmnd&distro=nx&lang=en","inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.marketnewsdesk.com\/index.php\/europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index\/","url":"https:\/\/www.marketnewsdesk.com\/index.php\/europes-technology-services-market-accelerates-in-q1-on-higher-demand-for-ai-isg-index\/","name":"Europe\u2019s Technology Services Market Accelerates in Q1 on Higher Demand for AI: ISG Index\u2122 - 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