{"id":980273,"date":"2026-07-09T10:07:13","date_gmt":"2026-07-09T14:07:13","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/global-tech-services-market-grows-at-fastest-pace-ever-in-q2-propelled-by-soaring-ai-demand-isg-index\/"},"modified":"2026-07-09T10:07:13","modified_gmt":"2026-07-09T14:07:13","slug":"global-tech-services-market-grows-at-fastest-pace-ever-in-q2-propelled-by-soaring-ai-demand-isg-index","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/global-tech-services-market-grows-at-fastest-pace-ever-in-q2-propelled-by-soaring-ai-demand-isg-index\/","title":{"rendered":"Global Tech Services Market Grows at Fastest Pace Ever in Q2, Propelled by Soaring AI Demand: ISG Index\u2122"},"content":{"rendered":"

<\/p>\n

Global Tech Services Market Grows at Fastest Pace Ever in Q2, Propelled by Soaring AI Demand: ISG Index\u2122<\/b><\/p>\n

Combined market ACV up 43%, to record $42.4 billion<\/b><\/p>\n

Market driven by cloud XaaS, up 65%, with managed services up 2.7%<\/b><\/p>\n

ISG raises 2026 XaaS growth forecast to 30%, maintains managed services forecast at 2.1%<\/b><\/p>\n

STAMFORD, Conn.–(BUSINESS WIRE<\/a>)–
\nThe global market for technology services grew at its fastest pace ever in the second quarter, propelled by soaring enterprise demand for cloud services to support accelerating AI ambitions, 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.<\/p>\n

\nData from the global ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, show second-quarter ACV for the combined global market (both managed services and cloud-based as-a-service) surged 43 percent versus the prior year\u2014the market\u2019s highest growth rate ever\u2014to a record $42.4 billion. It was the market\u2019s eighth consecutive quarter of double-digit growth, up an average of 22 percent in that span.<\/p>\n

\n\u201cThe technology services industry continues to ride high, driven largely by AI-fueled demand for hyperscaler services,\u201d said Steve Hall, ISG\u2019s chief AI officer and leader of the ISG Index. \u201cManaged services, meanwhile, continues to show resilience, but the nature of the demand is changing, as traditional labor-intensive work is increasingly displaced by LLMs. Providers are facing more competition and changing economics, include pricing deflation and more provider-funded, AI-powered transformation embedded within contracts.\u201d<\/p>\n

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

\nThe as-a-service (XaaS) segment soared 65 percent versus the prior year, to a record $31.5 billion. That was the highest growth rate for XaaS ever recorded by the ISG Index\u2014beating the previous mark set 10 years ago and representing an acceleration of 24 percentage points over the first quarter. The second-quarter results extended the XaaS segment\u2019s double-digit growth streak to eight straight quarters, during which growth has averaged 34 percent.<\/p>\n

\nWithin the XaaS segment, infrastructure-as-a-service (IaaS) saw explosive growth, with ACV surging 78 percent, to a record $25.8 billion, or $11.3 billion higher than the prior year, fed by an accelerating appetite for AI. Software-as-a-service (SaaS) also delivered outsized results, up 25 percent versus the prior year, to $5.7 billion, as AI is becoming part of almost every application.<\/p>\n

\n\u201cA meaningful portion of current infrastructure spending is coming from a relatively small number of frontier AI model providers, including companies like OpenAI and Anthropic, which are purchasing enormous amounts of compute capacity,\u201d Hall noted.<\/p>\n

\nThe managed services segment generated second-quarter ACV of $10.9 billion, up 2.7 percent versus the prior year, but down 2.7 percent sequentially from the first quarter. A total of 725 managed services contracts were awarded during the second quarter, up 3 percent from the prior year but down 2 percent sequentially. Seven of the Q2 awards were mega-deals (contracts with ACV of $100 million or more), down from 8 such deals last year, and their ACV was down 27 percent.<\/p>\n

\nNew-scope awards drove the managed services market in Q2, with ACV up 14 percent, to a record $8.2 billion, and the number of deals signed representing nearly 75 percent of all managed services bookings in the quarter.<\/p>\n

\n\u201cEnterprises are actively reshaping their sourcing portfolios,\u201d said Hall. \u201cMuch of this activity appears to reflect work moving between providers and changing operating models rather than entirely new outsourcing demand.\u201d<\/p>\n

\nAmong industries, managed services demand was led by the consumer packaged goods sector, with ACV up 59 percent, followed by transportation, up 28 percent; energy, up 21 percent, and banking, financial services and insurance (BFSI), up 16.5 percent. Meanwhile, manufacturing, the second-largest industry vertical after BFSI, fell 11 percent, its third straight quarter of decline.<\/p>\n

\nWithin managed services, IT outsourcing (ITO) ACV declined 3 percent, to $7.7 billion. Application development and maintenance (ADM) services remained under pressure, as AI-led work ate into the ACV of labor-based models. Bundled ADM and infrastructure services fared better, with enterprises focusing on cost optimization and transformation.<\/p>\n

\nBusiness process outsourcing (BPO) ACV, at $2.3 billion, rose 34 percent from the prior year, but fell 8 percent from the first quarter. Strength was seen in such back-office areas as HR, facilities and supply chain management, as well as industry-specific services, while customer experience services declined.<\/p>\n

\nACV for engineering, research and development (ER&D) services, meanwhile, fell 6 percent against a strong year-ago quarter, to $931 million, even as deal volume rose 34 percent. Like ADM, ER&D is being impacted by AI, especially in areas like software engineering and embedded engineering, where LLMs are displacing human labor.<\/p>\n

First-Half Results<\/b><\/p>\n

\nIn the first half, the combined market was up 35 percent, to $81.3 billion. Managed services, at $22.1 billion, was up 2.7 percent, while XaaS, at $59.2 billion, was up 53 percent year over year. A total of 1,464 managed services contracts were awarded in the first half, up 1.6 percent, including 13 mega-deals, one less than the prior year, with the ACV of those deals down 10 percent.<\/p>\n

\nWithin managed services, ITO slid 5.6 percent, to $15.5 billion; BPO climbed 47 percent, to $4.8 billion, and ER&D declined 2.8 percent, to $1.8 billion. On the cloud side, IaaS soared 66 percent, to $48.4 billion, and SaaS rose 14 percent, to $10.8 billion, compared with the first half of 2025.<\/p>\n

Sentiment Analysis Added to ISG AI Index\u2122<\/b><\/p>\n

\nISG said it expanded its ISG AI Index\u2122<\/a> this quarter to include a new sentiment analysis, which evaluates enterprise views on AI adoption.<\/p>\n

\n\u201cOur research reveals that enterprise confidence in AI remains high, but the focus is shifting to value creation,\u201d Hall said. \u201cManagement teams are spending less time talking about AI opportunity and much more time talking about execution, return on investment and business outcomes.\u201d<\/p>\n

\nFurther details are available by viewing today\u2019s ISG Index<\/a> call replay and presentation.<\/p>\n

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

\nFor the full year, ISG is maintaining its forecast of 2.1 percent revenue growth for managed services, as this market \u201cremains resilient, even as it becomes more competitive and selective,\u201d Hall said. At the same time, ISG is raising its previous growth forecast for cloud-based XaaS by 500 basis points, to 30 percent, reflecting continuing strong demand for AI infrastructure and software services.<\/p>\n

\nHall commented: \u201cThe market is being reallocated. Providers that understand where value is moving\u2014and adapt their business models accordingly\u2014will be the ones that lead the next phase of the AI economy.\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 95 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 2Q26 Global ISG Index results were presented during a webcast today. 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\/20260709909858\/en\/<\/a><\/span><\/p>\n

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

Erik Arvidson, Matter Communications for ISG
\n
+1 978 518 4542
\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

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Global Tech Services Market Grows at Fastest Pace Ever in Q2, Propelled by Soaring AI Demand: ISG Index\u2122 Combined market ACV up 43%, to record $42.4 billion Market driven by cloud XaaS, up 65%, with managed services up 2.7% ISG raises 2026 XaaS growth forecast to 30%, maintains managed services forecast at 2.1% STAMFORD, Conn.–(BUSINESS WIRE)– The global market for technology services grew at its fastest pace ever in the second quarter, propelled by soaring enterprise demand for cloud services to support accelerating AI ambitions, 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. Data from the global ISG Index\u2122, which measures commercial outsourcing contracts with annual … <\/p>\n

Continue reading “Global Tech Services Market Grows at Fastest Pace Ever in Q2, Propelled by Soaring AI Demand: 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-980273","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\nGlobal Tech Services Market Grows at Fastest Pace Ever in Q2, Propelled by Soaring AI Demand: 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\/global-tech-services-market-grows-at-fastest-pace-ever-in-q2-propelled-by-soaring-ai-demand-isg-index\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Global Tech Services Market Grows at Fastest Pace Ever in Q2, Propelled by Soaring AI Demand: ISG Index\u2122 - Market Newsdesk\" \/>\n<meta property=\"og:description\" content=\"Global Tech Services Market Grows at Fastest Pace Ever in Q2, Propelled by Soaring AI Demand: ISG Index\u2122 Combined market ACV up 43%, to record $42.4 billion Market driven by cloud XaaS, up 65%, with managed services up 2.7% ISG raises 2026 XaaS growth forecast to 30%, maintains managed services forecast at 2.1% STAMFORD, Conn.–(BUSINESS WIRE)– The global market for technology services grew at its fastest pace ever in the second quarter, propelled by soaring enterprise demand for cloud services to support accelerating AI ambitions, 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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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\/global-tech-services-market-grows-at-fastest-pace-ever-in-q2-propelled-by-soaring-ai-demand-isg-index\/","og_locale":"en_US","og_type":"article","og_title":"Global Tech Services Market Grows at Fastest Pace Ever in Q2, Propelled by Soaring AI Demand: ISG Index\u2122 - Market Newsdesk","og_description":"Global Tech Services Market Grows at Fastest Pace Ever in Q2, Propelled by Soaring AI Demand: ISG Index\u2122 Combined market ACV up 43%, to record $42.4 billion Market driven by cloud XaaS, up 65%, with managed services up 2.7% ISG raises 2026 XaaS growth forecast to 30%, maintains managed services forecast at 2.1% STAMFORD, Conn.–(BUSINESS WIRE)– The global market for technology services grew at its fastest pace ever in the second quarter, propelled by soaring enterprise demand for cloud services to support accelerating AI ambitions, 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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