{"id":980846,"date":"2026-07-13T04:03:01","date_gmt":"2026-07-13T08:03:01","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/europes-demand-for-tech-services-accelerates-in-q2-as-spending-on-ai-and-managed-services-rises-isg-index\/"},"modified":"2026-07-13T04:03:01","modified_gmt":"2026-07-13T08:03:01","slug":"europes-demand-for-tech-services-accelerates-in-q2-as-spending-on-ai-and-managed-services-rises-isg-index","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/europes-demand-for-tech-services-accelerates-in-q2-as-spending-on-ai-and-managed-services-rises-isg-index\/","title":{"rendered":"Europe\u2019s Demand for Tech Services Accelerates in Q2, As Spending on AI and Managed Services Rises: ISG Index\u2122"},"content":{"rendered":"

<\/p>\n

Europe\u2019s Demand for Tech Services Accelerates in Q2, As Spending on AI and Managed Services Rises: ISG Index\u2122<\/b><\/p>\n

Combined market up 46%, led by 64% growth in cloud services<\/b><\/p>\n

Managed services up 21%, as companies seek cost savings to fund AI<\/b><\/p>\n

LONDON–(BUSINESS WIRE<\/a>)–
\nDemand for technology services in Europe continued to accelerate in the second quarter, as the region increasingly turns to managed services to reduce costs and cloud services to meet AI objectives, 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

\nThe EMEA ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows second-quarter ACV for the combined market (both managed services and cloud-based as-a-service) soared 46 percent\u2014its largest growth in eight years\u2014to US $13.0 billion. The latest quarter adds to a string of three straight quarters in which growth has averaged 33 percent.<\/p>\n

\n\u201cEurope has become the fastest-growing region for technology services, fueled not only by an increasing demand for AI, but for managed services, which acts as a cost-savings lever to help fund AI ambitions and continued digital transformation,\u201d said Anthony Drake, president, ISG EMEA. \u201cWe\u2019re seeing strong double-digit growth pretty much across the board.\u201d<\/p>\n

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

\nACV for the as-a-service (XaaS) segment surged 64 percent year on year, its fastest growth ever, to a record US $8.3 billion, as demand for hyperscaler services to support AI skyrocketed. It was the ninth straight quarter XaaS has grown by double digits, averaging 38.5 percent growth in that span.<\/p>\n

\nWithin this segment, infrastructure-as-a-service (IaaS) climbed 79 percent year on year, to a record US $6.8 billion. Software-as-a-service (SaaS) grew 19 percent versus the prior year, to US $1.5 billion.<\/p>\n

\nManaged services ACV in the second quarter advanced 21 percent, to US $4.7 billion. A total of 294 managed services contracts were awarded in the quarter, up 23 percent from the prior year. Among them were two mega deals (ACV of US $100 million or more), compared with three signed in the second quarter last year, as mega-deal ACV dropped 56 percent year on year. At the other end of the spectrum, the number of smaller awards (those in the US $5 million to US $9 million range) rose 11 percent from the prior year.<\/p>\n

\nManaged services growth in Q2 was driven by new scope activity, with the number of deals up 25 percent and the ACV of those deals up 32 percent, to US $3.3 billion, as enterprises continued to consolidate their provider ecosystems and turn to smaller, niche providers for specialized services.<\/p>\n

\nWithin managed services, IT outsourcing (ITO) rose 21 percent, to US $3.2 billion, led by growth in application development and maintenance (ADM) and infrastructure services. Business process outsourcing (BPO) grew 37 percent, to US $915 million, led by growth in industry-specific and facilities management services. Engineering, research and development (ER&D) services advanced 3 percent year on year, to US $519 million, and was up 30 percent from a slow first quarter.<\/p>\n

\nBy industry, managed services ACV was sharply higher (up 55 percent) in banking, financial services and insurance (BFSI), as well as in travel, transportation and leisure (up 51 percent), and energy (up 34 percent), which extended its growth trajectory to four straight quarters. For BFSI, it was the first time in nine quarters that the sector\u2019s spending trended higher. Manufacturing, meanwhile, was down 7 percent, its third straight quarter of negative results.<\/p>\n

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

\nEMEA\u2019s largest managed services market, the U.K., posted its best quarter in the last three years, with ACV of US $1.4 billion, up 84 percent year on year. The region\u2019s other traditional powerhouses, DACH and France, however, moved to the downside. DACH declined 5.5 percent, to US $917 million, while France slid 59 percent, to US $332 million. Eastern Europe and Southern Europe each advanced by triple-digits, while the Nordics was up 1.4 percent.<\/p>\n

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

\nFor the first half, combined market ACV rose 37 percent, to US $25.0 billion. Managed services, at US $9.3 billion, was up 13 percent, while XaaS, at US $15.7 billion, climbed 56.5 percent. A total of 578 managed services contracts were awarded in the half, up 12 percent from last year, including five mega-deals, one fewer than the prior year, as the ACV of those deals fell 29 percent.<\/p>\n

\nWithin managed services, ITO was essentially flat (down 0.2 percent), at US $6.2 billion, while BPO surged 86 percent, to US $2.3 billion. On the cloud side, the IaaS market rocketed by 74 percent, to US $12.8 billion, while the SaaS market rose a more modest 8 percent, to US $2.9 billion.<\/p>\n

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

\nFor the full year, ISG said it is maintaining its global forecast of 2.1 percent revenue growth for managed services. 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

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 on July 9. 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\/20260713687162\/en\/<\/a><\/span><\/p>\n

\nPhilipp 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 Data Analytics Software Artificial Intelligence Networks Internet Hardware<\/p>\n

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

Europe\u2019s Demand for Tech Services Accelerates in Q2, As Spending on AI and Managed Services Rises: ISG Index\u2122 Combined market up 46%, led by 64% growth in cloud services Managed services up 21%, as companies seek cost savings to fund AI LONDON–(BUSINESS WIRE)– Demand for technology services in Europe continued to accelerate in the second quarter, as the region increasingly turns to managed services to reduce costs and cloud services to meet AI objectives, 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 EMEA ISG Index\u2122, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows second-quarter ACV for the … <\/p>\n

Continue reading “Europe\u2019s Demand for Tech Services Accelerates in Q2, As Spending on AI and Managed Services Rises: 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-980846","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\nEurope\u2019s Demand for Tech Services Accelerates in Q2, As Spending on AI and Managed Services Rises: 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-demand-for-tech-services-accelerates-in-q2-as-spending-on-ai-and-managed-services-rises-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 Demand for Tech Services Accelerates in Q2, As Spending on AI and Managed Services Rises: ISG Index\u2122 - Market Newsdesk\" \/>\n<meta property=\"og:description\" content=\"Europe\u2019s Demand for Tech Services Accelerates in Q2, As Spending on AI and Managed Services Rises: ISG Index\u2122 Combined market up 46%, led by 64% growth in cloud services Managed services up 21%, as companies seek cost savings to fund AI LONDON–(BUSINESS WIRE)– Demand for technology services in Europe continued to accelerate in the second quarter, as the region increasingly turns to managed services to reduce costs and cloud services to meet AI objectives, 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\/europes-demand-for-tech-services-accelerates-in-q2-as-spending-on-ai-and-managed-services-rises-isg-index\/","og_locale":"en_US","og_type":"article","og_title":"Europe\u2019s Demand for Tech Services Accelerates in Q2, As Spending on AI and Managed Services Rises: ISG Index\u2122 - Market Newsdesk","og_description":"Europe\u2019s Demand for Tech Services Accelerates in Q2, As Spending on AI and Managed Services Rises: ISG Index\u2122 Combined market up 46%, led by 64% growth in cloud services Managed services up 21%, as companies seek cost savings to fund AI LONDON–(BUSINESS WIRE)– Demand for technology services in Europe continued to accelerate in the second quarter, as the region increasingly turns to managed services to reduce costs and cloud services to meet AI objectives, 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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