Europe’s Demand for IT, Business Services Accelerated in Q1, Despite Economic Uncertainty: ISG Index™
ISG (Nasdaq: III) reports strong Q1 2024 performance in European IT and business services, with combined market ACV reaching a record $9.1 billion, up 23% year-over-year. The growth was driven by both managed services (up 13% to $4.4 billion) and XaaS (up 34% to $4.7 billion).
Key highlights include:
- 279 managed services contracts signed, including three mega deals
- ITO grew 26% to $3.5 billion
- BPO declined 40% to $530 million
- ER&D services increased 52% to $377 million
Geographically, France led with 86% growth, followed by DACH at 35.5%. However, ISG warns of potential market volatility due to U.S. tariffs and possible retaliatory measures, which could lead to longer decision cycles and reduced discretionary spending, particularly in manufacturing, retail, automotive, and financial services sectors.
ISG (Nasdaq: III) riporta una forte performance nel primo trimestre del 2024 nei servizi IT e aziendali in Europa, con un valore combinato del mercato ACV che ha raggiunto un record di 9,1 miliardi di dollari, in aumento del 23% rispetto all'anno precedente. La crescita è stata guidata sia dai servizi gestiti (in aumento del 13% a 4,4 miliardi di dollari) sia da XaaS (in aumento del 34% a 4,7 miliardi di dollari).
I principali punti salienti includono:
- 279 contratti di servizi gestiti firmati, compresi tre mega contratti
- ITO cresciuto del 26% a 3,5 miliardi di dollari
- BPO diminuito del 40% a 530 milioni di dollari
- I servizi ER&D aumentati del 52% a 377 milioni di dollari
Geograficamente, la Francia ha guidato con una crescita dell'86%, seguita dalla regione DACH con il 35,5%. Tuttavia, ISG avverte di una potenziale volatilità del mercato a causa dei dazi statunitensi e delle possibili misure di ritorsione, che potrebbero portare a cicli decisionali più lunghi e a una riduzione della spesa discrezionale, in particolare nei settori della produzione, del commercio al dettaglio, dell'automotive e dei servizi finanziari.
ISG (Nasdaq: III) informa sobre un sólido rendimiento en el primer trimestre de 2024 en los servicios de TI y empresariales en Europa, con un valor de contrato anual (ACV) combinado que alcanzó un récord de 9.1 mil millones de dólares, un aumento del 23% en comparación con el año anterior. El crecimiento fue impulsado tanto por los servicios gestionados (aumento del 13% a 4.4 mil millones de dólares) como por XaaS (aumento del 34% a 4.7 mil millones de dólares).
Los aspectos destacados incluyen:
- 279 contratos de servicios gestionados firmados, incluyendo tres contratos importantes
- ITO creció un 26% a 3.5 mil millones de dólares
- BPO disminuyó un 40% a 530 millones de dólares
- Los servicios de ER&D aumentaron un 52% a 377 millones de dólares
A nivel geográfico, Francia lideró con un crecimiento del 86%, seguida de DACH con un 35.5%. Sin embargo, ISG advierte sobre la posible volatilidad del mercado debido a los aranceles de EE. UU. y las posibles medidas de represalia, lo que podría llevar a ciclos de decisión más largos y a una reducción del gasto discrecional, especialmente en los sectores de fabricación, comercio minorista, automotriz y servicios financieros.
ISG (Nasdaq: III)는 유럽 IT 및 비즈니스 서비스에서 2024년 1분기 강력한 실적을 보고하며, 시장의 연간 계약 가치(ACV)가 91억 달러에 도달하여 전년 대비 23% 증가했다고 전했습니다. 성장은 관리 서비스(13% 증가, 44억 달러)와 XaaS(34% 증가, 47억 달러) 모두에 의해 주도되었습니다.
주요 하이라이트는 다음과 같습니다:
- 279개의 관리 서비스 계약 체결, 그 중 3개의 대형 계약 포함
- ITO는 26% 증가하여 35억 달러에 도달
- BPO는 40% 감소하여 5억 3천만 달러
- ER&D 서비스는 52% 증가하여 3억 7천7백만 달러
지리적으로 프랑스가 86% 성장률로 선두를 차지했으며, DACH가 35.5%로 뒤를 이었습니다. 그러나 ISG는 미국의 관세와 가능한 보복 조치로 인한 시장 변동성의 가능성을 경고하며, 이는 특히 제조업, 소매업, 자동차 및 금융 서비스 분야에서 의사 결정 주기를 길어지게 하고 재량 지출을 줄일 수 있다고 경고합니다.
ISG (Nasdaq: III) rapporte une solide performance au premier trimestre 2024 dans les services informatiques et commerciaux en Europe, avec une valeur totale des contrats (ACV) atteignant un record de 9,1 milliards de dollars, en hausse de 23 % par rapport à l'année précédente. La croissance a été propulsée à la fois par les services gérés (augmentation de 13 % à 4,4 milliards de dollars) et par XaaS (augmentation de 34 % à 4,7 milliards de dollars).
Les points clés incluent :
- 279 contrats de services gérés signés, dont trois contrats majeurs
- ITO a augmenté de 26 % pour atteindre 3,5 milliards de dollars
- BPO a diminué de 40 % pour atteindre 530 millions de dollars
- Les services ER&D ont augmenté de 52 % pour atteindre 377 millions de dollars
Géographiquement, la France a mené avec une croissance de 86 %, suivie par la région DACH avec 35,5 %. Cependant, ISG met en garde contre une potentielle volatilité du marché en raison des tarifs américains et des mesures de représailles possibles, ce qui pourrait entraîner des cycles décisionnels plus longs et une réduction des dépenses discrétionnaires, en particulier dans les secteurs de la fabrication, du commerce de détail, de l'automobile et des services financiers.
ISG (Nasdaq: III) berichtet über eine starke Leistung im ersten Quartal 2024 in den europäischen IT- und Geschäftsdienstleistungen, wobei der kombinierte Marktwert (ACV) einen Rekord von 9,1 Milliarden US-Dollar erreichte, was einem Anstieg von 23 % im Vergleich zum Vorjahr entspricht. Das Wachstum wurde sowohl durch Managed Services (Anstieg um 13 % auf 4,4 Milliarden US-Dollar) als auch durch XaaS (Anstieg um 34 % auf 4,7 Milliarden US-Dollar) vorangetrieben.
Wichtige Highlights sind:
- 279 unterzeichnete Verträge für Managed Services, darunter drei Großverträge
- ITO wuchs um 26 % auf 3,5 Milliarden US-Dollar
- BPO fiel um 40 % auf 530 Millionen US-Dollar
- ER&D-Dienstleistungen stiegen um 52 % auf 377 Millionen US-Dollar
Geografisch führte Frankreich mit einem Wachstum von 86 %, gefolgt von DACH mit 35,5 %. ISG warnt jedoch vor möglicher Marktvolatilität aufgrund von US-Zöllen und möglichen Vergeltungsmaßnahmen, die zu längeren Entscheidungszyklen und reduzierten Dispositionsausgaben führen könnten, insbesondere in den Sektoren Fertigung, Einzelhandel, Automobil und Finanzdienstleistungen.
- Record combined market ACV of $9.1B, up 23% YoY
- XaaS segment reached record $4.7B, up 34% YoY
- Managed services achieved second-best quarter at $4.4B, up 13%
- Strong growth in France (86%) and DACH region (35.5%)
- ER&D services hit record $377M, up 52% YoY
- BPO segment declined 40% to $530M
- UK market down 3.5% YoY
- Nordics region dropped 15%
- Market heading into period of increased volatility
- Potential slowdown in decision-making and discretionary spending due to tariff uncertainty
Insights
ISG's Q1 European IT services market report presents a mixed picture that impacts the firm's own outlook. The record $9.1 billion combined market ACV (up
However, ISG's forward-looking statements reveal significant concerns about market volatility due to trade tensions. Their revised 2025 forecast shows a dramatic reduction in expected managed services growth from
This downward revision matters for ISG specifically because the company's advisory services are tied to transaction activity in this market. Longer enterprise decision cycles and reduced discretionary spending would likely impact ISG's revenue pipeline, particularly in key verticals like manufacturing and financial services where they note potential pullbacks.
The commentary that this represents "delayed commitment" rather than "declining demand" suggests ISG sees this as a temporary disruption rather than a fundamental market shift, but the magnitude of forecast revision indicates material near-term business impact. The contrast between strong Q1 performance and cautious outlook points to increasing uncertainty in ISG's operating environment.
Combined market up
In the face of tariffs, market likely headed into period of increased volatility, ISG says
The EMEA ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of US
“European demand bounced back in the first quarter—the third consecutive quarter the region has generated double-digit ACV growth versus the prior year,” said Steve Hall, president of ISG’s EMEA region. “Europe continues to focus on digital transformation, embracing the cloud and AI to achieve cost efficiencies, faster speed to market and greater innovation.”
Despite the strong performance on Q1, Hall noted that the market is likely headed into a period of increased volatility. “The introduction of sweeping
Q1 Results by Segment
Managed services ACV in the first quarter rose 13 percent, to US
Within managed services, IT outsourcing (ITO) was up 26 percent, to US
By industry, managed services ACV was sharply higher in the energy (up 64 percent) and travel, transport and leisure (up 63 percent) sectors, while manufacturing was up by double digits. On the downside, the financial services and media/telecom sectors pulled back by double digits.
ACV in the as-a-service (XaaS) segment climbed 34 percent year on year, and 3 percent from the prior quarter, to a record US
Geographic Performance
The region’s largest market, the
In terms of year-on-year growth,
2025 Global Forecast
Despite Europe’s strong first quarter, heightened uncertainty from trade policy, geopolitical tensions and evolving regulations are beginning to weigh on second-quarter forecasts, Hall said.
Hall noted that ISG’s forecasts for market growth in 2025 are based on two scenarios. In the first scenario, the tariff environment stabilizes by midyear, and the market sees faster decision-making in the second half. Under that scenario, ISG forecasts XaaS growth of 18 percent for 2025, unchanged from its January forecast. ISG’s forecast for managed services growth would be 1.3 percent, down from its January forecast of 4.5 percent.
In the second scenario, tariffs would extend through the third quarter or beyond, compounded by immigration enforcement, prevailing wage issues or retaliatory digital services taxes in the EU. “Under this scenario, we would anticipate a longer pullback in discretionary demand and longer delays in award conversion,” Hall said. “In this more bearish case, XaaS growth for the year would moderate to 15 percent, while managed services spending would be negative 2.4 percent, a nearly 700 basis-point swing from our January forecast.”
Said Hall: “We remain cautious in our base case, but not pessimistic. The signals from Q1 are fundamentally strong. The shift we’re seeing is not one of declining demand, but one of delayed commitment.”
About the ISG Index™
The ISG Index™ is recognized as the authoritative source for marketplace intelligence on the global technology and business services industry. For 90 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. For more information about the ISG Index, visit this webpage.
The 1Q25 Global ISG Index results were presented during a webcast on April 10. To view a replay of the webcast and download presentation slides, visit this webpage.
About ISG
ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250414603024/en/
Press Contacts:
Philipp Jaensch, ISG
+49 151 730 365 76
philipp.jaensch@isg-one.com
Will Thoretz, ISG
+1 203 517 3119
will.thoretz@isg-one.com
Source: Information Services Group, Inc.
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