Strong Cloud Demand Fuels Q1 Double-Digit Growth in Asia Pacific’s IT and Business Services Market, ISG Index™ Finds
Asia Pacific's IT and business services market demonstrated robust growth in Q1, with combined market ACV rising 10% year-over-year to US $5.3 billion. This marks the region's fifth consecutive quarter of growth, primarily driven by strong cloud services demand.
The as-a-service (XaaS) segment showed impressive performance, increasing 19% to US $4.5 billion. Within XaaS, IaaS grew 18% to US $3.95 billion, while SaaS surged 30% to US $556 million.
However, managed services experienced a significant decline, dropping 26% to US $778 million - its weakest performance since Q3 2023. The total number of managed services contracts decreased by 14% to 57, with smaller deals (US $5-9 million) declining 26%.
By industry, media/telecoms showed triple-digit growth, while manufacturing rose 7%. Geographically, Japan and India posted double-digit growth, while Australia-New Zealand declined 35%, and Southeast Asia and China both fell over 70%.
Il mercato dei servizi IT e business nella regione Asia Pacifico ha mostrato una crescita solida nel primo trimestre, con un aumento del valore contrattuale annuale (ACV) combinato del 10% rispetto all'anno precedente, raggiungendo 5,3 miliardi di dollari USA. Questo rappresenta il quinto trimestre consecutivo di crescita per la regione, trainata principalmente da una forte domanda di servizi cloud.
Il segmento as-a-service (XaaS) ha registrato una performance notevole, crescendo del 19% fino a 4,5 miliardi di dollari USA. Nel dettaglio, l'IaaS è aumentato del 18% a 3,95 miliardi di dollari USA, mentre il SaaS ha avuto una crescita del 30%, raggiungendo 556 milioni di dollari USA.
Tuttavia, i servizi gestiti hanno subito un calo significativo, diminuendo del 26% a 778 milioni di dollari USA, segnando la performance più debole dal terzo trimestre del 2023. Il numero totale di contratti di servizi gestiti è sceso del 14% a 57, con i contratti di dimensioni più piccole (da 5 a 9 milioni di dollari USA) in calo del 26%.
Per settore, media/telecomunicazioni ha mostrato una crescita a tre cifre, mentre il manifatturiero è aumentato del 7%. Dal punto di vista geografico, Giappone e India hanno registrato una crescita a doppia cifra, mentre Australia-Nuova Zelanda è calata del 35%, e sia il Sud-est asiatico che la Cina sono scesi oltre il 70%.
El mercado de servicios IT y empresariales en Asia Pacífico mostró un crecimiento sólido en el primer trimestre, con un aumento del valor contractual anual (ACV) combinado del 10% interanual, alcanzando los 5.3 mil millones de dólares estadounidenses. Esto marca el quinto trimestre consecutivo de crecimiento en la región, impulsado principalmente por una fuerte demanda de servicios en la nube.
El segmento as-a-service (XaaS) tuvo un desempeño impresionante, creciendo un 19% hasta los 4.5 mil millones de dólares. Dentro de XaaS, IaaS creció un 18% hasta 3.95 mil millones de dólares, mientras que SaaS aumentó un 30%, llegando a 556 millones de dólares.
Sin embargo, los servicios gestionados experimentaron una caída significativa, disminuyendo un 26% hasta 778 millones de dólares, siendo su peor desempeño desde el tercer trimestre de 2023. El número total de contratos de servicios gestionados bajó un 14% hasta 57, con una caída del 26% en contratos más pequeños (de 5 a 9 millones de dólares).
Por industria, medios/telecomunicaciones mostraron un crecimiento de tres dígitos, mientras que manufactura aumentó un 7%. Geográficamente, Japón e India registraron un crecimiento de dos dígitos, mientras que Australia-Nueva Zelanda cayó un 35%, y tanto el Sudeste Asiático como China bajaron más del 70%.
아시아 태평양 IT 및 비즈니스 서비스 시장은 1분기에 견고한 성장을 보였으며, 연간 계약 가치(ACV)가 전년 대비 10% 증가하여 53억 미국 달러에 달했습니다. 이는 강력한 클라우드 서비스 수요에 힘입어 지역에서 5분기 연속 성장한 것입니다.
as-a-service (XaaS) 부문은 인상적인 성과를 보이며 19% 증가하여 45억 미국 달러에 이르렀습니다. XaaS 내에서 IaaS는 18% 증가한 39억 5천만 달러, SaaS는 30% 급증하여 5억 5천 6백만 달러를 기록했습니다.
하지만 매니지드 서비스는 26% 급감하여 7억 7천 8백만 달러로 떨어져 2023년 3분기 이후 최저 실적을 기록했습니다. 매니지드 서비스 계약 총 건수는 14% 감소한 57건이며, 5~9백만 달러 규모의 소규모 계약은 26% 감소했습니다.
산업별로는 미디어/통신 부문이 세 자릿수 성장을 기록했고, 제조업은 7% 증가했습니다. 지역별로는 일본과 인도가 두 자릿수 성장을 보인 반면, 호주-뉴질랜드는 35% 감소했고, 동남아시아와 중국은 각각 70% 이상 하락했습니다.
Le marché des services IT et business de la région Asie-Pacifique a connu une croissance robuste au premier trimestre, avec une augmentation de 10 % en glissement annuel de la valeur contractuelle annuelle (ACV) combinée, atteignant 5,3 milliards de dollars US. Cela marque le cinquième trimestre consécutif de croissance dans la région, principalement soutenu par une forte demande de services cloud.
Le segment as-a-service (XaaS) a affiché une performance impressionnante, augmentant de 19 % pour atteindre 4,5 milliards de dollars US. Dans le détail, l'IaaS a progressé de 18 % à 3,95 milliards de dollars US, tandis que le SaaS a bondi de 30 % à 556 millions de dollars US.
Cependant, les services managés ont connu un recul significatif, chutant de 26 % à 778 millions de dollars US, enregistrant ainsi leur plus faible performance depuis le troisième trimestre 2023. Le nombre total de contrats de services managés a diminué de 14 % à 57, avec une baisse de 26 % des contrats de plus petite taille (5 à 9 millions de dollars US).
Par secteur, les médias/télécoms ont affiché une croissance à trois chiffres, tandis que la fabrication a progressé de 7 %. Géographiquement, le Japon et l’Inde ont enregistré une croissance à deux chiffres, tandis que l’Australie-Nouvelle-Zélande a reculé de 35 %, et que l’Asie du Sud-Est ainsi que la Chine ont toutes deux chuté de plus de 70 %.
Der IT- und Business-Services-Markt im asiatisch-pazifischen Raum verzeichnete im ersten Quartal ein robustes Wachstum, wobei der kombinierte Markt-ACV im Jahresvergleich um 10 % auf 5,3 Milliarden US-Dollar anstieg. Dies ist das fünfte Quartal in Folge mit Wachstum, hauptsächlich getrieben durch eine starke Nachfrage nach Cloud-Diensten.
Das Segment as-a-service (XaaS) zeigte eine beeindruckende Leistung und wuchs um 19 % auf 4,5 Milliarden US-Dollar. Innerhalb von XaaS stieg IaaS um 18 % auf 3,95 Milliarden US-Dollar, während SaaS um 30 % auf 556 Millionen US-Dollar zulegte.
Die Managed Services hingegen verzeichneten einen deutlichen Rückgang um 26 % auf 778 Millionen US-Dollar – die schwächste Performance seit dem dritten Quartal 2023. Die Gesamtzahl der Managed-Services-Verträge sank um 14 % auf 57, wobei kleinere Verträge (5–9 Millionen US-Dollar) um 26 % zurückgingen.
Nach Branchen verzeichneten Medien/Telekommunikation ein dreistelliges Wachstum, während die Fertigung um 7 % zunahm. Geografisch erzielten Japan und Indien zweistelliges Wachstum, während Australien-Neuseeland um 35 % zurückging und Südostasien sowie China jeweils über 70 % fielen.
- Combined market ACV grew 10% YoY to US $5.3 billion
- XaaS spending increased 19% to US $4.5 billion
- SaaS segment showed strong 30% growth to US $556 million
- IaaS segment grew 18% to US $3.95 billion
- Media/telecoms sector showed triple-digit growth
- Manufacturing sector grew by 7%
- Managed services ACV declined 26% to US $778 million
- Total managed services contracts dropped 14%
- Small deals (US $5-9 million) declined 26%
- Financial services vertical fell 28%
- Australia-New Zealand market declined 35%
- Southeast Asia and China markets declined over 70%
Insights
ISG's latest Asia Pacific index report reveals mixed market signals that warrant investor attention. The region's 10% overall growth masks a significant divergence between segments - cloud services (XaaS) surged 19% while managed services plummeted 26% to its weakest performance since Q3 2023.
This bifurcation reflects an accelerating shift toward cloud transformation and AI adoption, with IaaS growing 18% and SaaS jumping 30%. Meanwhile, the 26% decline in smaller deals ($5-9M range) signals potential pressure on discretionary spending—a concerning early indicator of market hesitation.
The geographic breakdown shows pronounced weakness in key markets, with Australia-New Zealand (the region's largest) down 35% and both Southeast Asia and China declining over 70%. Only Japan and India delivered positive growth.
Most revealing is ISG's downward revision of its 2025 managed services growth forecast from 4.5% to just 1.3% in its base case scenario, with a bearish alternative projecting a -2.4% contraction. This substantial adjustment reflects mounting concerns about trade policies, geopolitical tensions, and regulatory uncertainties.
For ISG as an advisory firm, this environment presents a double-edged sword: while market uncertainty typically drives demand for advisory services, prolonged decision delays and spending hesitation could impact contract values and conversion rates. The characterization of "delayed commitment" rather than "declining demand" suggests potential revenue timing issues rather than permanent demand destruction.
Combined market up
Managed services slumps
The Asia Pacific ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of US
Managed services ACV, meanwhile, slumped 26 percent, to US
A total of 57 managed services contracts were awarded in the first quarter, down 14 percent year on year. A major driver of the shortfall was a decline in the number of smaller deals, those between US
“The Asia Pacific market continued to be driven by strong demand for cloud-based services, as companies forged ahead with digital transformation and AI adoption,” said Michael Gale, partner and regional leader, ISG Asia Pacific. “The focus remains on cost resiliency, productivity and IT modernization.”
Gale said the market is likely headed into a period of increased volatility, driven by heightened economic uncertainty and the impact of
One potential sign of that impact, Gale said, is the sharp decline in the number of small deals during the first quarter. “That could be a signal that discretionary spending is under pressure,” he said.
Results by Industry, Geography
Most industries turned negative versus the prior year, with the exception of the media/telecoms sector, which advanced by triple digits, and the region’s second largest vertical, manufacturing, which advanced nearly 7 percent. On the other hand, financial services, the region’s largest vertical, fell by 28 percent year on year.
By geography, most markets were down versus the prior year.
2025 Global Forecast
Heightened uncertainty from trade policy, geopolitical tensions and evolving regulations are beginning to weigh on the industry’s second-quarter outlook, ISG said.
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, resulting in a longer pullback in discretionary demand and delays in award conversion. In this more bearish case, ISG forecasts 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 its January forecast.
“We remain cautious in our base case, but not pessimistic,” said Gale. “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.
The 1Q24 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/20250415818426/en/
Press:
Will Thoretz, ISG
+1 203 517 3119
will.thoretz@isg-one.com
Julianna Sheridan, Matter Communications for ISG
+1 978-518-4520
isg@matternow.com
Source: Information Services Group, Inc.
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