Europe’s IT and Business Services Sector on the Rise in Q1
The European market for IT and business services saw a 2.5% increase in the first quarter, breaking a streak of four consecutive quarters of decline compared to the previous year. The banking, financial services, and insurance (BFSI) sector played a key role in driving this growth, according to a report from Information Services Group (ISG).
The EMEA ISG Index™ reported that the combined market, including managed services and cloud-based offerings, reached $7.5 billion in ACV in the first quarter. Managed services saw a 3% increase in ACV, with notable growth in BFSI. Business process outsourcing also experienced a significant surge, particularly in industry-specific services.
The as-a-service segment showed a 2% year-on-year increase, reaching $3.6 billion in ACV. Infrastructure-as-a-service (IaaS) saw a 7% growth, while software-as-a-service (SaaS) declined by 8%.
Geographically, the UK remained the largest market, generating $1.2 billion in managed services ACV. DACH and France experienced declines, while the Nordics emerged as Europe’s third-largest market with a 45% year-on-year increase.
Looking ahead, ISG forecasts a 3% growth for managed services and a 15% revenue growth for XaaS in 2024. The organization anticipates outsourcing to play a significant role as companies seek cost management and service quality balance. GenAI is expected to drive growth, with opportunities for service providers in the data layer.
The ISG Index™ is a trusted source for industry intelligence, providing insights for financial analysts, enterprise buyers, and service providers. For more information about the ISG Index, visit their website.