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. The growth was driven by the banking, financial services, and insurance (BFSI) sector, which is the region’s largest business sector.
According to a report from Information Services Group (ISG), the combined market for managed services and cloud-based services reached US $7.5 billion in ACV. Managed services saw a 3% increase in ACV, with strong performance in business process outsourcing (BPO) which soared 40%.
The UK remained the largest market, generating US $1.2 billion in managed services ACV, while DACH and France saw declines. The Nordics emerged as Europe’s third-largest market with a 45% increase in ACV.
Looking ahead, ISG forecasts a 3% growth for managed services and a 15% revenue growth for XaaS in 2024. The global economy is expected to slow down, but outsourcing could see a boost as companies seek to balance cost management and service quality.
For more information about the ISG Index™ and ISG, visit their website.