The region of Western Europe continues to see strong growth despite economic and geopolitical uncertainties, with several billion-dollar deals in Total Contract Value (TCV) involving AI-powered services and process improvements. The Liberty Global and Infosys agreement worth GBP 1.5 billion is just one example of the mega deals signed in the region, according to IDC.
Many of these large deals were signed in the Nordics, including contracts between Danske Bank and Infosys, as well as LahiTapiola Mutual Insurance and CG, which have further fueled growth in the region.
The latest IDC report on managed services highlights the increasing trend of AI-driven deals, with the average size of AI-related deals more than doubling in 2023 compared to 2022. Major service providers are upskilling their workforce to meet the demand for Generative AI applications, particularly in manufacturing and financial services.
Looking ahead to 2024, IDC predicts that managed services deal sizes will continue to grow, with an increase in large contracts and higher average deal sizes. The first quarter of 2024 has already seen several mega deals with TCV exceeding $500 million, with a significant portion coming from AI-related and cloud-related deals.
Grand View Research is also optimistic about the growth of Managed Service Provider (MSP) revenue in 2024, forecasting a compound annual growth rate of 13.6% from 2023 to 2030. The global managed services market size was estimated at USD 299.01 billion in 2023, with expectations for continued growth in the coming years.