The global market for managed IT and business services is on the rise, with a 7% increase in combined market ACV to $24.8 billion, marking the best quarter in two years. The growth is being primarily driven by cloud XaaS, which saw an 11% increase, while managed services only saw a slight uptick.
Despite the overall positive trend, ISG predicts a slow growth environment to continue, leading to a lower 2024 forecast for managed services growth at 2% and XaaS growth at 14%. The industry remains cautious due to ongoing pressure on discretionary spending.
The second-quarter results show promising numbers in the XaaS segment, with infrastructure-as-a-service (IaaS) ACV reaching its highest level since 2022. The managed services segment also saw growth, with IT outsourcing (ITO) and data center services showing positive trends.
Looking ahead, ISG anticipates challenges in the IT and business services market, with uncertainties impacting discretionary spending. The firm remains committed to helping clients achieve operational excellence and faster growth through digital transformation services.
For more information on the latest industry trends and data, visit the ISG website.