ISG reports across-the-board growth, as
enterprises accelerate digital transformation
Demand for IT and business services in the Americas continued to
climb in the third quarter, reaching record highs and eclipsing
previous records from the second quarter as enterprises accelerate
their post-pandemic digital transformations, according to the
latest state-of-the-industry report from Information Services Group
(ISG) (Nasdaq: III), a leading global technology research and
advisory firm.
The Americas ISG Index™, which measures commercial outsourcing
contracts with annual contract value (ACV) of $5 million or more,
shows the region reached a record $11.6 billion of combined market
(both as-a-service and managed services) ACV in the second quarter,
up 37 percent. It marked the first time the region has surpassed
$10 billion of combined ACV in a quarter, exceeding the previous
record of $9.7 billion, set in the second quarter this year, by 19
percent.
Cloud-based as-a-service ACV soared 51 percent over the prior
year, to a record $6.9 billion, the fastest growth rate for this
segment since ISG began tracking it in 2014.
Infrastructure-as-a-service (IaaS) surged 53 percent, to a record
$4.6 billion, and software-as-a-service (SaaS) shot up 48 percent,
to a record $2.4 billion.
Traditional managed services advanced 21 percent, to a record
$4.7 billion. IT outsourcing (ITO) jumped 26 percent, to a record
$3.4 billion, while business process outsourcing (BPO) rose 9
percent, to $1.3 billion. A new high of 282 managed services
contracts were awarded this quarter, including five megadeals
totaling $1.4 billion, the highest such ACV in the past 14
years.
“U.S.-based enterprises across all industries continue to invest
in improving customer experiences, reducing overall costs, and
optimizing their IT environments,” said Todd Lavieri, vice chairman
and president, ISG Americas and Asia Pacific. “ACV has steadily
increased every quarter since a slump at the end of 2020, with
rising demand for cloud computing, applications and other digital
technologies driving the market coming out of the pandemic. We
foresee continued growth in 2022.”
Year-to-Date Performance Over the first nine months of
2021, records were set across the board. The combined market
reached a record $30.3 billion of ACV, up 20 percent, including
record ACV for as-a-service ($18.2 billion, up 26 percent) and
managed services ($12.1 billion, up 13 percent).
Within as-a-service, IaaS reached a record $12.0 billion, up 26
percent, and SaaS hit a record $6.2 billion, up 25 percent. On the
managed services side, ITO was a record $8.6 billion, up 8 percent,
including 28 percent growth in application development and
maintenance (ADM) services even as infrastructure services
declined. BPO reached a record $3.5 billion, up 27 percent, led by
growth in engineering/R&D and contact center services.
Notable Deals In the IaaS segment, significant deals in
the third quarter included CIBC’s multiyear agreement with
Microsoft to use Azure as its primary cloud platform. Oracle Cloud
Infrastructure also won a large deal with Telefonica Brasil to move
its development and testing data center workload to OCI. And AWS
inked a sizable deal with Sun Life, which will use AWS’s portfolio
of cloud technologies.
In the SaaS space, Google expanded its use of Workday
applications, and Adobe signed Experience Cloud deals with Capital
One, CVS, Ford, Fidelity and The Gap. Oracle, meanwhile, signed a
large deal with Humana for Oracle Fusion Cloud ERP and EPM.
2021 Global Forecast ISG is forecasting the market for
cloud-based services (IaaS and SaaS) will grow 25 percent globally
in 2021, up from its 21 percent growth forecast last quarter. The
firm also is raising its forecast for managed services growth to
10.1 percent, up from its prior forecast of 9 percent.
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 76 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. In 2016, the ISG
Index was expanded to include coverage of the fast-growing
as-a-service market, measuring the significant impact cloud-based
services are having on digital business transformation. ISG also
provides ongoing analysis of automation and other digital
technologies in its quarterly ISG Index presentations.
For more information about the ISG Index, visit this
webpage.
About ISG ISG (Information Services Group) (Nasdaq: III)
is a leading global technology research and advisory firm. A
trusted business partner to more than 700 clients, including more
than 75 of the world’s top 100 enterprises, ISG is committed to
helping corporations, public sector organizations, and service and
technology providers achieve operational excellence and faster
growth. The firm specializes in digital transformation services,
including automation, cloud and data analytics; sourcing advisory;
managed governance and risk services; network carrier services;
strategy and operations design; change management; market
intelligence and technology research and analysis. Founded in 2006,
and based in Stamford, Conn., ISG employs more than 1,300
digital-ready professionals operating in more than 20 countries—a
global team known for its innovative thinking, market influence,
deep industry and technology expertise, and world-class research
and analytical capabilities based on the industry’s most
comprehensive marketplace data. For more information, visit
www.isg-one.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20211116005884/en/
Will Thoretz, ISG +1 203 517 3119 will.thoretz@isg-one.com
Erik Arvidson, Matter Communications for ISG +1 617 755 2985
isg@matternow.com
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