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For more than 30 years, Cabling Installation & Maintenance has provided useful, practical information to professionals responsible for the specification, design, installation and management of structured cabling systems serving enterprise, data center and other environments. These professionals are challenged to stay informed of constantly evolving standards, system-design and installation approaches, product and system capabilities, technologies, as well as applications that rely on high-performance structured cabling systems. Our editors synthesize these complex issues into multiple information products. This portfolio of information products provides concrete detail that improves the efficiency of day-to-day operations, and equips cabling professionals with the perspective that enables strategic planning for networks’ optimum long-term performance.

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Demand for IT, Business Services in the Americas Remains Strong, But Shows Signs of Slowing, ISG Index™ Finds

By: via Business Wire

Combined market climbs 21% in Q2, but is down 2% sequentially from Q1

ISG lowers 2022 global growth forecast amid rising economic concerns

Demand for IT and business services in the Americas continues to be strong, but growth appears to be slowing amid rising economic concerns, the latest state-of-the-industry report from Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, finds.

The Americas ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, shows second-quarter ACV for the combined market—including both as-a-service (XaaS) and managed services—reached $12.2 billion, up 21 percent from a year ago, but down 2 percent sequentially from the first quarter.

“The Americas surpassed $12 billion in ACV for the first time ever in the first quarter, and the market remained above that lofty level in Q2,” said Todd Lavieri, vice chairman and president of ISG Americas and Asia Pacific. “Demand remains strong, as companies continue to invest in multiple IT products and services to drive digital transformation and customer engagement.”

Lavieri said the use of technology to optimize costs and improve operating efficiency will also continue to be a focus. “Amid concerns over a potential recession, companies are looking for cost savings in many areas, from IT and business processes to software, cloud and network spending, as they prepare for the possibility of a softer second half.”

The Americas market continues to be driven by strong demand for cloud-based XaaS solutions. ACV in this segment climbed 36 percent to reach $8.1 billion in the second quarter, topping $8 billion for the first time ever. Compared with the first quarter, however, ACV was up only 2 percent, the slowest quarterly growth rate since the pandemic-impacted third quarter of 2020.

Within the XaaS segment, infrastructure-as-a-service (IaaS) rose 44 percent, to $5.6 billion, but was up only 2 percent sequentially. Software-as-a-service (SaaS) was up 21 percent, to $2.5 billion, but rose only 1 percent against the prior quarter.

The managed services market, meanwhile, was flat with the prior year, at $4.1 billion, and down 9 percent from a robust first quarter. It was the segment’s lowest growth rate since the fourth quarter of 2020, after which it averaged 25 percent quarterly growth through the first quarter of 2022. Nonetheless, it was the fifth straight quarter that managed services exceeded $4 billion of ACV.

Within this segment, IT outsourcing (ITO) slumped 11 percent, to $2.5 billion, and was down 3 percent against the first quarter. Business process outsourcing (BPO), however, rose 25 percent year over year, to $1.6 billion, but was down 17 percent against an above-average first quarter.

A total of 281 managed services contracts were awarded in the second quarter, up 1 percent from the prior year, but down 11 percent from the first quarter. The agreements signed during the quarter including three mega-deals (contracts with ACV of $100 million or more). New scope awards were up 12 percent over last year, while contract restructurings were down 22 percent.

First-Half Results

Benefiting from a strong first quarter, the Americas combined market generated $24.7 billion of ACV in the first half, up 29 percent over the like period last year—the region’s best first-half growth since 2018. Managed services ACV rose 11 percent, to $8.6 billion, on 596 awards, the most ever in a first half. XaaS soared 42 percent, to $16.1 billion, the largest first-half growth rate ever recorded.

2022 Global Forecast

With the potential for continued economic uncertainty, ISG lowered its 2022 global growth forecast for cloud-based XaaS (IaaS and SaaS) to 18 percent, from 22 percent a quarter ago, and reduced its global growth forecast for managed services to 3.5 percent, from 5.1 percent in the first quarter.

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 79 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 800 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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