Asia Pacific’s IT and business services market experienced a strong resurgence in the first quarter of the year, marking a significant turnaround from the previous quarters, according to the latest report from Information Services Group (ISG).
The region’s combined market, including both managed services and as-a-service (XaaS), surpassed the US $5 billion mark, a level not seen since almost two years ago. This growth represents a 25 percent increase compared to the previous year and breaks a trend of five consecutive quarters of negative results.
Managed services saw a notable 18 percent increase in Annual Contract Value (ACV), reaching just over US $1 billion, with significant contributions from the Business Process Outsourcing (BPO) sector. On the other hand, IT Outsourcing (ITO) experienced a slight decline of 1 percent.
In terms of XaaS, the ACV spiked by 27 percent, totaling US $4 billion, driven by growth in Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS).
Industries such as banking, financial services, and insurance (BFSI) led the growth, generating an ACV of US $434 million, while other sectors showed mixed results. Geographically, markets like India, Japan, Southeast Asia, and China experienced double-digit growth, while Australia-New Zealand saw a 15 percent decline.
Looking ahead, ISG forecasts a 3 percent growth for managed services and a 15 percent revenue growth for XaaS in 2024. As companies strive to balance cost management and service quality, outsourcing is expected to play a crucial role, with GenAI poised to drive growth in the industry.
The ISG Index™ is a reliable source of marketplace intelligence for the global technology and business services industry, providing detailed data and trends for various stakeholders. The 1Q24 Global ISG Index results were recently presented during a webcast on April 11, showcasing the industry’s positive performance in the Asia Pacific region.
