Cloud-Based Services Propel European IT, Business Services Market in Q2, ISG Index™ Finds
Growing adoption of cloud-based services is propelling the expansion of the European IT and business services market, with the region setting a new record for as-a-service spending in the second quarter, 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 EMEA ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of US $5 million or more, shows ACV for the combined market, which includes both as-a-service and managed services, reached US $6.3 billion, up 31 percent against a soft quarter last year during the onset of the pandemic, and up 4 percent against the first quarter of 2021. It was the third consecutive quarter that combined market ACV exceeded the US $6 billion mark, with this quarter nearly matching the record established in fourth quarter last year.
Cloud-based as-a-service spending soared 41 percent over last year, and 15 percent from Q1, to a record US $2.9 billion, and now represents 46 percent of the combined market, a record high.
“Europe has traditionally lagged behind other regions in its adoption of cloud-based services but now growth is accelerating,” said Steven Hall, president of ISG EMEA. “COVID-related digital transformation has advanced cloud adoption by three to five years, and as-a-service ACV will soon surpass 50 percent of the market. We are near a tipping point.”
Within the as-a-service segment, infrastructure as-a-service (IaaS) climbed 47 percent (18 percent quarter over quarter), to a record US $2.2 billion, while software-as-a-service (SaaS) rose 27 percent (5 percent quarter over quarter), to a record US $722 million.
Managed services, at US $3.4 billion, was down 4 percent quarter over quarter, its second straight quarterly decline, although it was up 23 percent over a soft Q2 a year ago. Deal activity for the quarter was at a record 217 contracts, amid a flurry of mid-range deals between US $20 million and US $40 million. IT outsourcing (ITO) generated US $2.8 billion of ACV, up 18 percent, and business process outsourcing (BPO) produced US $611 million of ACV, up 54 percent.
For the first half of 2021, the combined market generated a record US $12.3 billion of ACV, up 25 percent. As-a-service, at a record US $5.4 billion, was up 27 percent, and managed services, at a record US $6.9 billion, was up 23 percent. Within as-a-service, IaaS reached a record US $4.0 billion, up 33 percent, and SaaS hit a record US $1.4 billion, up 13 percent. On the managed services side, ITO was at a record US $5.8 billion, up 18 percent, on a record 353 transactions, with strength in ADM and infrastructure. BPO reached US $1.1 billion, up 60 percent, spurred by demand for finance and accounting and engineering services.
Among the significant ITO awards in the second quarter, HCL won a contract with a multinational oil and gas company for end-user computing services. TietoEVRY also won a three-year, €200 million contract with DNB Bank in Norway.
In BPO, notable deals this quarter included Cognizant’s agreement with a U.K.-based automotive, distribution and retail firm to transform its finance and accounting infrastructure, and Capita’s three-year customer management deal with Tesco Mobile. ISS Group signed a two-year contract extension with Rolls Royce.
In IaaS, GCP signed a large deal with LVMH this quarter to develop new cloud-based AI and machine learning solutions. And AWS inked a contract with Ferrari to become its official cloud, machine learning and AI provider.
In SaaS, Microsoft landed Dynamics 365 contracts with ABN AMRO Bank and BMW, and signed Power BI agreements with Daimler, AB InBev, Dentsu and Swiss Re. Sanofi signed with Microsoft to use Teams.
Among geographic markets for managed services in the second quarter, France grew the most, up 44 percent from the prior year, to US $295.5 million of ACV. The UK and Ireland, the region’s largest managed services market in Q2, at US $1.2 billion, was up 33 percent over the prior year.
The DACH market, meanwhile, generated US $806 million of managed services ACV in Q2, up 17 percent over the prior year, and the Nordics generated US $405 million of ACV, up 15 percent.
Only Benelux and Southern Europe saw pullbacks in managed services ACV versus last year.
2021 Global Forecast
ISG is forecasting the market for cloud-based services (IaaS and SaaS) will grow 21 percent globally in 2021, up from its 18 percent growth forecast last quarter. The firm also is raising its forecast for managed services growth to 9 percent, up from its prior forecast of 5 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 75 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.
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.
To view this piece of content from cts.businesswire.com, please give your consent at the top of this page.
Will Thoretz, ISG
+1 203 517 3119
Kate Hartley, Carrot Communications for ISG
About Business Wire
For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.
Subscribe to releases from Business Wire
Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from Business Wire
Andersen Global Expands into Puerto Rico with San Juan-Based Law Firm3.8.2021 16:30:00 EEST | Press release
Andersen Global extends its reach into the Puerto Rican market with San Juan-based law firm Casillas, Santiago & Torres, LLC (CST Law). Founded in 2011, CST Law is a full-service firm focusing on business and commercial law with capabilities in corporate, tax, commercial and employment law litigation, real estate, immigration, labor and employment law, employee benefits and government affairs. The firm covers a variety of industries such as retail, wholesale, real estate, manufacturing, tourism, financial services, technology, telecommunications and construction, providing legal services to a range of clients including major multinational companies. “Our firm has built long-lasting relationships with our clients through our commitment to transparency and quality of work we provide,” said Managing Partner Luis L. Torres. “As our clients’ operations continue to expand into multiple jurisdictions, their need for integrated and seamless services also increases. Our collaboration with Ander
IDEMIA Top Leader in NIST Flight Boarding Simulation Showcasing High Accuracy of Algorithms3.8.2021 16:30:00 EEST | Press release
IDEMIA, the global leader in augmented identity, announced today that the company ranked second for passenger identification in the latest testing by the National Institute of Standards (NIST), confirming that IDEMIA’s facial recognition technology and algorithms are among the most accurate, fair and consistent in market. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210803005333/en/ Credits : IDEMIA The test focuses on ‘Identification for Paperless Travel and Immigration’ and is part of the ongoing Facial Recognition Vendor Test (FRVT) managed by NIST. The exercise simulated departing flights, populating galleries with photos of 420 arriving travelers at the airport, then measuring accuracy by running searches of photos at departure. IDEMIA’s technology conducted 536 simulated aircraft boardings, without experiencing a single false negative, which translates to a secure and frictionless boarding experience for passengers.
New Enhancements to OPEX® Sure Sort® Robotic Sorting System Expand Capabilities and Increase Productivity for Warehouse Automation Customers3.8.2021 16:10:00 EEST | Press release
OPEX® Corporation, a leading provider of innovative warehouse automation solutions worldwide, has made enhancements to one of its most popular products to better meet warehouse customers’ needs. First introduced in 2017, the Sure Sort® small-item robotic sorting system has revolutionized order fulfillment in e-commerce distribution centers worldwide due to its compact array of sort locations that can be scaled, sized, and customized in the small footprint of a single-pass put wall. Sure Sort quickly and accurately processes up to 2,400 items per hour with limited labor. Sure Sort easily directs a wide range of items, including cylindrical, clear, plastic bagged and blister pack items less than five pounds each. It can handle items as small as two inches in length and width and can support products as large as 15 inches long, 12 inches wide, and 6 inches high thanks to the new modifications OPEX just made. “Sure Sort previously only handled items four inches high,” said Monty McVaugh, M
New Members Have Joined HD-PLC Alliance to Accelerate the HD-PLC Advancement Towards a Global Power Line Communication Standard3.8.2021 16:00:00 EEST | Press release
HD-PLC Alliance (*1), Fukuoka, Japan (Alliance) announced that 4 newcomers has joined the alliance this year. The member list on Alliance website was updated as follows; MicroChip Technology as Supporter since July, is a leading provider of smart, connected and secure embedded control solutions. Its easy-to-use development tools and comprehensive product portfolio enable customers to create optimal designs which reduce risk while lowering total system cost and time to market. The company’s solutions serve more than 120,000 customers across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. Microchip is headquartered in Chandler, Arizona. LVX Global, as Supporter since May, is an international technology solutions business that identifies, designs, delivers and manages high value, scalable, replicable social outcomes at the intersection of technology, engineering, and human behavioural science. Helvetia, as Standard since May, is a Japanes
SoftServe Opens New Office in Dubai3.8.2021 14:05:00 EEST | Press release
SoftServe, a leading global digital authority and consulting company, has opened a new office in Dubai as part of its initiative to support the rapidly expanding user base in the Middle East. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210803005011/en/ (Graphic: Business Wire) SoftServe has been supporting customers in the region since 2018, delivering solutions for large conglomerate customers in the retail, finance, and energy sectors. As a developing and dynamic hub for investment with a growing population and considerable opportunity for activity in the non-oil sectors, the Middle East plays a crucial role in SoftServe’s growth strategy. The new office is located at Building No. 16, Dubai Internet City, Dubai, United Arab Emirates. “We are excited to bring our expertise to meet the growing demand for software development and digital transformation in this region,” says Volodymyr Semenyshyn, Executive Vice President EM
DigitalEd Announces Growth Investment From PSG3.8.2021 14:00:00 EEST | Press release
Today, DigitalEd announces a growth investment from PSG; a leading growth equity firm partnering with middle-market software and technology-enabled services companies. DigitalEd provides a SaaS-based digital learning platform called Möbius, focusing on science, technology, engineering and mathematics (STEM) education. PSG is DigitalEd’s sole outside investor. Financial terms were not disclosed. DigitalEd was founded in 2018 with a simple and resonant mission - to shape the world through digital learning. DigitalEd provides individual learning, in a shared world, allowing students to acquire knowledge at a guided, self-defined pace. DigitalEd currently supports over 300 educational institutions worldwide, administering over 20 million tests and assignments, supporting online learning for world-class universities, institutes of technology, and community colleges. Möbius is an innovative and comprehensive platform for STEM education. The platform is designed to reduce the time educators n
Quanergy Demonstrates the Industry First OPA-based Solid State LiDAR with 100 Meter Range3.8.2021 13:00:00 EEST | Press release
Quanergy Systems, Inc., a leading provider of OPA-based solid state LiDAR sensors and smart 3D solutions for automotive and IoT, today announced the successful driving demonstration of its S3 Series LiDAR, a true solid state LiDAR sensor using an industry-first Optical Phased Array (OPA) technology and a scalable CMOS silicon manufacturing process for cost-effective, mass-market production. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210803005475/en/ Quanergy Demonstrates the Industry First OPA-based Solid State LiDAR with 100 Meter Range (Photo: Business Wire) The demonstration was conducted in partnership with Zero Electric Vehicle Inc. (ZEV), an innovative sustainable energy company that provides fleet electrification and EV platforms for companies looking to maximize their existing assets while transitioning to electric transportation. For this test, a solid-state LiDAR test platform with single scanning beam was moun
In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.Visit our pressroom