Europe’s IT and Business Services Market Shows Mixed Results in Q1, ISG Index™ Finds
17.4.2023 11:00:00 EEST | Business Wire | Press release
First-quarter demand for IT and business services in Europe fell 5 percent from a record first quarter last year, continuing a string of four straight quarters of sequential declines, 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 (both managed services and cloud-based as-a-service) at US $7.4 billion in the first quarter, down 5 percent from the prior year, but essentially flat with the fourth quarter.
“The broader market in EMEA saw mixed results in the first quarter,” said Steve Hall, president, EMEA, for ISG. “The managed services market had a relatively stable performance in Q1, with ACV up sequentially on strong restructuring activity and a record number of contracts awarded. Cloud services ACV, though, was down only for the second time year on year, registering its largest quarterly decline ever at minus 6 percent.”
Managed services ACV, at US $3.7 billion, was up 4 percent sequentially from the fourth quarter, but down 4 percent from the prior year. Organizations in the region inked a record 292 contracts during the quarter, up 14 percent against the previous quarter and up 5 percent versus the prior year.
Within managed services, IT outsourcing (ITO) rose 5 percent year on year, to US $3.0 billion, with strength in application development and maintenance services, up 38 percent, to US $1.9 billion, bolstering the market. Business process outsourcing (BPO), meanwhile, slumped 30 percent year on year, to US $750 million. The BPO segments that grew for the quarter were engineering services, finance and accounting services and facilities management services.
Demand for cloud-based services (XaaS) declined 6 percent versus the prior year, to US $3.7 billion, with infrastructure-as-a-service (IaaS) off 10 percent, at US $2.7 billion, even as software-as-a-service (SaaS) rose 6 percent, to US $1.1 billion.
Geographic Performance
The U.K. remains the largest geographic market in EMEA, with managed services ACV of US $1.2 billion in the first quarter, down 2 percent year on year but up 36 percent from the fourth quarter.
The DACH (Germany, Austria and Switzerland) market got off to sluggish start in 2023, with ACV of US $730 million down 21 percent versus the prior year and off 20 percent versus the fourth quarter. This was due primarily to an absence of large deals in the market, even though overall deal flow was up 38 percent year on year.
Southern Europe, Middle East and Africa (SEMEA), led by France, continued its strong performance in the first quarter. The SEMEA market saw more than 90 managed services deals, valued at more than US $1.2 billion of ACV, awarded in the quarter. France alone generated US $635 million of managed services ACV in the quarter, up 27 percent year on year.
2023 Global Forecast
ISG lowered its forecast for global XaaS growth in 2023 to 15 percent, down 200 basis points from its January forecast, and maintained its global growth forecast for managed services at 5 percent.
“The macro environment remains uncertain, with interest rates, inflation and trouble in the banking sector topping concerns for enterprise clients,” said Hall. “There continues to be more scrutiny on deal signings, especially in discretionary spending areas. Enterprises are revisiting cost optimization, efficiency gains and vendor consolidation deals.”
Hall said attrition has stabilized and ISG expects hiring to improve in the back half of the year. The decline in XaaS bookings is expected to last through the second quarter, with demand picking up again in the second half, he said.
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 82 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. 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 900 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 1,600 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230417005177/en/
Contact information
Will Thoretz, ISG
+1 203 517 3119
will.thoretz@isg-one.com
Kate Hartley, Carrot Communications for ISG
+44 7714065233
kate.hartley@carrotcomms.co.uk
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
Nanochon Receives Regulatory Approval from Panamá’s Ministry of Health to Initiate First-in-Human Clinical Study of Chondrograft™17.8.2026 22:44:00 EEST | Press release
Nanochon, a medical device company developing Chondrograft™, a novel patented implant for the treatment of articular cartilage defects of the knee, today announced that it has received regulatory approval from Panamá’s Ministry of Health to initiate its First-in-Human (FIH) clinical study in Panamá. The study will evaluate the safety and performance of Chondrograft™ in patients with focal chondral defects of the knee and represents a major milestone in the company’s clinical and regulatory development strategy. The trial will be conducted at The Panama Clinic in Panamá City under the leadership of Drs. Juan Osorio and Emilio Tufiño, experienced sports medicine surgeons, with Dr. Osorio serving as Principal Investigator for the study. Dr. Osorio stated, “I am pleased to be the Principal Investigator for this important study, and we look forward to contributing the data that will support a larger clinical study and subsequent market entry.” Nanochon selected Panamá for its growing reputa
TOURISE and Oxford Economics Release New Global Report on Tourism Resilience in an Era of Permanent Disruption17.8.2026 17:33:00 EEST | Press release
TOURISE, in collaboration with Oxford Economics, today released a new report, “Resilience in a World that Doesn’t Reset: Redesigning Tourism for an Era of Permanent Disruption.” The analysis of 85 major crises over two decades shows a clear pattern: in a world defined by continuous shocks, destinations that act before disruption hits recover up to 1.5 times faster than those that wait. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260817880835/en/ “In a world that does not reset between crises, disruption is a constant feature of the global tourism landscape,” said His Excellency Ahmed Al-Khateeb, Minister of Tourism of Saudi Arabia and Chairman of TOURISE. “The real test for destinations measures how they prepare for volatility, protect traveler confidence, and maintain continuity ahead of such events.” Using the current Middle East crisis as a lens, where Gulf hubs carry roughly 14 percent of global transit traffic, the r
The Expensify Visa® Commercial Card Brings New Proactive Spend Controls to 14 Countries17.8.2026 16:00:00 EEST | Press release
Expensify, Inc. (Nasdaq: EXFY), the easiest way to manage expenses, travel, and corporate cards, today expanded the reach of Expensify Card spend rules, the market-leading way for businesses to control corporate card spend before it happens. Available to businesses in 14 countries, spend rules let admins decide exactly how, where, and when each Expensify Card can be used, so only compliant transactions go through. Unlike traditional corporate cards that rely on after-the-fact expense review, the Expensify Card enforces policy at the point of purchase. Admins set the rules once, and the card handles the rest. With Expensify Card spend rules, admins can: Lock a card to a subscription. Give each recurring SaaS tool its own virtual card, so a vendor can only ever charge what it should. If the card owner changes teams or leaves, the subscription keeps running, with no swapping cards and no missed payments. Cover a one-time purchase. Issue a virtual card for a single transaction like event r
Riskified Analysis Finds Travel Fraudsters Are Adapting Faster Than Traditional Signals Can Keep Up, With May Flight Risk Up 32%17.8.2026 15:30:00 EEST | Press release
Riskified (NYSE: RSKD), a global leader in ecommerce fraud and risk intelligence, today released new findings from its Travel Industry Insights report, revealing how sophisticated fraud rings and AI-enabled fraudsters are evolving their tactics across airlines, hotels, and online travel platforms. Riskified’s analysis shows that fraudsters are increasingly adapting their behavior to resemble legitimate travelers, making traditional fraud indicators less reliable and creating new challenges for travel merchants. Riskified’s analysis of hundreds of millions of travel transactions across flights, hotels, and land transportation found that flight fraud risk increased through the first five months of 2026, with May 2026 marking the sharpest year-over-year increase at 32% compared to May 2025. The findings show that sophisticated fraud activity is not limited to predictable travel peaks, with organized fraud rings continuously adjusting their methods throughout the year. Riskified's travel n
PIF Delivers Strong Revenue and Profit Growth in 202517.8.2026 14:54:00 EEST | Press release
PIF today published its 2025 Annual Report demonstrating strong financial performance and continued progress against its long-term objectives. As a long-term investor with a unique mandate to drive the economic transformation of Saudi Arabia and deliver sustainable financial returns, PIF maintained a diversified portfolio in 2025, balancing returns with national impact and long-term resilience. Maintaining Financial Discipline In 2025, revenue rose 9% year on year to $120 billion, while net profit more than doubled to $17 billion, supported by stronger contributions from maturing portfolio companies. PIF retained over $900 billion in assets under management and achieved an annualized total shareholder return of 5.8% since 2017. Total shareholder return in 2025 was positively driven by increased dividends from portfolio companies and returns from financial investments. It was also impacted by downward movements in the valuations of some assets, as a result of wider market conditions, an
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
