Global Technology Services Market Hits Record Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy III?
Source: Newsfilter
- Record Market Value: The global technology services market achieved a first-quarter annual contract value (ACV) of $39.4 billion, marking a 29% year-over-year increase, the highest growth rate in four years, indicating sustained demand for cloud and managed services that drives market expansion.
- AI-Driven Growth: ISG has raised its 2026 XaaS growth forecast to 25%, reflecting a surge in enterprise investment in AI infrastructure, which is expected to propel sustained growth in the coming years, particularly in the Infrastructure as a Service (IaaS) sector.
- New AI Index Launch: The newly launched ISG AI Index reveals a significant impact of AI on technology services, with the overall index up 77% since the end of 2022, and IaaS soaring by 160%, indicating that AI is reshaping market dynamics and accelerating digital transformation for enterprises.
- Managed Services Recovery: After two quarters of decline, managed services rebounded with an ACV of $11.2 billion, up 3% year-over-year, while IT outsourcing (ITO) saw a slight dip; however, business process outsourcing (BPO) achieved a robust 62% growth, highlighting strong demand for industry-specific services.
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Analyst Views on III
Wall Street analysts forecast III stock price to rise
1 Analyst Rating
1 Buy
0 Hold
0 Sell
Moderate Buy
Current: 4.100
Low
6.50
Averages
6.50
High
6.50
Current: 4.100
Low
6.50
Averages
6.50
High
6.50
About III
Information Services Group, Inc. is a global artificial intelligence (AI)-centered technology research and advisory firm. The Company specializes in digital transformation services, including sourcing advisory, cloud and data analytics; managed governance and risk services, network carrier services, technology strategy and operations design; change management, and market intelligence and technology research and analysis. The Company’s ISG Network and Software Advisory services and its software platforms, including ISG GovernX and ISG Tango. ISG GovernX includes real-time third-party risk management capabilities, including integrated data feeds and real-time alerts. ISG Tango sourcing platform is an AI-embedded, comprehensive solution that enables enterprises and public sector organizations to evaluate their business requirements and identify desired outcomes. Its AI Maturity Index, a data-driven assessment platform designed to benchmark workforce readiness for AI at scale.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Information Services Group Q1 Earnings Preview
- Earnings Announcement Date: Information Services Group (III) is set to announce its Q1 2023 earnings on April 16 before market open, with consensus EPS estimate at $0.07 (flat Y/Y) and revenue estimate at $60.8 million (+2% Y/Y).
- Historical Performance Review: Over the past two years, III has beaten EPS and revenue estimates 75% of the time, indicating a strong track record of financial performance and market confidence.
- Forecast Revision Dynamics: In the last three months, EPS estimates saw no upward revisions and one downward revision, while revenue estimates experienced one upward and two downward revisions, reflecting a cautious market outlook on the company's future performance.
- AI Business Growth Potential: The company aims for 50% of its revenue to come from AI-related business through a dedicated acceleration unit and ongoing business expansion, highlighting its strategic positioning in the rapidly growing AI market.
See More
ISG AI Index Launches, Infrastructure Up 160%
- Significant Infrastructure Growth: Since its launch in December 2022, the ISG AI Index indicates that Infrastructure as a Service (IaaS) has surged by 160%, demonstrating that AI technology is rapidly reshaping this sector and prompting companies to invest heavily in data center capacity to meet rising demand.
- Strong Software Performance: Software as a Service (SaaS) has seen a 53% increase during the same period, reflecting strong market demand for AI-driven solutions, while managed services have only grown by 0.3%, indicating that this area is still in the build-out phase with significant future potential.
- Robust Composite Index Performance: The ISG AI Index has risen by 77% since inception, reflecting the profound impact of AI on the global technology and business services industry, particularly in infrastructure where capital expenditures have increased by 265%, showcasing corporate confidence in future growth.
- Positive Future Outlook: ISG plans to include additional metrics in the next edition of the AI Index, such as AI sentiment, demand signals, and enterprise readiness, further revealing the impact of AI across various market segments and helping businesses better seize market opportunities.
See More
Global Technology Services Market Hits Record Growth
- Record Market Value: The global technology services market achieved a first-quarter annual contract value (ACV) of $39.4 billion, marking a 29% year-over-year increase, the highest growth rate in four years, indicating sustained demand for cloud and managed services that drives market expansion.
- AI-Driven Growth: ISG has raised its 2026 XaaS growth forecast to 25%, reflecting a surge in enterprise investment in AI infrastructure, which is expected to propel sustained growth in the coming years, particularly in the Infrastructure as a Service (IaaS) sector.
- New AI Index Launch: The newly launched ISG AI Index reveals a significant impact of AI on technology services, with the overall index up 77% since the end of 2022, and IaaS soaring by 160%, indicating that AI is reshaping market dynamics and accelerating digital transformation for enterprises.
- Managed Services Recovery: After two quarters of decline, managed services rebounded with an ACV of $11.2 billion, up 3% year-over-year, while IT outsourcing (ITO) saw a slight dip; however, business process outsourcing (BPO) achieved a robust 62% growth, highlighting strong demand for industry-specific services.
See More
European Enterprises Accelerate Digital Engineering Transformation
- Digital Engineering Trends: According to ISG's 2026 report, European enterprises are rapidly adopting AI-native and software-defined approaches to enhance innovation speed and ensure compliance, thereby gaining a competitive edge.
- Modular Architecture Transformation: Organizations are transitioning legacy environments into modular and interoperable architectures, reducing system complexity and accelerating release cycles through cloud data fabrics and API-driven frameworks, which enhances market responsiveness.
- Intelligent Operations Enhancement: By embedding AI and digital twin technologies, enterprises are shortening development cycles and improving product quality, utilizing simulation-led validation and early-stage testing to reduce reliance on physical prototypes, thus enhancing auditability and market adaptability.
- Customer Experience Optimization: HCLTech is recognized as the global ISG CX Star Performer for 2026, achieving the highest scores in customer satisfaction surveys, showcasing its leadership and customer-centric strategies in the digital engineering services sector.
See More
Enterprises Lead Long-Term Mainframe Modernization Strategies
- Strategic Shift in Modernization: The 2026 ISG Provider Lens global Mainframes Solutions report indicates that enterprises are transitioning from one-time transformation efforts to multi-year modernization programs that prioritize continuity and controlled change to address increasing operational complexity.
- Automation Tool Utilization: To tackle talent shortages, enterprises are employing automated tools for knowledge extraction and dependency mapping, which help uncover previously undocumented application logic and data relationships, thereby enhancing planning accuracy and reducing risks associated with large-scale changes.
- Governance and Compliance Focus: Governance and compliance have become central to modernization initiatives, with organizations implementing solutions featuring built-in validation, testing, and rollback capabilities to ensure traceability and mitigate operational risks, particularly in regulated industries.
- Leaders and Rising Stars: The report identifies 24 providers in the mainframe application modernization software space, naming Amdocs, AWS, and Google as leaders, while CloudFrame is recognized as a Rising Star, showcasing its promising portfolio and high future potential.
See More
Firms Enhance AI-Driven Engineering to Boost Productivity
- Digital Engineering Transformation: According to ISG's report, U.S. enterprises are enhancing their digital engineering capabilities by embedding AI across business functions, making operations more predictable and driving enterprise-wide transformation.
- Investment Growth: With large service providers generating over $2 billion in annual revenue, companies are increasing investments in AI platforms and services to achieve measurable business outcomes, indicating a growing confidence and capital commitment to AI technologies.
- Process Optimization: Enterprises are standardizing AI-augmented development processes to automate repetitive tasks such as testing, documentation, and basic code refactoring, thereby reducing manual effort and shortening project timelines, which enhances overall efficiency.
- Sustainability Focus: The report also explores the rise of intent-driven engineering models and an increasing focus on sustainability in technology operations, demonstrating that companies are considering environmental impacts while pursuing efficiency.
See More
Information Services Group Q1 Earnings Preview
- Earnings Announcement Date: Information Services Group (III) is set to announce its Q1 2023 earnings on April 16 before market open, with consensus EPS estimate at $0.07 (flat Y/Y) and revenue estimate at $60.8 million (+2% Y/Y).
- Historical Performance Review: Over the past two years, III has beaten EPS and revenue estimates 75% of the time, indicating a strong track record of financial performance and market confidence.
- Forecast Revision Dynamics: In the last three months, EPS estimates saw no upward revisions and one downward revision, while revenue estimates experienced one upward and two downward revisions, reflecting a cautious market outlook on the company's future performance.
- AI Business Growth Potential: The company aims for 50% of its revenue to come from AI-related business through a dedicated acceleration unit and ongoing business expansion, highlighting its strategic positioning in the rapidly growing AI market.
See More
ISG AI Index Launches, Infrastructure Up 160%
- Significant Infrastructure Growth: Since its launch in December 2022, the ISG AI Index indicates that Infrastructure as a Service (IaaS) has surged by 160%, demonstrating that AI technology is rapidly reshaping this sector and prompting companies to invest heavily in data center capacity to meet rising demand.
- Strong Software Performance: Software as a Service (SaaS) has seen a 53% increase during the same period, reflecting strong market demand for AI-driven solutions, while managed services have only grown by 0.3%, indicating that this area is still in the build-out phase with significant future potential.
- Robust Composite Index Performance: The ISG AI Index has risen by 77% since inception, reflecting the profound impact of AI on the global technology and business services industry, particularly in infrastructure where capital expenditures have increased by 265%, showcasing corporate confidence in future growth.
- Positive Future Outlook: ISG plans to include additional metrics in the next edition of the AI Index, such as AI sentiment, demand signals, and enterprise readiness, further revealing the impact of AI across various market segments and helping businesses better seize market opportunities.
See More
Global Technology Services Market Hits Record Growth
- Record Market Value: The global technology services market achieved a first-quarter annual contract value (ACV) of $39.4 billion, marking a 29% year-over-year increase, the highest growth rate in four years, indicating sustained demand for cloud and managed services that drives market expansion.
- AI-Driven Growth: ISG has raised its 2026 XaaS growth forecast to 25%, reflecting a surge in enterprise investment in AI infrastructure, which is expected to propel sustained growth in the coming years, particularly in the Infrastructure as a Service (IaaS) sector.
- New AI Index Launch: The newly launched ISG AI Index reveals a significant impact of AI on technology services, with the overall index up 77% since the end of 2022, and IaaS soaring by 160%, indicating that AI is reshaping market dynamics and accelerating digital transformation for enterprises.
- Managed Services Recovery: After two quarters of decline, managed services rebounded with an ACV of $11.2 billion, up 3% year-over-year, while IT outsourcing (ITO) saw a slight dip; however, business process outsourcing (BPO) achieved a robust 62% growth, highlighting strong demand for industry-specific services.
See More
European Enterprises Accelerate Digital Engineering Transformation
- Digital Engineering Trends: According to ISG's 2026 report, European enterprises are rapidly adopting AI-native and software-defined approaches to enhance innovation speed and ensure compliance, thereby gaining a competitive edge.
- Modular Architecture Transformation: Organizations are transitioning legacy environments into modular and interoperable architectures, reducing system complexity and accelerating release cycles through cloud data fabrics and API-driven frameworks, which enhances market responsiveness.
- Intelligent Operations Enhancement: By embedding AI and digital twin technologies, enterprises are shortening development cycles and improving product quality, utilizing simulation-led validation and early-stage testing to reduce reliance on physical prototypes, thus enhancing auditability and market adaptability.
- Customer Experience Optimization: HCLTech is recognized as the global ISG CX Star Performer for 2026, achieving the highest scores in customer satisfaction surveys, showcasing its leadership and customer-centric strategies in the digital engineering services sector.
See More
Enterprises Lead Long-Term Mainframe Modernization Strategies
- Strategic Shift in Modernization: The 2026 ISG Provider Lens global Mainframes Solutions report indicates that enterprises are transitioning from one-time transformation efforts to multi-year modernization programs that prioritize continuity and controlled change to address increasing operational complexity.
- Automation Tool Utilization: To tackle talent shortages, enterprises are employing automated tools for knowledge extraction and dependency mapping, which help uncover previously undocumented application logic and data relationships, thereby enhancing planning accuracy and reducing risks associated with large-scale changes.
- Governance and Compliance Focus: Governance and compliance have become central to modernization initiatives, with organizations implementing solutions featuring built-in validation, testing, and rollback capabilities to ensure traceability and mitigate operational risks, particularly in regulated industries.
- Leaders and Rising Stars: The report identifies 24 providers in the mainframe application modernization software space, naming Amdocs, AWS, and Google as leaders, while CloudFrame is recognized as a Rising Star, showcasing its promising portfolio and high future potential.
See More
Firms Enhance AI-Driven Engineering to Boost Productivity
- Digital Engineering Transformation: According to ISG's report, U.S. enterprises are enhancing their digital engineering capabilities by embedding AI across business functions, making operations more predictable and driving enterprise-wide transformation.
- Investment Growth: With large service providers generating over $2 billion in annual revenue, companies are increasing investments in AI platforms and services to achieve measurable business outcomes, indicating a growing confidence and capital commitment to AI technologies.
- Process Optimization: Enterprises are standardizing AI-augmented development processes to automate repetitive tasks such as testing, documentation, and basic code refactoring, thereby reducing manual effort and shortening project timelines, which enhances overall efficiency.
- Sustainability Focus: The report also explores the rise of intent-driven engineering models and an increasing focus on sustainability in technology operations, demonstrating that companies are considering environmental impacts while pursuing efficiency.
See More
