Hello. This is Stanton Jones with the key takeaways from the ISG Global Index Call Q3 2024. You can watch a replay of the call here.
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3Q24 Key Takeaways
Data Watch
What You Need to Know
- Managed services remained resilient despite weakness in BFSI. It was the best quarter ever for managed services, with nine mega deals (ACV > $100M) in the quarter. The BFSI sector remained under pressure, but signals point to a stronger outlook for 2025.
- The Infrastructure-as-a-Service recovery is fully underway. IaaS had its best Y/Y result since 2022, as enterprises move beyond consolidation of IaaS spending and into a new phase focused on cloud AI spending.
- SaaS recovery continues to be slow as enterprises move to consumption-based models. Software-as-a-Service growth was positive Y/Y, but demand is likely to accelerate as enterprises start consuming new generative AI features.
- AI project growth remains strong, but pilots have yet to meaningfully scale. Service provider AI revenues are up 42% on a trailing 12-month basis; only 15% of generative AI use cases are fully in production.
- 2024 forecast remains unchanged; 2025 outlook is more upbeat. We’re holding our managed services forecast at 2%, and our as-a-Service forecast at 14%. Signals are pointing toward a stronger 2025. The timing and size of future rate cuts will influence that significantly.
About the author
Stanton Jones
Stanton leads ISG's Index research, helping providers, investors and ISG clients make sense of the global IT services sector. Stanton’s weekly newsletter, the Index Insider, is read by thousands of market stakeholders each week. An ISG Digital Fellow, Stanton has been quoted in Fast Company, Forbes and CIO.com, and has appeared on national cable news.
