The Americas region saw unprecedented demand for IT and business services in Q2 2025, driven by AI adoption and cost optimization strategies, according to the latest ISG Index from Information Services Group (ISG). With a record-breaking $15.5 billion in annual contract value (ACV), the market reflects robust growth in cloud-based services and managed services, signaling a shift toward AI-driven transformation and operational efficiency.
The Americas ISG Index reports a combined market ACV of $15.5 billion in Q2 2025, a 26% increase from the previous year and a 6% sequential rise from Q1. “The market acceleration in the Americas continues,” said Todd Lavieri, ISG vice chairman and president of ISG Americas and Asia Pacific. “Enterprises appear to be shrugging off macro uncertainty as they continue to invest in cloud services to power their AI ambitions and turn to managed services to optimize their costs and reinvest the savings in new initiatives.” This growth marks the region’s strongest performance in three years.
Cloud-based as-a-service (XaaS) spending reached $9.6 billion, up 29% year-over-year, driven by enterprises investing in infrastructure to support AI initiatives. Within XaaS, infrastructure-as-a-service (IaaS) ACV climbed 39% to $7.2 billion, while software-as-a-service (SaaS) grew 7% to $2.5 billion. This reflects a strategic focus on scalable cloud solutions to meet the computational demands of AI-driven transformation.
Managed services ACV rose 20% to $5.9 billion, marking three consecutive quarters of growth, a trend last seen in 2022. A total of 392 contracts were awarded, up 10% from last year, including five mega-deals valued at $100 million or more, with their combined ACV soaring 81% year-over-year. IT outsourcing (ITO) within managed services grew 32% to $4.6 billion, led by application development and maintenance (ADM) services.
The energy sector led with a 78% increase in managed services ACV, followed by manufacturing (69%) and travel, transportation, and hospitality (68%). The banking, financial services, and insurance (BFSI) sector, the largest by ACV, grew 20%, while healthcare saw a 33% rise. These trends highlight industries leveraging managed services for cost optimization and cloud services for digital innovation.
The Americas’ robust Q2 performance underscores a strategic pivot toward AI and cost efficiency, with enterprises investing heavily in cloud and managed services. As companies continue to prioritize AI-driven growth, the ISG Index signals a strong outlook for the IT and business services market in 2025.
The ISG Index™ is recognized as the authoritative source for marketplace intelligence on the global technology and business services industry. For 91 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.
ISG is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.
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