It’s an understatement to say that a lot has changed over the past quarter: consumer confidence is down, business uncertainty is high, all while recent trade policy changes in the U.S. have made the effective tariff rate the highest it’s been in over 100 years.

How’s all this impacting the IT and business services industry?

• Tariffs have raised short-term uncertainty and the industry will likely see a pullback in discretionary IT spending
• The manufacturing and travel sectors are most exposed to this pullback, while the BFSI sector may see secondary effects
• Cost optimization, enabled by AI, will remain in strong demand 

Join us on April 10^th to discuss our forecast for the quarter and the impact tariff changes will have on your business. 

ABOUT THE ISG INDEX

The ISG Index is the authoritative source for marketplace intelligence on the global IT and Business Services Industry. Using our unprecedented data assets, as well as our practitioner-led view into the industry, the Index provides enterprise technology leaders, service providers, software vendors and investors with the most up-to-date view into key changes in demand, pricing, talent and provider landscapes. 

Join us on April 10, 2025

HOST: Rishi Jhunjhunwala
Head of Technology Research, IIFL Capital

Steven Hall
President, ISG EMEA & Chief AI Officer, ISG

Stanton Jones
Distinguished Analyst, ISG

Kathy Rudy
Chief Data and Analytics Officer, ISG

Namratha Dharshan
Chief Business Leader, ISG India Research

Alex Bakker
Distinguished Analyst, ISG

Market Level Set

1. Managed services had its best year ever, but growth slowed from 2023. 
2. Mega deal activity remains robust, while small deal activity has rebounded. 
3. BFSI spending in the US is recovering, while EMEA continues to lag. 
4. AI spending continues to be strong; funding coming from optimizations. 
5. Forecasting stronger growth in 2025, but recovery will be gradual. 

ISG (Nasdaq: III) 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 organization 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.