Information Services Group (III) Status update summary

Market performance

• Q3 combined-market ACV reached a record $52.5B, up 63% YoY; nine-month ACV rose 45% to $134.1B.

• Q3 XaaS ACV rose 95% to $41.2B, or 78.5% of combined-market ACV; nine-month XaaS increased 68% to $100.6B.

As-a-service markets

• Q3 IaaS ACV rose 115% to $35.5B; nine-month IaaS grew 85% to $85B, while the four largest hyperscalers grew 98%.

• SaaS ACV rose 21% to $5.6B in Q3, its strongest growth in more than four years; nine-month growth was 12% to $15.7B.

• AI is increasingly delivered through established software platforms; the top 10 SaaS vendors grew 6% YTD versus 13% at the same point last year.

Managed services and other service lines

• Managed-services ACV rose 2.1% to a record $11.3B in Q3 and 2.7% YTD to $33.5B; Q3 awards fell 8% to 722, with eight mega-deals and mega-deal ACV down 6%.

• ITO was nearly flat in Q3, up 0.3% to $8.4B, but fell 3.5% YTD to $23.9B; ADM declined 8% in Q3, with 15% fewer ITO awards than in 2025.

• BPO rose 12.3% in Q3 to $2.1B, its fourth consecutive quarter of double-digit growth; YTD growth was 34.6% to $6.9B, its fastest since 2021.

• ER&D ACV fell 3% in Q3 to $814M and 0.7% YTD to $2.6B; engineering ACV and contract activity were flat YTD, with EMEA up 21% and Americas down 17%.

• Buyers are shifting from labor-arbitrage deals to AI-enabled process transformation; 56% of BPO study respondents had significant AI-focused automation in contracts.