Security News > 2021 > July > Europe’s IT and business services market propelled by growing cloud-based services adoption

Growing adoption of cloud-based services is propelling the expansion of the European IT and business services market, with the region setting a new record for as-a-service spending in the second quarter, according to the latest state-of-the-industry report from ISG. The EMEA ISG Index, which measures commercial outsourcing contracts with annual contract value of $5 million or more, shows ACV for the combined market, which includes both as-a-service and managed services, reached $6.3 billion, up 31 percent against a soft quarter last year during the onset of the pandemic, and up 4 percent against the first quarter of 2021.

"Europe has traditionally lagged behind other regions in its adoption of cloud-based services but now growth is accelerating," said Steven Hall, president of ISG EMEA. "COVID-related digital transformation has advanced cloud adoption by three to five years, and as-a-service ACV will soon surpass 50 percent of the market. We are near a tipping point."

On the managed services side, ITO was at a record $5.8 billion, up 18 percent, on a record 353 transactions, with strength in ADM and infrastructure.

Among geographic markets for managed services in the second quarter, France grew the most, up 44 percent from the prior year, to $295.5 million of ACV. The UK and Ireland, the region's largest managed services market in Q2, at $1.2 billion, was up 33 percent over the prior year.

The DACH market generated $806 million of managed services ACV in Q2, up 17 percent over the prior year, and the Nordics generated $405 million of ACV, up 15 percent.

The market for cloud-based services is forecast to grow 21 percent globally in 2021, up from its 18 percent growth forecast last quarter.

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