SYDNEY–(BUSINESS WIRE)–The Asia-Pacific IT and business services market has seen the fastest growth on record, reaching an all-time high in 2021, even as demand for cloud-based infrastructure services has slowed sequentially in the fourth quarter, according to the Information Services Group’s latest state of the art report (ISG) (Nasdaq: III), a leading global technology research and consulting company.
The Asia Pacific ISG Index™, which measures commercial outsourcing contracts with an annual contract value (ACV) of US$5 million or more, provides full-year ACV for the combined market, including including services as a service (XaaS) and managed services. hit a record US$16.1 billion, up 44%, the region’s best annual growth rate since ISG began tracking the combined market in 2014.
For the full year, XaaS spending grew 47% to a record $13.2 billion, including 47.5% growth for infrastructure as a service (IaaS), to $11.7 billion, and 40% growth for software as a service. service (SaaS), at 1.5 billion US dollars, two new records.
Managed services grew 32% to $2.9 billion, with IT outsourcing (ITO) growing 26% to $2.3 billion, and business process outsourcing (BPO) climbing by 57.5%, to US$628 million. The region saw a record 213 service contracts managed in 2021, including 24 worth more than $30 million, the highest record since 2014.
All major markets in the region saw managed services gains in 2021, including Japan (up 49%), Australia and New Zealand (up 38%) and China (up 30%).
Fourth quarter results
Fourth-quarter combined market ACV of $4.4 billion was 31% higher than the Covid-hit prior-year period, but was only up 1% sequentially from the third quarter of 2021, impacted by a slowdown in spending in the IaaS segment.
The XaaS market grew 28% overall to $3.4 billion, but fell 7% sequentially, with IaaS down 8% quarter-over-quarter and SaaS down 8%. 2% compared to the previous period. Year over year, IaaS grew 25% to $3.0 billion, and SaaS jumped 51% to $393 million.
Managed services, meanwhile, was up 43% year-over-year to US$931 million, and 50% from the third quarter. ITO soared 55% year-over-year to $741 million, a 70% increase from Q3 2021. BPO increased 10% to $190 million dollars, but only 2% more than in the previous quarter. 61 managed services contracts were awarded in the fourth quarter, up 15% from the prior year.
“2021 has been a banner year for Asia Pacific as businesses in the region have continued to embrace cloud computing as the backbone of digital transformation,” said Scott Bertsch, Partner and Regional Head, ISG Asia Pacific. “We also saw increased demand for traditional managed services, with a record level of contracts and particularly strong growth in application development and maintenance and networking services on the IoT side and facilities management services. and engineering/R&D on the BPO side.”
Commenting on the region’s slowdown in the fourth quarter, Bertsch said, “The market slowdown on a sequential basis was mostly limited to China and the IaaS segment. Excluding China, IaaS grew 68% year over year and 18% quarter over quarter. »
Global Forecast 2022
ISG predicts that the global cloud-based XaaS (IaaS and SaaS) market will grow by 20%, in the lower end of the 20% to 25% range in recent years, and that the global managed services market will grow by 5 .1% in 2022, well ahead of the average annual growth of 2% from 2010 to 2020.
About the ISG™ Index
The ISG Index™ is recognized as the authoritative source for market intelligence on the global technology and business services industry. For 77 consecutive quarters, it has detailed the latest industry data and trends for financial analysts, corporate buyers, software and service providers, law firms, universities and the media. In 2016, the ISG Index was expanded to include coverage of the fast-growing market as a service, measuring the significant impact of cloud-based services on business digital transformation. ISG also provides ongoing analysis of automation and other digital technologies in its quarterly ISG Index presentations.
For more information on the ISG index, visit this Web page.
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and consulting company. A trusted business partner to more than 700 customers, including more than 75 of the world’s 100 largest enterprises, ISG is committed to helping enterprises, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The company specializes in digital transformation services, including automation, cloud, and data analytics; procurement advice; governance and risk management managed services; network operator services; design of strategy and operations; change management; market intelligence and technology research and analysis. Founded in 2006 and headquartered in Stamford, Connecticut, ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries – a global team known for its innovative thinking, market influence, deep expertise in industry and technology and its world-class expertise. research and analysis capabilities based on the most comprehensive market data in the industry. For more information, visit www.isg-one.com.