Hello. This is Stanton Jones and Steve Hall with a special preview edition of the ISG Index Call next week on Thursday, January 16 at 9:00 AM ET. Make sure to reserve your spot here.
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2025 Will See Stronger Growth, but Caution Remains
As we discussed before the holidays, enterprise IT organizations have some big plans for 2025, which will have big implications on the IT and business services industry in 2025.
Given this context, here’s a quick preview of our 2025 forecast:
BFSI spending will see an improving growth trajectory, and deals will continue to focus on cost optimization, vendor consolidation and AI. The slowdown in manufacturing will continue, specifically in the automotive sector, and the European geopolitical situation will impact technology spending for many enterprises in the EU.
Given the likely focus on profits over aggressive growth in 2025, enterprises will stay focused on cost optimization. That means organizations will continue to reallocate savings from IT optimization to data modernization and engineering programs that support aggressive AI plans.
Providers will ramp up their use of generative AI in both project work and managed services awards, which will drive massive productivity improvements, especially in areas like application migration and modernization. This will create opportunity for challengers to disrupt incumbents but also drive down contract values for commodity work.
The U.S. Fed's rate cuts will slightly improve enterprise sentiment, but the cautious spending environment will persist through early 2025. Given these factors, we’re forecasting 5.5% - 6% growth for the IT and business services sector in 2025.
Steve, Kathy, Namratha, Alex and I look forward to seeing you on the call next week. Make sure to reserve your spot here.
About the authors
Stanton Jones
Stanton leads ISG's Index research, helping providers, investors and ISG clients make sense of the global IT services sector. Stanton’s weekly newsletter, the Index Insider, is read by thousands of market stakeholders each week. An ISG Digital Fellow, Stanton has been quoted in Fast Company, Forbes and CIO.com, and has appeared on national cable news.
Steve Hall
Steve is President, ISG EMEA, providing strategic insight and advice to help ISG clients in the region solve their most critical business challenges and adopt and optimize the technology and operating models they need to compete successfully.
Steve was named Chief AI Officer in 2024. He leads the firm’s work to help clients create an AI strategy, establish a business case for investment and select the right business partners. His industry-leading expertise in navigating the complexities of adopting technology at scale is helping clients drive value into every aspect of their operations.
Steve joined ISG in 2005 and has led ISG Digital Advisory Services, Emerging Technology Services, Global Product Engineering and Application Development & Maintenance. He is trained as a software engineer and holds a bachelor’s degree in computer science from Regis University.
