Hello. This is Stanton Jones and Sunder Sarangan with what’s important in the IT and business services industry this week.
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Trailing twelve-month contract value for managed services in the Americas is up 5% over the past three years. However, growth (or lack thereof) has varied significantly by industry.
This week, we’re taking a look at managed services industry results over the past 36 months, specifically within the nine industry verticals we track. You’ll see in this week’s Data Watch that we included not only the annual contract value (ACV) trend line but award counts as well. By including award counts, we can get a better understanding of the underlying health and growth of the sector.
Here are four industry patterns you should know:
Travel, CPG and retail have all seen more awards with a higher average award value over the past three years. TTH has shown the strongest sustained growth, CPG has been strong of late, while retail has been choppy. Many consumer firms are under intense cost pressure and are increasingly using IT services to optimize costs.
Manufacturing and media & telecom have seen award activity increase since 2023, however, ACV per award has declined. This is an indication that managed services deals are getting smaller in these industries, with some of this decline likely due to AI-driven productivity gains.
In financial services, award activity and ACV rebounded in early 2025. During that period, ACV was trending higher, but the rebound has lost steam in the last few quarters. Banks are increasingly focusing on “building before outsourcing” due to the strategic nature of AI, which may be impacting award activity and deal size.
And, finally, in healthcare and pharmaceuticals, ACV has recovered from its low in late 2024, but the data indicates a consistent pattern of smaller deals over the past three years. ACV in this sector is on an upswing, as companies in this industry face rapidly increasing costs combined with a fast-changing regulatory environment.
As we discussed on the 3Q26 Index call a couple of weeks ago, the Americas and EMEA regions are headed in different directions in terms of overall performance. And, of course, individual industry performance has a big impact on why that’s happening. So next week, we’ll dive into what’s happening in EMEA.