AI infrastructure lifts outsourcing deals to record $52.5Bn: ISG
- Combined global market ACV rose 63% to a record $52.5 billion in Q3 2026.
- Infrastructure-as-a-service spending jumped 115% to $35.5 billion.
- Managed services ACV rose 2.1% to a record $11.3 billion.
- BPO ACV grew 12% to $2.1 billion, a fourth straight double-digit quarter.
CONNECTICUT, UNITED STATES — The AI boom pushed the global market for large technology and business services contracts past $50 billion in a single quarter for the first time, but most of the new money went to cloud infrastructure rather than traditional outsourcing. Combined annual contract value (ACV) jumped 63% to $52.5 billion in the third quarter, the fastest growth ever recorded.
Infrastructure takes the lion’s share
Infrastructure-as-a-service (IaaS) did the heavy lifting, more than doubling to $35.5 billion, according to the latest ISG Index from Information Services Group. “The AI infrastructure boom is still accelerating,” said Steve Hall, chief AI officer at ISG and leader of the ISG Index.
Hall said providers keep building because enterprise demand for compute, storage and AI capacity remains exceptionally strong, and he sees no clear peak yet. With software-as-a-service also growing, cloud now accounts for 78.5% of the combined market, its highest share ever.
Outsourcing grows, but slowly
Traditional managed services told a quieter story, with ACV up just 2.1% to a record $11.3 billion even as the number of contracts fell 8% from last year.
“The combination of lower award volumes and record ACV suggests enterprises are becoming more selective, concentrating their spending on fewer, larger strategic commitments,” Hall said.
Business process outsourcing (BPO) was the bright spot, rising 12% to $2.1 billion for a fourth straight quarter of double-digit growth, led by industry-specific services, facilities management and bundled back-office deals.
IT outsourcing, by contrast, was flat at $8.4 billion, as application development work waits behind AI-driven process redesign.
“Right now, much of the incremental investment is flowing into infrastructure, platforms and software rather than traditional outsourcing and managed-services contracts,” Hall said. ISG held its 2026 managed services growth forecast at 2.1% while doubling its cloud forecast to 60%.
For buyers, providers are competing hard for a slower-growing pool of managed services work, which strengthens client leverage on price and scope.
Bundled back office deals are where BPO demand is growing fastest, so buyers consolidating vendors can expect sharper bids for multi-function contracts. Firms comparing providers can start with the top BPO companies worldwide list.
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Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
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