Index Insider: 1Q24 Special Edition


Hello. This is Stanton Jones and Steve Hall with a special preview of the ISG Index 1Q24 call next Thursday, April 11, at 9:00 AM U.S. ET. Reserve your spot for the call here.

If you’d like to read this on the web, click here. If someone forwarded you this briefing, consider subscribing here.


1Q24 Index Preview

Decision making slowed in the first quarter and cost optimization continued to be the primary driver of IT and business services demand. AI continues to shape demand, but project-based spending remains under pressure, and AI related spending is coming at the cost of other areas in the IT budget.

Questions We’ll Address on the Index Call

  • How is the sustained focus on cost optimization impacting demand? Elevated interest rates and inflation continue to put cost pressure on enterprises, which contributed to the strong results in 2023. The focus on cost optimization continued in the first quarter, but decision making remains delayed as enterprises struggle with tighter budgets.
  • How is inflation impacting pricing? Except for a few specialty skills, we did not see a significant increase in labor rates in 2023 or the first quarter of 2024. On the other hand, unit prices continue to decline year over year, but that decline is slowing in most areas as both labor and software costs go up.
  • When will cloud demand return? Cloud bookings have been under a lot of pressure over the past year as enterprises focused on optimizing existing cloud commitments. However, that may be starting to change as demand for AI-enabled applications drives net new cloud demand.
  • How is enterprise AI adoption playing out? As we saw in our most recent Market Lens AI study, enterprise AI priorities today are focused on 1) creating a long-term strategy 2) developing use cases around revenue generation, and 3) using AI to improve customer experience. Given that IT budgets are largely flat, funding for AI pilots will come at the expense of other parts of the IT budget, or from line of business budgets.

Register for the Call

I hope you can join Steve, Kathy, Namratha, Alex and me on the call next Thursday, April 11, at 9:00 AM U.S. ET, where we’ll review these key questions and discuss our forecast for the remainder of the year. You can register here.


About the authors

Stanton Jones

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, and has appeared on national cable news.

Steve Hall

Steve Hall

What he does at ISG

As the leader of ISG’s business in EMEA and an Executive Board Member, Steve provides strategic insight and advice to help ISG’s clients solve their most critical business challenges, helping them adopt and optimize the technology and operating models they need to compete successfully. In particular, he uses his long experience and broad expertise to challenge and inspire them to think about their risks and opportunities in new and unexpected ways.

Past achievements for clients

Steve leads his team’s engagement with clients with an industry-recognized and highly valued perspective on the most important trends in business and technology. He asks and answers the big questions: Why do you need to transform? What’s your best way forward? What do you need to accelerate? And where should you invest your technology dollars to make it all happen?

Among his many client success stories, his ability to take in the big picture, define the problem and connect the dots to the right solutions helped one legacy postal and shipping giant transform itself into a modern logistics powerhouse. He also guided a global energy industry leader through a complex operating model and IT provider transition, helping them see past the obvious cost cutting measures to identify the root causes of their challenges—and delivering savings far beyond what they had imagined.