Hello. This is Stanton Jones along with Alex Bakker, Michael Dornan and Sunder Sarangan with a special edition of what’s important in the IT and business services industry this week.
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IT & Business Services in 2025
As we discussed last week, enterprise IT organizations have some big plans in 2025. Those plans can be summarized in two major themes: 1) deploying AI to improve productivity, and 2) funding it by optimizing costs elsewhere.
Given this context, here are eight implications for the IT and business services industry in 2025. You can read the full post with charts here.
Implication No. 1: Large Deal Activity Will Continue to Be Strong. An economic environment where interest rates are still elevated favors larger deals, including mega deals with more than $100 million in annual contract value.
Implication No. 2: Longer Deals Will Continue to Be the Norm – Not the Exception. The way firms will get to net new savings in 2025 will be through technology modernization, which takes time and bundling of scope – which means longer deals.
Implication No. 3: Providers Will Be Expected to Improve Productivity. Providers will respond to enterprise cost optimization needs by turbocharging the use of generative AI in their delivery. Providers who are unable to demonstrably improve productivity will struggle to stay competitive.
Implication No. 4: BFSI Bookings Will Likely Bounce Back. IT services bookings in the BFSI sector have been under significant pressure in 2024. The lowering of interest rates typically stimulates economic activity, which will likely lead to increased technology investments in the BFSI sector.
Implication No. 5: Pricing Will Be Critical to Success (but Won’t Significantly Change). Enterprises will continue to aggressively benchmark prices and rate cards in 2025 to find savings, which means providers need to have market-aligned pricing to win – and retain – business.
Implication No. 6: Industry Headcount Set for Return to Growth. Industry headcount growth will return in 2025, with providers hiring to address a likely increase in attrition, new demand and the expected ramp-up of large deals.
Implication No. 7: Providers Will Embrace the GCC Wave. Providers will need to embrace the GCC wave with three primary motions: work with, sell to and take over GCCs, depending on the needs of their clients and prospects.
Implication No. 8: AI Will Have a Meaningful Impact on Provider Growth. As enterprises continue to decouple data management from technology management, it will create a new “data tower” that enterprises will source – creating opportunity for providers with strong analytics and AI capabilities.
As a reminder, you can read the full post 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.
Alex Bakker
Michael Dornan
Michael Dornan is a Principal Analyst in Provider Services based in the UK. He is responsible for ISG’s Buyer Behavior research program, helping providers navigate changing market dynamics, identify unmet enterprise demand, and position services and solutions that align to client needs.
