Hello. This is Stanton Jones and Steve Hall with a special preview of the ISG Index 2Q24 call next Thursday, July 11, at 9:00 AM U.S. ET. Reserve your spot for the call here.
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2Q24 Index Preview
Cost optimization continues to be the primary driver of managed services demand; enterprise discretionary spending remains under pressure. Still, we see deal decision-making improving in some areas, and demand for generative AI-related project work remains very strong.
Questions we’ll address on the call:
- When will discretionary spending free up? An interest rate cut in the U.S. could spur increased discretionary technology spending in Q4 2024, but we don’t see that having a material impact on the full year. This will likely keep the industry in the low single-digit growth range for 2024.
- Is generative AI creating new demand for enterprise software? We see very strong interest from enterprise technology leaders in adding AI to their existing software portfolio. However, given the level of customization most enterprises have today in their business applications, it will take longer than anticipated to realize value from these investments.
- Is the strong global capability center (GCC) activity impacting IT services demand? As we’ve discussed over the past 12 months, GCC activity continues to be very strong. However, enterprise interest in scaling down or exiting a GCC is just as common as interest in building or scaling up a GCC. This means there is both opportunity and risk for providers as the GCC wave continues.
- How is AI impacting IT service provider productivity? As of today, we’re seeing only minimal impact of GenAI on service provider productivity. However, we do expect over time to see a significantly bigger impact, especially in areas like testing, coding and customer experience.
Register for the Call
I hope you can join Steve, Kathy, Namratha, Dave and me on the call next Thursday, July 11, at 9:00 AM U.S. ET. We’ll review these key questions and discuss our forecast for the remainder of the year. Don’t forget to register 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.
