Core Insights - Enterprises in the Asia Pacific region are continuing to invest in cloud services to support artificial intelligence initiatives, indicating a strong demand for cloud infrastructure [1] - However, there has been a noticeable pullback in spending on managed services during the third quarter, suggesting a shift in focus or budget allocation among enterprises [1] Summary by Category Cloud Services - The ongoing investment in cloud services highlights the importance of cloud infrastructure for businesses looking to enhance their AI capabilities [1] Managed Services - The reduction in expenditure on managed services in Q3 indicates a potential reevaluation of service needs or a strategic shift towards in-house capabilities or alternative solutions [1]

Core Insights - Enterprises are increasingly adopting AI and automation within digital workplace platforms to improve productivity, security, and employee experience [1] Group 1 - The integration of AI and automation is seen as a strategic move by companies to enhance operational efficiency [1] - The focus on digital workplace platforms indicates a shift towards more technology-driven environments in enterprises [1] - Improved employee experience is a key benefit highlighted by the adoption of these technologies [1]

Core Insights - The European market for technology services and software experienced a slowdown in the third quarter, despite ongoing strong demand for AI solutions [1] Group 1 - The ISG Index indicates that the demand for AI remains robust, yet it has not translated into overall market growth for technology services and software in Europe [1]

Core Insights - Enterprises in the Americas have increased their technology services spending in Q3, driven by interest in AI and despite macroeconomic uncertainties [1] Group 1 - The ISG Index indicates a notable acceleration in tech services spending among enterprises in the Americas during the third quarter [1] - The growth in spending reflects a strong demand for technology solutions, particularly in the AI sector [1] - This trend suggests a resilience in the tech services market, as companies prioritize investments in technology to enhance their operations [1]

Core Points - Information Services Group (ISG) will release its third-quarter financial results on November 3 [1] - The company will hold a call with investors following the financial results announcement [1]

Core Insights - The U.K. public sector is undergoing significant digital transformation, focusing on cloud adoption, cybersecurity, and AI integration to enhance service delivery and innovation [1][2][3] Digital Transformation and Budgeting - Public sector organizations in the U.K. are planning to increase their budgets for transformation through third-party services, driven by the government's digital roadmap [2][4] - There is a push for agile digital development while upgrading legacy systems, although digital maturity remains low due to skills shortages and outdated infrastructure [3][4] Service Delivery and User Experience - Government bodies are expanding user-centric online platforms and improving interoperability across departments to enhance transparency and service delivery [4] - The integration of AI and advanced analytics is aimed at streamlining operations and improving citizen experience [4][5] Cloud Migration and Security - Transitioning from legacy software to cloud services is crucial for increasing resilience and scalability in the public sector [5] - Public sector organizations are prioritizing cybersecurity due to a threefold increase in cyberattacks, focusing on risk management and continuous threat monitoring [6][7] Provider Evaluation and Leadership - The 2025 ISG Provider Lens report evaluates 36 providers across five quadrants, naming Capgemini and IBM as Leaders in five quadrants each [9][10] - NTT DATA and PwC are recognized as Leaders in four quadrants, while several other firms are acknowledged in varying capacities [10][11] Customer Experience Recognition - Capgemini is named the global ISG CX Star Performer for 2025, achieving the highest customer satisfaction scores in ISG's Voice of the Customer survey [12]

Core Insights - The ISG Index measures the overall health and growth of the technology industry, focusing on managed technology services and cloud-based software and infrastructure services [2] Group 1 - The ISG Index tracks and analyzes annual contract value (ACV) as a leading indicator of future revenues, equating ACV to bookings [2]

Core Insights - The ISG Index measures the overall health and growth of the technology industry, focusing on managed technology services and cloud-based software and infrastructure services [2] Group 1 - The ISG Index tracks and analyzes annual contract value (ACV) as a leading indicator of future revenues, equating ACV to bookings [2]

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Financial Data and Key Metrics Changes - The combined market is up 18% year to date, with as-a-service up 29% and managed services only up 1.5% [6][7][31] - Managed services in the Americas grew 15% year to date, while EMEA and Asia showed declines [4][7][32] - The BPO segment generated about $1.8 billion in ACV, down 16% year on year, with a year-to-date decline of 22% [18][19] Business Line Data and Key Metrics Changes - The ITO segment was down 2% year on year but up 5% year to date, with the Americas accounting for all growth [14] - Engineering services saw a significant increase, up nearly 60% year over year and 36% year to date [15] - The BPO segment has seen a long-term decline, with nine of the past 11 quarters showing year-on-year declines [18][19] Market Data and Key Metrics Changes - The as-a-service market, which includes SaaS, is now over 65% of the total volume [6][7] - The Americas managed services segment was up 22% year over year, while EMEA was down 25% [31][32] - Asia-Pacific managed services generated $2.5 billion of ACV, down 26% year to date [33] Company Strategy and Development Direction - The company emphasizes a shift towards cloud-first platforms and AI-driven solutions, indicating a fundamental replatforming rather than just hype [3][5] - There is a focus on automation and local hiring due to new H-1B visa policies, which are expected to reshape labor delivery models [5][10] - The company is adapting to a market that is increasingly integrating technology-led solutions into BPO services [20] Management's Comments on Operating Environment and Future Outlook - Management noted that while the macro environment remains uncertain, tech services spending in the U.S. is stabilizing and even expanding in some areas [31] - The outlook for managed services remains at 1.3% for the full year, while the forecast for as-a-service has been raised from 21% to 25% [57][58] - There are mixed signals in sectors like retail and automotive, with expectations of continued pressure on discretionary spending [61][64] Other Important Information - The company is seeing a significant shift in hiring patterns within BPO, focusing on specialized skills such as AI and data science [20][21] - Pricing pressures are evident across both BPO and ITO due to intense competition and the impact of AI [22] Q&A Session Summary Question: What is the demand outlook for tariff-hit sectors like retail and autos? - Management indicated that while retail is under pressure, there are signs of increased deal activity focused on cost optimization, but bookings have not yet reflected this [61][62] Question: Will the increase in as-a-service outlook help revive demand for system integrators around SaaS implementation? - Management believes that the SaaS market is driving demand for system integrators, particularly as organizations rationalize their infrastructure to be AI-ready [60] Question: Are there delays in decision-making due to the H-1B visa fee hike? - Management noted that while there was initial concern, clarity from the administration helped calm the market, and clients have not significantly slowed down their decision-making [65]