AI Demand Drives Americas Tech Services Market to Record $27.5 Billion

Technology research firm Information Services Group, Inc. (NASDAQ:III) raised its full-year growth forecast for cloud services as technology services spending in the Americas reached a record $27.5 billion in third-quarter annual contract value, up 61% year-over-year. Growth was driven by an unprecedented 129% surge in cloud infrastructure services, which reached $18.1 billion due to heavy demand for artificial intelligence capabilities. Cloud-based software services also climbed 21% to $3.4 billion, bringing total as-a-service spending to $21.6 billion.

In contrast, traditional managed services spending fell 6% year-over-year to $6.0 billion as enterprise clients prioritized cloud infrastructure over traditional outsourcing. Within managed services, IT outsourcing dropped 7% to $4.8 billion, while business process outsourcing fell 6% to $931 million. Total managed services contract volume decreased 11% to 426 awards, and mega-deal contract value sank 64%. However, engineering research and development managed services grew 18% to $287 million.

Looking ahead, full-year 2026 growth projections for cloud-based services were doubled to 60%, up from a previous estimate of 30%. Within cloud spending, infrastructure services are projected to grow 80% for the full year, while software-as-a-service is expected to rise 12.5%. The full-year forecast for traditional managed services remains unchanged at 2.1% growth.