ISG: Asia Pacific tech services ACV rises 16% in Q1 on AI-driven XaaS demand

• ISG Index showed Asia Pacific technology services ACV rose 16% year on year in Q1 to USD 7.1 billion, driven by AI-related cloud demand.
• XaaS ACV increased 18% to a record USD 6.3 billion, led by IaaS up 19% to USD 5.6 billion.
• Managed services ACV edged up 1.9% to USD 791 million, snapping a four-quarter decline.
• ISG raised its 2026 forecast for XaaS revenue growth to 25%, keeping its managed services growth outlook at 2.1%.
• New ISG AI Index showed AI impact strongest in IaaS, up 160% since inception in December 2022.

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