ISG Index Q2 2026: What the Latest Data Reveals About the Global Tech Services Market

The global technology services market continues to be reshaped by enterprise AI adoption and hyperscaler investment, but the most recent quarterly check-in — the Q2 2026 ISG Index — has not yet been published. As of mid-July 2026, the latest available ISG Index covers the first quarter of 2026, released on April 16, 2026, with accompanying presentation materials updated on July 9, 2026 . This means any discussion of Q2 2026 findings must rely on the Q1 2026 results and ISG's revised full-year 2026 outlook as the best available proxy.

The Q1 2026 ISG Index: A Record Quarter

The Q1 2026 ISG Index report, which tracks commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, documented a combined global market (managed services plus cloud-based XaaS) that reached nearly $40 billion in ACV — a record high that grew nearly 30% year-over-year . This was the strongest growth rate the index has recorded, surpassing the previous quarter's 16% year-over-year gain seen in Q4 2025 .

Within that combined total:

• Managed services posted its second-best quarter ever, with 18 of the last 21 quarters showing positive trends .
• XaaS (Everything-as-a-Service, encompassing cloud infrastructure and software) delivered its best quarter ever, up 44% year-over-year — its seventh consecutive quarter of double-digit gains .

“The global technology services market surged to a new record in the first quarter as enterprises accelerated their AI adoption and continued to seek cost savings,” ISG stated in its April 2026 press release .

The Role of AI Demand

Enterprise AI adoption was the clear primary driver of Q1 2026 growth. The ISG presentation notes that AI demand remained “exceptionally strong” at the enterprise level and served as the primary catalyst for cloud services growth . The investment pattern is stark: IaaS (Infrastructure-as-a-Service) has captured the “first wave of AI value,” driven by hyperscaler capital spending that surged 265% . SaaS (Software-as-a-Service) is now beginning to monetize AI as well, with revenue and backlog growing ahead of profitability as the market works through new pricing models for AI capabilities .

ISG notes that AI is “reshaping enterprise investment priorities and delivery models” across the entire technology services landscape .

ISG's Revised Full-Year 2026 Forecast

Based on the strong Q1 performance and sustained AI demand, ISG raised its full-year 2026 growth forecast for the XaaS segment to 25%, up from the earlier estimate of 20% set at the end of 2025 . The managed services growth forecast was maintained at 2.1%, reflecting a stabilizing environment but continued weakness in discretionary spending .

Metric	Q1 2026 Result	2026 Full-Year Forecast
Combined Market ACV	~$40B, +30% Y/Y	—
XaaS Growth	Best quarter ever, +44% Y/Y	+25% (raised from 20%)
Managed Services Growth	2nd-best quarter ever	+2.1% (maintained)
Primary Driver	Enterprise AI adoption	AI & hyperscaler investment

Why There Is No Q2 2026 Release Yet

The typical ISG Index release cadence has Q1 results published in April, Q2 in July, Q3 in October, and Q4/full-year in January. As of the date of this analysis (July 10, 2026), no Q2 2026 press release or public data set had been published by ISG . The Q1 2026 presentation was updated on July 9, 2026, suggesting ISG continues to refine its 2026 outlook based on real-time market conditions — but the Q2 data itself remains forthcoming .

Key Takeaway

Without a Q2 2026 release, the most reliable picture of the current market comes from Q1 2026: a record-setting quarter where AI-driven XaaS spending propelled the combined market to nearly $40 billion. ISG’s raised full-year XaaS forecast to 25% signals confidence that this momentum will continue through the rest of 2026. The managed services segment, while growing more slowly at 2.1%, remains stable and is expected to see a bigger AI impact in the future as productivity indicators begin to move .