NEWS
AI drives cloud growth as Asia Pacific enterprises pull back on managed services
Enterprises across Asia Pacific continued investing in cloud services to support artificial intelligence but scaled back on managed services in the third quarter amid economic uncertainty, according to the latest ISG Index report.
The Asia Pacific ISG Index, which tracks outsourcing contracts with annual contract value( ACV) of at least US $ 5 million, showed a 10 % year-on-year increase in combined market ACV( XaaS and managed services) to US $ 5.7 billion, the region’ s strongest growth quarter of 2025. This rebound followed a 1 % decline in Q2.
Cloud-based‘ as-a-service’( XaaS) spending rose 14 % to US $ 4.9 billion, marking a fourth consecutive quarter of double-digit growth. Within XaaS, infrastructure-as-a-service( IaaS) advanced 13 % to US $ 4.3 billion, and software-as-a-service( SaaS) grew 18 % to US $ 563 million.
Managed services spending fell 9 % to US $ 849 million, with 58 contracts signed, down 6.5 % year-on-year, including two mega-deals exceeding US $ 100 million each. Smaller deals between US $ 5 million and US $ 10 million, however, surged 39 %, suggesting renewed discretionary spending. IT outsourcing( ITO) ACV dropped 19 % to US $ 536 million, while business process outsourcing( BPO) declined 63 % to US $ 55 million. Engineering, research and development( ER & D) services doubled to US $ 259 million.
Only media and telecommunications( up 253 %) and retail( up 140 %) posted growth among industries. China led geographically, driven by the Neusoft automotive mega-deal, while India rose 7 % and Australia – New Zealand fell 19 %.
“ AI remains the engine powering the Asia Pacific market,” said Michael Gale, ISG partner and regional leader.“ Cloud spending continues to buoy the region despite macroeconomic headwinds.”
Domo launches on AWS Asia-Pacific Region to boost India and APAC operations
value. The move marks a key milestone in Domo’ s global infrastructure strategy and underscores its commitment to the fastgrowing Indian and Asia-Pacific markets.
By leveraging the AWS Asia-Pacific Region, Domo can now run workloads and securely store content within India while ensuring faster performance for end users. Each AWS Region includes multiple independent Availability Zones with separate power, cooling and security, connected by ultra-low-latency networks to ensure business continuity and high availability.
Domo has announced the launch of its platform on the AWS Asia- Pacific Region, strengthening its presence and performance across India and the broader APAC market. This strategic expansion will reduce latency, enhance reliability and better support India-based customers as well as global enterprises with regional operations.
Domo’ s AI and Data Products platform helps organisations of all sizes turn raw data into actionable insights that deliver measurable
“ Our customers trust us to help them leverage one of their most valuable assets – their data,” said Daren Thayne, Chief Technology Officer at Domo.“ This expansion enables customers in India and across APAC to move faster while meeting the region’ s security, privacy and compliance standards.”
“ Domo’ s investment in India reflects its confidence in the region’ s tremendous growth potential,” added Naveen Kumar, Founder and Chief Executive Officer at GWC.“ With the new Mumbai data centre and Domo Free Trial access, Indian businesses can now securely experience how Domo’ s platform transforms data into business value.”
10 INTELLIGENTCIO APAC www. intelligentcio. com