Market researcher International Data Corporation (IDC) has said that it expects to see a rise in managed services deals in 2024 with services linked to cloud and artificial intelligence at the fore.

The firm notes that about 1,800 managed services deals were signed in 2023 worth more than $100 billion in contract value, and that this figure should rise in 2024 following a steady increase in enterprise technology spend – particularly with larger investments in managed services deals involving cloud and AI services.

Some 45 per cent of global total contract value (TCV) was signed in the US with notable deals such as an agreement between AT&T and Ericsson worth $14 billion. Western Europe accounted for 42 per cent of TCV which IDC noted was a significant increase compared to 2022 thanks to deals such as the £1.5 billion agreement between Liberty Global and Infosys.

The growth of AI in the mainstream consciousness was reflected in the nature of many deals, with the average size of AI-related deals more than doubling in 2023 compared to 2022.

“Although AI offerings are mainly bundled with managed services, we are seeing higher levels of AI implementations across major sectors, particularly manufacturing and financial services,” the report says.

“Major services providers have vigorously worked on upskilling their workforce to meet the upcoming demand for Generative AI applications as organisations will want further integration with their existing applications and processes.”

The report concludes that though broader economic indicators are mixed, tech spend is projected to grow across all regions in the coming years with several “mega deals” worth more than $500 million already being signed in Q1.

Around 15 per cent of TCV is from deals involving AI with about 60 per cent from cloud deals.

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