|Fastest Growing Market:||Asia Pacific|
|Largest Market:||North America|
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The global managed services market (henceforth, referred to as the market studied) was valued at USD 161.37 billion in 2021, and it is expected to reach USD 311.32 billion by 2027, registering a CAGR of 12.44% during the forecast period, 2022-2027 (henceforth, referred to as the forecast period). SMBs are expected to be the driving factors that are positively impacting the market growth, as more and more SMBs are looking to outsource non-core activities. According to Datto, on average, MSPs report a client base of 122 clients, and about 60% of the MSP's clients have between 1-150 employees; also, only 5% of the MSPs reported clients with over 500 employees.
- Managed services offer various benefits that are proven to positively impact the development of the organization that adopts such services as they can focus on their core expertise. It is estimated that successful deployment of managed services will help reduce IT cost by 25-45% and increase operational efficiency by 45-65%. Also, 25% of organizations said downtime costs averaged between USD 301,000 and USD 400,000 per hour (source: Intelligent Technical Solutions).
- Moreover, 2022 will be all about application deployments matched to the speed of development. The application maintenance and support services will be pivotal to the managed services in IT. Application performance monitoring (APM), for instance, will imbibe a quick feedback mechanism for developers. Front-end monitoring (for studying user behavior), ADTD (for application discovery, tracing, and diagnostics), and AIOps analytics (for detecting application lifecycle patterns and anomalies) will all be parts of APM. These solutions will help the DevOps team to analyze business problems better. It will cut down on their mean time to repair (MTTR).
- With industry requirements, standards, and consumer needs changing by the day, businesses are now seeking result-based outcomes. They require possession of pre-defined or expected criteria documented clearly, in real-time. The MSP will now be seen using advanced analytics and reporting to state the impact of technologies implemented and present factual data.
- Further, the Blockchain and IoT technologies are set to create better opportunities for the managed services providers, as these organizations require expertise to implement these technologies. To get a hold of these opportunities and stay relevant and keep up with the competition, the managed services providers are increasingly acquiring essential skillsets for these, among other innovative technologies, like AR, VR, and AI.
- Since the outbreak of COVID-19, the demand for cloud-based solutions has seen significant growth due to remote working models being adopted by enterprises. As more IT decision-makers look to take advantage of modern cloud environments, they are increasingly running into longer project runways and the need for bigger budgets. Nearly half (48%) of the US and the UK IT decision-makers say the average length of time it takes them to complete a single multi-cloud application migration successfully is 1-2 months (source: Wanclouds).
Scope of the Report
Managed service is the practice of outsourcing on a proactive basis certain processes and functions intended to improve operations and cut expenses. It simplifies IT operations, increases user satisfaction, and improves service quality while reducing operating costs. Managed services options range from short-term post-go-live assistance to long-term application operations.
The scope of the study includes segmentation by deployment, type, enterprise size, end-user vertical, and geography. Under the segmentation by type, managed data center, managed security, managed communications, managed network, managed infrastructure, and managed mobility have been considered. The market estimates indicate the revenues accrued through the above-managed services types across various geographies. The impact of the COVID-19 has also been considered for market estimation and future projection.
Under the end-user vertical, BFSI, IT and telecommunication, healthcare and hospitality, entertainment and media, retail, manufacturing, government, and other end-user verticals have been considered.
The deployment has been considered through on-premise and cloud-type solutions. The enterprise size considered includes small and medium enterprises and large enterprises.
|Managed Data Center|
|Small and Medium Enterprises|
|IT and Telecommunication|
|Entertainment and Media|
|Other End-User Verticals|
Key Market Trends
Manufacturing is Expected to Hold a Significant Market Share
- In the current technology-driven business environment, Big Data stands as one of the primary drivers of productivity and efficiency for manufacturers. With the high rate of adoption of sensors and connected devices and the enabling of M2M communication, there has been a massive increase in the data points that are generated in the manufacturing industry.
- Industries are pitching hard and fast to switch to a “smart industry,” where data generation and visualization can become real-time. From descriptive to predictive, the evolution of analytics has made the industry aware of the benefits that it can reap from this volume of data. The motto of the manufacturing industry is moving toward a metrics-based industry, which can improve decision-making based on the data-driven use of statistics.
- With the concept of Industry 4.0 influencing production establishments in the manufacturing industry, the amount of data produced from the manufacturing industry has snowballed, as they have been able to create data from each process point, varying from temperature, pressure, humidity, stress, strain, and quality, among multiple others.
- There are several applications in the field of semiconductors, consumer electronics, and the automotive industry, where manufacturers have to monitor numerous variables to ensure the quality of end products, wherein Big Data analytics has emerged as an effective solution to the traditional methods.
- As most small and medium manufacturing industries are more concentrated on hardware equipment and lack expertise in software solutions, they are outsourcing these Big Data analytic solutions.
- Outsourcing the software services is further reducing their expenditure. This trend of outsourcing other software services, such as field service management and ERP, is expected to boost managed services during the forecast period.
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Asia-Pacific is Expected to be the Fastest Growing Market
- The digital transformation has become a top priority in the country and is moving rapidly, as a greater number of companies are implementing formal strategies to support their efforts. In January 2021, China's State Council released a proposal to help the digital economy flourish throughout the 14th Five-Year Plan period (2021-2025). According to the plan, China's digital transformation of industries will reach a new level by 2025, while digital public services will become more inclusive, and the digital economy governance structure will visibly improve.
- The managed service providers in China are focusing on reducing security risks and optimizing operations for the end-users by keeping up with the latest technologies. The managed services market is majorly offered by the telecommunication companies in the country. Also, these companies are strategically acquiring companies offering managed services to gain more market share.
- Further, the banking sector in India is experiencing a colossal change due to the rapid evolution of technology in their vertical, which led to the adoption of cloud computing services by these organizations for addressing their issues. Further, the managed storage providers in the country are investing in developing an integrated cloud storage platform dedicated to the BFSI sector.
- Moreover, the ongoing extensive investments by the Indian government toward physical infrastructures, like smart cities, are expected to create more opportunities for the deployment of managed services, like data storage, security, and network management, in the country. Currently, the Indian smart cities program is focused on transforming 100 cities.
- In January 2022, KPMG India and Qualys announced a partnership to add Qualys solutions to KPMG's Managed Security service. KPMG's industry-leading and globally recognized cybersecurity services in India will be combined with Qualys' world-class cybersecurity innovations to enable enterprises to protect their network, applications, endpoints, and cloud workloads from security vulnerabilities, provide visibility, and ensure compliance.
- Whereas, with the service industry taking up the largest portion of its GDP, Japan has much to share in the area of managing the service industry. Japan has always been a market-oriented economy and represents the second most developed economy in the world. Currently, the country is focusing on the manufacturing sectors, including the production of hybrid vehicles, robotics, and optical instruments.
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The managed services market is consolidated, as major players dominate it. Some of the major players in the market are Cisco Systems Inc., IBM Corporation, Microsoft Corporation, Fujitsu Ltd, and Wipro Ltd. The market players are forming strategic collaborations to enhance their market presence.
- January 2022: Rackspace Technology and BT announced a partnership agreement to transform BT’s multinational customers’ cloud services. Under the terms of the agreement, BT hybrid cloud services will be based on Rackspace Technology’s solutions, which the company will deploy in BT data centers along with its Rackspace Fabric management layer.
- December 2021: Verizon Business announced enhancement in its Network as a Service (NaaS) digitization strategy with the addition of Cisco-managed SD-WAN services, including options for 4G/5G connectivity. With these new solutions, enterprises can leverage Verizon’s 4G and 5G networks, as well as the network-as-a-service strategy, giving them the ability to scale, adopt the latest technology, and remain agile to meet the ever-changing customer demands.
- September 2021: IBM announced that Virescent Infrastructure, a renewable energy platform backed by leading global investment firm KKR, is collaborating with IBM Global Business Services (GBS) and SAP to deploy RISE with SAP, an SAP offering that brings together what businesses need to pursue digital transformation objectives and accelerate their move to the cloud. Virescent Infrastructure chose RISE with SAP to completely redesign its processes for better business outcomes, business networks, and core business applications.
- January 2022: Tata Consultancy Services (TCS) announced that it became a partner for the newly-launched Microsoft Cloud for Retail. As part of this partnership, TCS will work with leading retailers and its multi-horizon cloud transformation framework to help retail clients accelerate their growth and transformation journeys using Microsoft Cloud for Retail.
- November 2021: Ericsson announced the release of its Intelligent Automation Platform, a service management and orchestration tool that allows any mobile network to be intelligently automated. As a natural next step in building the networks of the future, Ericsson is adding the Ericsson Intelligent Automation Platform and a suite of rApps to its existing products, which include cloud-native dual-mode 5G Core and the Cloud RAN portfolio.
- October 2021: Wipro announced that it had signed a multi-year global strategic IT and digital deal with London - headquartered National Grid, a leading multinational electric and gas utility provider, to accelerate its digital innovation journey. As part of the deal, Wipro will employ standardized tools and processes to provide cloud services that will strengthen National Grid’s infrastructure services.
Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis
4.4 Assessment of the Impact of COVID-19 on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Increasing Shift to Hybrid IT
5.1.2 Improved Cost and Operational Efficiency
5.2 Market Challenges
5.2.1 Integration and Regulatory Issues and Reliability Concerns
6. MARKET SEGMENTATION
6.2.1 Managed Data Center
6.2.2 Managed Security
6.2.3 Managed Communications
6.2.4 Managed Network
6.2.5 Managed Infrastructure
6.2.6 Managed Mobility
6.3 Enterprise Size
6.3.1 Small and Medium Enterprises
6.3.2 Large Enterprises
6.4 End-user Vertical
6.4.2 IT and Telecommunication
6.4.4 Entertainment and Media
6.4.8 Other End-User Verticals
6.5.1 North America
22.214.171.124 United States
126.96.36.199 United Kingdom
188.8.131.52 Rest of Europe
184.108.40.206 Rest of Asia-Pacific
6.5.4 Latin America
220.127.116.11 Rest of Latin America
6.5.5 Middle East & Africa
18.104.22.168 United Arab Emirates
22.214.171.124 Saudi Arabia
126.96.36.199 South Africa
188.8.131.52 Rest of Middle East & Africa
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles*
7.1.1 Fujitsu Ltd
7.1.2 Cisco Systems Inc.
7.1.3 IBM Corporation
7.1.4 AT&T Inc.
7.1.5 HP Development Company LP
7.1.6 Microsoft Corporation
7.1.7 Verizon Communications Inc.
7.1.8 Dell Technologies Inc.
7.1.9 Nokia Solutions and Networks
7.1.10 Deutsche Telekom AG
7.1.11 Rackspace Inc.
7.1.12 Tata Consultancy Services Limited
7.1.13 Citrix Systems Inc.
7.1.14 Wipro Ltd
7.1.15 NSC Global Ltd
7.1.16 Telefonaktiebolaget LM Ericsson
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
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Frequently Asked Questions
What is the study period of this market?
The Managed Services Market market is studied from 2020 - 2027.
What is the growth rate of Managed Services Market ?
The Managed Services Market is growing at a CAGR of 12.44% over the next 5 years.
Which region has highest growth rate in Managed Services Market ?
Asia Pacific is growing at the highest CAGR over 2021- 2026.
Which region has largest share in Managed Services Market ?
North America holds highest share in 2021.
Who are the key players in Managed Services Market ?
Fujitsu Ltd, Cisco Systems Inc., IBM Corporation, AT&T Inc., HP Development Company LP are the major companies operating in Managed Services Market .