Managed Services Market Size (2024 - 2029)

Managed Services Market Analysis

The Managed Services Market size is estimated at USD 280.96 billion in 2024, and is expected to reach USD 410.92 billion by 2029, growing at a CAGR of 7.90% during the forecast period (2024-2029).

Small and midsize Businesses (SMB) are expected to be the driving factors that positively impact the market's 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. Additionally, 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 successfully deploying managed services will help reduce IT cost by 25-45% and increase operational efficiency by 45-65%. In addition, according to Intelligent Technical Solutions, 25% of organizations said downtime costs averaged between USD 301,000 and USD 400,000 per hour.
• Moreover, 2022 was expected to be all about application deployments matched to the development speed. The application maintenance and support services will be pivotal to the managed services in IT. Application performance monitoring (APM) 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 daily, businesses are seeking result-based outcomes. They require possession of pre-defined or expected criteria documented clearly, and in real time. The MSP will now be seen using advanced analytics and reporting to state the implemented technologies' impact and present factual data.
• Further, the Blockchain and IoT technologies are set to create better opportunities for managed services providers, as these organizations require expertise to implement these technologies. To get a hold of these opportunities, stay relevant, and keep up with the competition, managed services providers increasingly acquire essential skill sets for these, among other innovative technologies, like AR, VR, and AI.
• Since the outbreak of COVID-19, the demand for cloud-based solutions saw 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. According to Wanclouds, nearly half (48%) of the US and the UK IT decision-makers say the average time it takes them to complete a single multi-cloud application migration successfully is 1-2 months.

Managed Services Industry Segmentation

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, communications, network, infrastructure, and mobility have been considered. The market estimates indicate the revenues accrued through the above-managed service types across various geographies. The impact of COVID-19 has also been considered for market estimation and future projections.

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. North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa have been considered under geography.

The market sizes and forecasts are provided in terms of value (USD billion) for all the above segments.