With the rapid growth of technology and the rising complexity of company operations, organizations are looking for efficient and cost-effective solutions for managing their IT infrastructure and services. Thus, to solve these issues, many organizations have turned to various solutions and strategies. This is where the managed services solution comes in.
Managed service is a business model in which a third-party service provider continuously controls and maintains a company's technology and infrastructure. The managed services market is the industry that provides organizations with outsourced IT support and management services. It can include a wide range of services, such as monitoring and maintaining networks, servers, and applications; providing consulting and strategic planning services, managing security and backups; and offering help desk and technical support.
Recent Trends in the Managed Services Market
The managed services market is continuously evolving with new technologies and trends. Cloud computing adoption has continued to increase, resulting in an upsurge in the demand for cloud managed services. Many businesses outsource the operation of their cloud infrastructure, including networking, storage, and applications, to specialized MSPs (managed service providers). In addition, automation and artificial intelligence (AI) technologies are being used by managed service providers to streamline their service delivery. These technologies aided in proactive monitoring, swift issue resolution, and intelligent data analysis, resulting in increased productivity and cost savings.
Newest Insights in the Managed Services Market
As per a report by Research Dive, the global managed services market is expected to grow at a CAGR of 11.3% and generate revenue of $594.8 billion by 2031. The primary factors driving the growth of the market are the increasing use of cloud computing services, rising digitalization and uptake of innovative technology, growth of remote work, and expanding demand for safe and dependable IT infrastructure. However, a lack of skilled workers and data security concerns related to managed services solutions are expected to hinder the market growth.
The managed services market in North America is expected to remain dominant in the coming years. The region's high revenue in 2021 was driven by the need for efficient and cheap IT operations, an increased emphasis on significant company procedures, and a rise in cloud technology usage. This has led to a rising demand for dependable managed services providers to support businesses' IT operations and infrastructure.
How are Market Players Responding to the Rising Demand for Managed Services?
Market players are responding to the rising demand for managed services by investing in research and development to create more innovative and efficient managed services solutions. They are also increasing their service portfolios in order to provide a wider variety of managed services to their consumers.
In addition, market players are increasingly focusing on strategic partnerships and collaborations with other players in the industry to leverage their strengths and expand their reach. Some of the foremost players in the managed services market are Dimension Data, HCL, TCS, IBM, Atos, Cisco, AT&T, Fujitsu, Accenture, Ericsson, and others. These players are focused on implementing strategies such as mergers and acquisitions, novel developments, collaborations, and partnerships to reach a leading position in the global market.
- In May 2022, Finastra, a provider of financial software, announced the launch of FMS (Finastra Managed Services) on AWS (Amazon Web Services) to allow financial institutions and banks access to FMS in the AWS cloud. A prominent international U.S. bank on the West Coast was able to put out its lending solution with the help of FMS, which already has the advantage of being accessible in the AWS cloud.
- In November 2022, Tata Consultancy Services, a pioneer in IT services, announced the start of TCS Managed Services for Security with SAP, expanding its line of products that aid businesses in setting up and operating safe SAP systems on Microsoft Azure.
- In April 2023, Aeries Technology, a leading provider of professional services and consultancy to corporate management teams, private equity investors, and their portfolio firms, launched its cyber security managed services offering, delivering businesses with access to top-tier cyber security services and ISMS (Information Security Management Systems) built to meet and exceed the standards of an enterprise-level Chief Information Security Officer at a fraction of the cost of hiring in-house specialists.
COVID-19 Impact on the Global Managed Services Market
The COVID-19 pandemic had an adverse impact on the global managed services market. During the pandemic, the economic slump resulted in budget cuts, which impacted the demand for managed services. The pandemic had an influence on the market for on-premises managed services, as many organizations migrated to cloud-based services. Moreover, the pandemic's supply chain disruptions harmed managed service delivery, causing service delays and increased expenses. However, the pandemic raised the need for managed services in specific industries, including cloud computing and security. In addition, the move to remote work and increased use of cloud services resulted in an increase in demand for managed cloud computing and cybersecurity services. Many organizations wanted to outsource their operations so they could focus on their main businesses, which created demand for managed services. These factors had a significant impact on the managed services market growth amidst the pandemic.