7 Latest Trends to Watch Out for in Managed Services Market
Managed services abides the responsibility for the functionality of the IT services & infrastructure of an organization, so the business can increasingly focus on its core competencies. The rising demand for managed services is mostly driven by unpredictable, volatile macroeconomic environment and increased pressure to transform with technological advancements. The latest managed services market trends are predicted to create lucrative growth opportunities for market vendors in the coming future.
The world is observing a paradigm shift in terms of recent & latest trends and technological advancements redefining the way business is done. The datum that business models face great pressure from macroeconomic, regulatory, and other critical market forces, have demanded an amplified focus on operational effectiveness and efficiency. However, this might make the businesses sense the burn on their cost, capital, and revenue. In addition, they are progressively turning to managed services to address these complications in order to focus their time on activities that more valuable to their business.
According to a Research Dive published report, the global managed services market is estimated to witness a robust growth during the forecast period from 2019 to 2027. The global market is projected to surpass US$ 410,707.9 million by 2027 owing to the increasing adoption of cloud technology in numerous organizations across the globe for efficient operation flow.
What are Managed Services?
A managed service provider (MSP) abides the responsibility for the functionality of the IT services & infrastructure of an organization, so the business can increasingly focus on its core competencies. Consequently, the MSP partner, in managed model takes on, transforms, and runs an organization’s business processes and operations to increase its operational efficiency and productivity.
The rising demand for managed services is mostly driven by various factors and some of them are listed below:
- Unpredictable, volatile macroeconomic environment.
- Augmented pressure to transform while keeping pace with advancements in technology.
- Need to meet rising demands of regulatory compliance.
- Lack of deep and internal technical expertise.
Latest Managed Services Trends
Here are the latest trends in the managed services market (security, IT, cloud):
Improved Stake on Security & Growth in Cyber-attacks
The clients of managed service providers usually believe that the latter will take care of the security of their data and information. An increase in the number of cyber-attacks are observed over the last few years. This has forced many companies and organizations to adopt a ‘security-first’ thinking.
Managed service providers, thus, put more efforts in order to secure service infrastructure of their clients. Therefore, it’s not only about having security solutions in place, but also to recover and defend against any attack.
Cloud, Outsourcing, and Automation
Cloud: It is increasingly being used to build novel platforms for improving customer engagement to meet the enterprises needs’ of digital transformation. Application of multi-cloud environments is observing an enormous growth, wherein customers are depending on one cloud heavily, while making use of the other sporadically. Here, the managed service providers can avail the big opportunity by providing consumption-based pricing models.
Outsourcing: It is identified as the third factor that is expected to impact managed service market. An increase in number of outsourcing activities will result in MSPs decreasing their dependence on traditional service-level agreements (SLAs) and more on experience level agreements (XLAs). XLAs will focus more on employee and customer satisfaction than uptime.
Automation: An increasing amount of automation in information technology (IT) environments can replace a considerable amount of work. Managed services can expect the workloads to reduce with every contract, as most of the operations become automated.
Introduction of Independent Software Vendors (ISVs) and Telcos
Telcos or telecom service providers are making use of their existing scale & IT savviness to shift beyond voice and data services to selling managed offerings.
Telcos already work on the subscription model and thus, know a lot about it. As these service providers enter the managed services space, the existing managed services will feel the pressure to try new & innovative things to increase revenue ahead and beyond.
Emerging Technologies like Blockchain and IoT
Emerging technologies like Internet of Things (IoT) and Blockchain can create big opportunities for managed service providers. However, organizations need deep understanding and skill set to use these technologies. Competitive managed services can identify this gap and obtain substantial knowledge on these advanced & emerging technologies. In addition, small to medium sized businesses (SMBs) are also projected to adopt virtual reality, AI, augmented reality and other technologies.
Increased Mergers and Acquisitions
As per a Research Dive analyst review , an increased in the number of mergers and acquisitions are adopted by the companies that are operating in the global managed services market, which is helping the market to grow exponentially.
Enormous Growth in as-a-service Technologies
It is estimate that there will be a surge in as-a-service technologies, such as infrastructure-as-a-service (IaaS), software-as-a-service (SaaS) platform-as-a-service (PaaS), etc.
These technologies provide various advantages in terms of scalability, security, cost, as they are on subscription-based billing model. A managed service provider can assist an organization to switch to these services and manage them easily.
Demand for Outcome-based Services
Today, enterprise clients look towards result-based outcomes with expected or pre-defined. This can be considered as one of the reasons for customers opting for full stack service providers and not single-tower services. Thus, the managed services is need to be evolved in terms of style of functions and management they provide, to meet this trend. The MSPs must be able to provide consulting services to their enterprise clients in terms of measurable results.
The Bottom Line
An opportunity comes only to those who are prepared. Hence, a lot of legwork is required in order to build a successful managed services practice. The MSPs have to perfect every process from preliminary assessment to signing contract and ultimately to managing services. Thus, by staying updated on the trends, MSPs can ensure that they will be ready to capitalize on it quickly in this competitive world of business.
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