Managed Services Market Size Projected to Generate a Revenue of $594.8 Billion by 2031Download Sample Reports Overview
The Global Managed Services Market Size is predicted to be valued at $594.8 billion by 2031, surging from $205.5 billion in 2021, at a noteworthy CAGR of 11.3%.
Impact Analysis of COVID-19 on the Managed Services Market
The impact of the COVID-19 on the managed services market had been mixed, with both challenges and opportunities for companies in the industry. Many organizations had to shift to remote work to comply with social distancing guidelines, which led to an increase in demand for managed services to support these new working arrangements. The demand for managed services increased due to the rise in the need for social distancing and remote working mode. Companies were looking for ways to manage their IT infrastructure remotely, and managed services providers were well positioned to help with this. The pandemic accelerated the adoption of cloud technologies, which created more opportunities for managed services providers. As companies moved their infrastructure to the cloud, they needed help managing it, and managed services providers could provide this support. The risk of cyber-attacks also increased during the pandemic due to the increase in remote work. Managed services providers were able to provide cybersecurity services to help companies protect their networks and data.
The pandemic also had a negative impact on many businesses, causing them to cut back on their IT budgets. This led to a slowdown in the growth of the managed services market in some areas. The pandemic disrupted global supply chains, which made it difficult for managed services providers to source hardware and other equipment. The pandemic led to delays in projects as companies had to adapt to remote working and changing business conditions. This resulted in a slowdown in the managed services market as some companies had put their projects on hold.
Global Managed Services Market Analysis
The need for cost-effective solutions is one of the major growth factors of the managed services market. Managed services providers can provide the cost-effective solutions that several organizations are searching for to manage their IT infrastructure and services while still maintaining high levels of performance and dependability. By managing and maintaining an organization's IT infrastructure and services, managed services companies can assist businesses in lowering their IT expenses. This can involve activities like managing software and hardware upgrades, keeping updated network performance, and giving end users technical support. Organizations can lower their IT staffing expenses by outsourcing the responsibilities to a managed services provider. Managed service providers can help businesses reduce costs while simultaneously enhancing the performance and dependability of their IT systems. Managed service providers frequently employ highly qualified and knowledgeable IT specialists that can provide proactive monitoring and maintenance of IT infrastructure and services, assisting in the prevention of problems before they become serious ones. This can assist businesses in avoiding expensive downtime and ensuring that their IT systems are consistently performing at their best. These are the major factors anticipated to boost the managed services market share during the forecast time.
However, less on-site availability of managed services is one of the major factors expected to hamper the market growth. The managed IT service team is less accessible to address urgent concerns because they are not physically present in the office. In addition, if the MSP does not have a local office, they are unable to provide on-site support. This factor is predicted to hamper the managed services market revenue growth during the forecast period.
The rising demand for cloud services has created a significant opportunity for managed services providers (MSPs). As more businesses move their data and applications to the cloud, they need help managing and maintaining their cloud infrastructure. MSPs can provide services such as cloud migration, monitoring, security, and optimization to help businesses maximize the benefits of the cloud while minimizing risk and costs. In addition to cloud services, MSPs can also offer a variety of other managed services, such as network management, data backup and restore, and IT support. This allows businesses to outsource their IT needs and focus on their core competencies. The managed services market is expected to continue to grow as businesses increasingly rely on technology to operate and compete. MSPs that can offer a wide range of services and specialize in cloud management are well positioned to capitalize on this trend.
Global Managed Services Market, Segmentation
The managed services market is segmented on the basis of organization size, deployment type, service type, industry vertical, and region.
The organization size segment is further classified into SME and large. Among these, the large sub-segment accounted for the highest market share in 2021. Large enterprises have complicated IT setups that demand resources with knowledge to operate, which can be quite difficult for internal IT staff. These organizations may lower their overhead expenses and free up internal staff to concentrate on more important objectives by outsourcing these tasks to managed services providers. Managed services providers offer a range of services to large enterprises, including infrastructure management, network management, security services, and application management. These providers can leverage economies of scale and expertise to deliver these services more efficiently and cost-effectively than an internal IT team could. This can result in significant cost savings for large enterprises, as well as improved performance and reliability of their IT infrastructure.
The deployment type segment is further classified into cloud and on-premise. Among these, the cloud sub-segment is anticipated to witness the fastest CAGR during the forecast period. The management and monitoring of an organization's IT infrastructure, applications, and data via cloud-based solutions. Cloud-based solutions are being used more often across various sectors due to its scalability, flexibility, and affordability, which is driving the segment growth. Cloud-based technologies are being used by managed service providers (MSPs) to deliver a variety of services, such as cloud migration, cloud administration, and cloud security. Managed services delivered via the cloud may save IT infrastructure costs, boost operational effectiveness, and increase an organization's overall business agility. In addition, MSPs are now able to provide proactive monitoring and control of their customers' IT infrastructures, reducing downtime and ensuring business continuity. Furthermore, cloud-based managed services may offer real-time analytics and insights that can aid organizations in streamlining their IT infrastructure and enhancing operational efficiency.
The service type segment is further classified into security services, network services, data center & IT infra-services, communication & collaboration services, mobility services, and information services. Among these, the security services sub-segment accounted for the highest market share in 2021. A managed security service includes outsourced management and monitoring of security systems and devices. Managed Security Service Providers (MSSPs) are third-party organizations that offer business security services. There are services like intrusion detection, vulnerability scanning, managed firewalls, anti-viral services, and others. MSSP uses high-availability security operation centers to provide 24-hour-a-day services in order to reduce the number of operational security experts that an organization must acquire, train, and retain in order to maintain an acceptable security posture.
The industry vertical segment is further classified into telecom, IT, BFSI, consumer goods & retail, manufacturing, healthcare, education, energy & utilities, media & entertainment, and others. Among these, the BFSI sub-segment accounted for the highest market share in 2021. As IT infrastructure becomes more complex, banks are finding it difficult to monitor and maintain their systems. Businesses employ managed service providers (MSPs) to provide a variety of services such as network monitoring, data backup, security management, and help desk support. MSPs assist banks in enhancing their skills and business operations. Furthermore, MSPs allow banks to fulfil their objectives by reducing in-house IT costs, restructuring IT systems, and automating business operations.
The managed services market in North America accounted for the highest market share in 2021, owing to the requirement for specialized knowledge to handle IT systems and their growing complexity. Businesses' reliance on technology increases along with the complexity of their IT infrastructure, which makes internal administration challenging and costly. Managed service providers provide specialized skills in fields like data analytics, cloud computing, and cybersecurity that may help organizations manage their IT systems more effectively and save money. In North America, demand for adaptable and scalable IT solutions is rising. Managed service providers provide a variety of solutions that may be tailored to fit the particular requirements of different organizations, enabling them to scale up or down as necessary and respond to shifting market conditions. Businesses may become more agile and responsive to shifting market conditions by enhancing their IT infrastructure and business operations with the aid of managed service providers.
Key Players in the Global Managed Services Market
Some of the leading managed services market players are
- Dimension Data
In March 2022, Oracle Cloud Infrastructure (OCI), a cloud infrastructure service of Oracle, released 11 new networking, computing, and storage services and capabilities that enable customers to run workloads more quickly, securely, and affordably.