The global cloud managed services market size was valued at USD 23.19 billion in 2016 and is expected to grow at a CAGR of 15.4% over the forecast period. The growing demand for flexibility in business and the need to focus on core businesses are the primary factors driving the growth of the market. Additionally, the increased demand for scalability and reliability has further elevated the need for these services to enable organizations to scale-up and scale-down business operations by providing customization to the existing services.
Growing emphasis on reducing IT costs has also boosted the demand. As vendors catering on the pay-as-you-go basis, where the organizations have to pay as per their usage.
U.S. cloud managed services market, by type, 2014 - 2025 (USD Million)
Cloud managed services provide several benefits such as business flexibility and cost minimization. However, seamless internet connectivity is an essential requirement for cloud managed services.
Substandard connectivity, especially in developing economies, such as India, Mexico, and MEA, is one of the significant challenges faced by the market. Furthermore, concerns related to data privacy, data security, and internet connectivity might hamper the growth prospects of the market.
Service Type Insights
The mobility segment is expected to be the fastest-growing segment. The growing concept of Bring Your Own Devices (BYOD) is impelling organizations to seek services that can manage the devices and the data generated by those devices.
Increased adoption of mobile devices by organizations for advertising and marketing purposes is bolstering the growth of mobility segment. It also enables organizations to enhance the security of their connected devices. The security segment is anticipated to grow at a CAGR of 18% over the forecast period. Specialized personnel provides continuous monitoring services, which enables organizations to enhance security. Additionally, with the advent of big data, the requirement for data management and security is a major concern.
Private cloud enables improved data control and reduces the risk of loss of data. Moreover, benefits, such as cost and energy efficiency, reliability, and control, provided by the private cloud are impelling organizations to choose this deployment. Therefore, the private cloud segment was valued at estimated at approximately USD 8 billion in 2016 and will grow with a CAGR over 16% over the forecast period.
However, public cloud also offers numerous benefits such as low cost of deployment, easy configuration and economies of scale. The public cloud segment was valued at over USD 15 billion in 2016 and will grow at a CAGR over 14% over the forecast period. With the increased adoption of private and public cloud, the demand for services over public and private, for both cloud models is growing.
Cloud managed services aid organizations in reducing their IT costs by providing them services on a pay-as-you-go basis, where organizations are required to pay solely for the services utilized by them. Customizations to the existing models enable organizations to scale-up and scale-down business operations with flexibility.
Cloud managed services enable organizations to collaborate with employees and also enables them to access the data from offsite. Thus, offering enhanced communication and productivity. This improved flexibility, communication, and reliability provided by cloud managed services are resulting in increased adoption of cloud managed services by the small- and medium-sized enterprises.
Cloud managed services market, by end-user, 2016 (%)
The healthcare segment is anticipated to grow at the fastest CAGR over the forecast period. Cloud managed services enable the healthcare industry to share and transfer data related to patients. Patients can get access to their medical history, regardless of the location, by connecting to a server. The enhanced security provided by service providers enable physicians to store confidential records of their patients securely.
The retail & consumer segment is anticipated to grow at a CAGR of over 17% from 2017 to 2025. Real-time inventory tracking has enabled retailers to manage their inventory, and IT costs. Customization provided by the service provider allows, the retailer to scale up and down the operations of the business. However, this data is critical and private; hence, the demands for securely managing the information is high.
North American cloud managed services market held the most significant share in 2016. It is expected to grow with a CAGR of over 12% during the forecast period. Owing to the presence of seamless internet connectivity and established IT infrastructure. Additionally, the presence of major players such as Cisco Systems, and Verizon Communications are bolstering the market in the region.
However, the Asia Pacific and MEA regions have high growth opportunities due to investments made by companies such as IBM, Google, and Cisco. Furthermore, government initiatives are also encouraging the adoption of cloud managed services in these regions. For instance, Digital India initiative and Digital Japan Creation Project are increasing the adoption of cloud managed services in the Asia Pacific region.
The prominent industry participants operating in the market include IBM, Cisco Systems Inc, Ericsson, Verizon Communications Inc., Accenture PLC, NTT Data Corporation, Fujitsu Limited, CenturyLink, and others. The key players in the market are focusing on collaborations with other players. Companies are making massive investments in R&D to develop innovative solutions and to gain a competitive edge over others.
They have adopted mergers & acquisitions as the key strategy to gain momentum in the market. For instance, in 2013, IBM acquired SoftLayer, a cloud computing infrastructure provider, for USD 2 billion. The acquisition aimed to strengthen IBM’s cloud computing capabilities and enable its clients to integrate public and private cloud with flexibility.
Base year for estimation
Actual estimates/Historical data
2014 - 2016
2017 - 2025
Revenue in USD Million & CAGR from 2017 to 2025
North America, Europe, Asia Pacific, Latin America, and MEA
U.S., Canada, UK, Germany, India, Japan and China
Revenue forecast, company ranking, competitive landscape, growth factors, and trends
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Segments Covered in the Report
This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the industry trends in each of the sub-segments from 2016 to 2025. For this study, Grand View Research has segmented the global cloud managed services market based on types, deployments, end-users, verticals, and regions:
Service Type Outlook (Revenue, USD Million; 2014 - 2025)
Cloud Deployment Outlook (Revenue, USD Million; 2014 - 2025)
End-User Outlook (Revenue, USD Million; 2014 - 2025)
Vertical Outlook (Revenue, USD Million; 2014 - 2025)
Telecom & ITES
Government (State & Local, Federal) & Education
Retail & Consumer
Manufacturing & Automotive
Others (Media, Transportation, Food & Beverages, Oil & Gas, Real Estate)
Regional Outlook (Revenue, USD Million; 2014 - 2025)
Middle East & Africa (MEA)
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