The global cloud managed services market size was valued at USD 23.19 billion in 2016 and is expected to increase at an expected CAGR of 15.4% over the forecast period. The growing emphasis on mobility coupled with the requirement to focus on core business functions will drive the market growth rate. Also, increasing demand for scalability and reliability will further elevate the demand for the services as it will enable enterprises to scaling-up and down their operations by offering custom-made offerings to the available services.
Enterprises are more concerned with IT costs reduction which will fuel the demand in the future. Services being offered on the pay-as-you-go model, where enterprises are charged as per their use of the resources, will enable enterprises to save on costs and will provide flexibility.
There are several other benefits of cloud managed services such as enhanced IT functionality and customized IT services. The availability of robust infrastructure will remain a key concern for service providers as uninterrupted internet connectivity is required for service delivery. Simultaneous access from multiple users to the cloud might result in network congestion which can hamper the internet speed and can lead to downtime. Massive load from multiple client access on the server might result in power failure which can disrupt business operations temporarily.
Poor infrastructure and connectivity in developing regional markets such as India, Mexico, and MEA will remain the biggest challenge for the market to grow. Also, data privacy and data security over the cloud will restrain the market growth. Additionally, cost-sensitive enterprises may refrain from investing in these services owing to the initial high cost of installation and maintenance.
Vendor lock-in is another primary concern for the service providers. Signing new contracts might include substantial charges along with application reconfiguration. In such cases, platform compatibility can be another concern as applications that are developed on one platform might not be supported on other platforms.
In service type segments, the mobility services will be the segment that will increase with the highest growth rate. An increase in trends such as Bring Your Own Devices (BYOD) and mobile workforce will impel enterprises to implement services to manage both devices and data. Increasing the adoption of portable and mobile devices in enterprises will further drive the growth of this segment.
The security services segment is expected to grow at a CAGR of over 18% during the forecast period. This growth can be attributed to the adoption of cloud technologies. The data in the cloud becomes more vulnerable as the number of users with access to the cloud increases. It will drive the demand for security services.
The private cloud offers several benefits to enterprises such as increased data security and access control. This model further provides enterprises with benefits such as cost efficiency, and reliability, however, costs associated with the private cloud model are high.
Unlike the private cloud, the public cloud requires a low cost of deployment, is easy to configure and offer economies of scale to the enterprises. The market size for the public cloud segment contributed USD 15 billion in 2016 and is expected to increase with an expected CAGR of 14% over the forecast period.
Cloud managed services help enterprises to reduce IT costs. These services are offered based on the pay-as-you-go model. These services also enable enterprises to achieve economies of scale by collaborating with employees on the go. It increases enterprise capabilities regarding flexibility, communication, and reliability.
Cloud managed services have increased the operational efficiency of small- and medium-sized organizations by managing their IT infrastructure. They enable organizations to focus on their core business practices, which further enhances their productivity.
Customizations provided to organizations by the service providers are enabling them to experience flexibility. These factors are expected to drive the adoption of cloud managed services by SMEs. The segment market size was valued at USD 6 billion in 2016 and is expected to grow with a CAGR of 20% over the forecast period.
The increased adoption of cloud in the healthcare industry is driving the demand for cloud managed services. A significant amount of data has been generated due to research-related activities and healthcare operations in the recent past. The management of this data requires expertise in the cloud and hence, healthcare service providers seek cloud-managed service providers. Cloud managed services help healthcare service providers to focus on their core processes.
The retail & consumer segment is another major segment that will witness significant growth during the forecast period. The market size of the segment is expected to increase with a CAGR of over 17% during the forecast period. Tailor-made offerings from service providers enable retailers to scale-up and down business operations.
North America held the largest market share in 2016 and is expected to witness significant growth over the forecast period, owing to the presence of technology giants such as IBM, Google, Cisco Systems and Verizon Communications. Initiatives by the federal government are increasing the adoption of cloud managed services. In Europe, several governments are working with various organizations and other countries to increase cloud adoption. Government initiatives such as the UK government's G-Cloud framework is enabling the government to utilize cloud managed services.
The Asia Pacific is expected to be the fastest-growing region over the forecast period, owing to the growing adoption of cloud managed services by the small and medium-sized enterprises, which are expected to drive the market growth. Increasing investments by prominent players such as IBM and Google are bolstering the growth of cloud adoption and hence growth for cloud managed services market.
Cisco Systems Inc., IBM, Ericsson, Accenture PLC, Verizon Communications Inc., NTT Data Corporation, CenturyLink and Fujitsu Limited, are some of the most prominent players in the market. These players are adopting several strategies to grow in the market. Collaborations with other players, partnerships, and investments in R&D are some of the most widespread strategies.
Mergers & acquisitions and new product/service development is another major strategy being adopted by the existing players. For example, IBM acquired SoftLayer in 2013 for USD 2 billion. The acquisition helped IBM to strengthen cloud computing capabilities.
The 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
15% free customization scope (equivalent to 5 analysts working days)
If you need specific information that is not currently within the scope of the report, we will provide it to you as a part of the customization
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 report 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)
GET A FREE SAMPLE
This FREE sample includes market data points, ranging from trend analyses to market estimates & forecasts. See for yourself.
NEED A CUSTOM REPORT?
We can customize every report - free of charge - including purchasing stand-alone sections or country-level reports, as well as offer affordable discounts for start-ups & universities.
Contact us now to get our best pricing.
ESOMAR certified & member
Leading SME award by D&B
"The quality of research they have done for us has been excellent."
Artificial Intelligence (AI), Virtual Reality (VR), and Augmented Reality (AR) solutions are anticipated to substantially contribute while responding to the COVID-19 pandemic and address continuously evolving challenges. The existing situation owing to the outbreak of the epidemic will inspire pharmaceutical vendors and healthcare establishments to improve their R&D investments in AI, acting as a core technology for enabling various initiatives. The insurance industry is expected to confront the pressure associated with cost-efficiency. Usage of AI can help in reducing operating costs, and at the same time, can increase customer satisfaction during the renewal process, claims, and other services. VR/AR can assist in e-learning, for which the demand will surge owing to the closure of many schools and universities. Further, VR/AR can also prove to be a valuable solution in providing remote assistance as it can support in avoiding unnecessary travel. The report will account for Covid19 as a key market contributor.
We value your investment and offer free customization with every report to fulfil your exact research needs.