The global managed services market size was valued at USD 174.98 billion in 2018 and is expected to register a CAGR of 11.7% from 2019 to 2025. Advancements in cloud-based technologies and technological proliferation, in general, is anticipated to fuel the growth. Banks and other financial institutions are turning to managed services to address various concerns such as market and regulatory change, technological change, and talent scarcity, among others. The managed services model helps run business processes and operations to improve operational efficiency and quality on a long-term basis.
Increasing demand for outsourcing management functions from the cloud and Managed Service Providers (MSPs) is anticipated to further drive the adoption. Additionally, rising security concerns coupled with application in handling the IT functions by taking control over the networks and IT infrastructure of enterprises is expected to positively influence the growth. The long-term, integrated nature of managed service partnerships provide substantial strategic benefits in addition to cost reduction.
Managed services help improve operational efficiency, reduce operating expenses, and help businesses focus on core competencies. They assist in optimal resource distribution and utilization to augment the overall profitability and operational efficiency. Technological advancements such as big data, cloud computing, and mobility services are also expected to drive the market growth. Scalable infrastructure and flexible managed services models are making it easier for businesses to respond to technological change.
Improving profit margins and effectively meeting the needs of the changing business environment is expected to spur the market growth over the forecast period. Leading market players constantly engage in upgrading and customizing their services to sustain the competition, which in turn, is projected to offer new opportunities for market expansion. They also focus on offering advisory expert services to solve complex business problems. Managed Service Providers (MSPs) help businesses define their business strategies by keeping some factors in scope, such as the available sources, customer requirements, and market needs, among others. This, in turn, is expected to create growth opportunities for the MSPs over the forecast period.
However, concerns regarding the lack of expertise in advanced technologies such as cloud-based technology among market players are expected to hinder the growth. Also, numerous factors such as lack of efficacy of the managed service model, need for skilled manpower, need for high initial investment, and privacy and security concerns are projected to challenge the growth. Also, concerns of organizations to entrust business processes and operations on MSPs are further expected to act as a challenge to the market.
The managed mobility segment was valued at USD 12.62 billion in 2018 and is expected to generate significant revenue over the forecast period. The demand for Bring Your Own Device (BYOD) is significantly increasing as it drives productivity and accountability of employees; thereby driving the adoption of these mobility solutions. The BYOD trend enables the workforce to access business information from their devices. The rising penetration of mobile devices worldwide coupled with the introduction of corporate database apps is expected to drive the segment growth over the forecast period.
Increasing instances of cyberattacks are expected to drive the adoption of managed security services in end-use industries. These services are widely adopted in enterprise operations as a measure to secure confidential data. Growing complexities in network infrastructure are acting as major impedances inefficient data security management; thereby driving the adoption. By outsourcing, businesses can cut down the operational cost by eliminating the need to maintain full-time, fully staffed, and on-site IT security department.
Development of Business Process as a Service (BPaaS) is expected to drive the growth of the Business Process Outsourcing (BPO) service segment over the forecast period. Numerous companies are incorporating BPO as a part of their business strategy; as it allows them to focus on their core competencies. Also, it helps businesses increase the revenue, lower the operational costs, and improve the product and service quality. This is expected to drive the adoption of the BPO services segment in end-use industries over the forecast period.
Various industries are integrating business analytics solutions with project and portfolio management, as it enhances the decision-making capabilities of organizations. The project and portfolio management model helps businesses determine the current Project Portfolio Management (PPM) capability and identify the process gap between the current and the probable future state of the organization. Project and portfolio management provides real-time information about the administrative, engineering, and manufacturing projects. The rising need for effective cost management is expected to drive the adoption of project and portfolio management services over the forecast period.
On-premise deployment is anticipated to remain the most widely adopted method of deploying managed services. This method permits large-scale customization of products and services while offering infrastructure flexibility. Besides, it helps improve cost-efficiency in terms of the total cost of ownership and setting up a control center in the organizations for coordinating and managing various project management and business operations tasks. On-premise deployment offers business control over their data and provides a sense of ownership compared to hosted deployment.
Hosted deployment is projected to be the fastest-growing segment. Enterprises prefer this deployment method owing to technological advancements and various advantages it offers such as low operational cost and easy upgrades. Organizations using hosted services do not require constant upgrades, which gives them an added advantage. The MSPs can upgrade the system software and services as and when required. Hosted deployment enables the ability to control, manage, and monitor large and complex systems.
Small and Medium Enterprises (SMEs) are anticipated to emerge as the fastest-growing segment over the forecast period. The number of SMEs operating in emerging economies such as China, India, and Japan is on the rise. These SMEs are increasingly implementing managed services and solutions to optimize their business capabilities as they offer data security and scalability. This is expected to drive the adoption among SMEs over the forecast period.
Increasing government initiatives aimed at encouraging and promoting SMEs and various digital SMEs campaigns across the world are expected to further drive the growth of this segment. Growing implementation of advanced information technology infrastructure by SMEs and automation of enterprise processes are other factors projected to drive the segment growth over the forecast period.
The IT and telecom segment held a significant market share and was valued at USD 30.03 billion in 2018. The growth of the IT and telecom industry and the integration of big data and machine learning into professional services is expected to drive the adoption over the forecast period. Managed services are widely used in the telecom industry to manage Wide Area Network (WAN) connectivity equipment and circuit trouble tickets, and monitoring site connectivity and bandwidth and traffic utilization. Wide adoption in the IT and telecom industry owing to the increasing need for data center functions to be integrated with business operations boost operational efficiency is anticipated to bode well for the growth.
Adoption of managed services by retailers enables them to implement automation in their business operations, which allows them to focus on core tasks. Retail managed services include retail asset management, retail help desk, and remote monitoring and management services, to enumerate a few. A regularly organized and maintained point of sales endpoints, servers, and networks help eliminate security threats. This, in turn, is expected to propel the managed services adoption in the retail industry.
North America led the global market in terms of revenue with market size of USD 58.38 billion in 2018. The growth can be attributed to the concentration of a considerable number of MSPs in the region. The regional market is considered progressive in terms of willingness to adopt new and emerging technologies.
The Asia Pacific is estimated to witness substantial growth over the forecast period. The implementation of cloud-based solutions and increasing investments in data security among several companies in the region is expected to notably contribute to the growth. Furthermore, increasing expenditure due to the implementation of the latest technologies such as cloud-based technology for their business development is also predicted to contribute to the growth. Increasing investment in SMEs by developing economies such as China and India is expected to further propel the managed services market growth.
Accenture PLC; Fujitsu Limited; IBM Corporation; Cisco Systems, Inc.; Ericsson; Lenovo Group Limited; DXC Technology Company; and Hewlett Packard Enterprise Development LP are some of the leading incumbents of the market. In May 2018, Fujitsu Limited expanded its Fujitsu Security Solution Global Managed Security Service which defends systems from cyberattacks. Through this, the company provides centralized lifecycle support from system restoration to cyberattack prediction. The company also launched the Global On-Site Operations platform across various countries to provide MIS to the end-use industries.
Key market players are focusing on strategic partnerships and acquisitions to maintain and expand their market shares. Moreover, these players collaborate with other organizations willing to automate and streamline their business processes by digitalization for gaining a competitive edge. The market players also invest in new product development, engage in research and development activities, and product portfolio expansion to offer cost-effective and reliable solutions. Various companies are focusing on enhancing their cloud service portfolio to support the digital transformation of end-use industries.
Report Attribute |
Details |
Market size value in 2020 |
USD 214.7 billion |
Revenue forecast in 2025 |
USD 376.1 billion |
Growth Rate |
CAGR of 11.7% from 2019 to 2025 |
Base year for estimation |
2018 |
Historical data |
2014 - 2018 |
Forecast period |
2019 - 2025 |
Quantitative units |
Revenue in USD billion and CAGR from 2019 to 2025 |
Report coverage |
Revenue forecast, company share, competitive landscape, growth factors and trends |
Segments covered |
Solution, Managed Information Service (MIS), deployment, enterprise size, end-use, region |
Regional scope |
North America; Europe; Asia Pacific; Latin America; Middle East & Africa |
Country scope |
U.S.; Canada; Germany; U.K.; China; India; Japan; Brazil |
Key companies profiled |
Accenture PLC; Fujitsu Limited; IBM Corporation; Cisco Systems, Inc.; Ericsson; Lenovo Group Limited; DXC Technology Company; Hewlett Packard Enterprise Development LP. |
Customization scope |
Free report customization (equivalent up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope. |
Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For this study, Grand View Research has segmented the global managed services market report based on solution, Managed Information Service (MIS), deployment, enterprise size, end-use, and region:
Solution Outlook (Revenue, USD Billion, 2014 - 2025)
Managed Data Center
Managed Network
Managed Mobility
Managed Infrastructure
Managed Backup and Recovery
Managed Communication
Managed Information
Managed Security
Managed Information Service (MIS) Outlook (Revenue, USD Billion, 2014 - 2025)
Business Process Outsourcing (BPO)
Business Support Systems
Project & Portfolio Management
Others
Deployment Outlook (Revenue, USD Billion, 2014 - 2025)
On-premise
Hosted
Enterprise Size Outlook (Revenue, USD Billion, 2014 - 2025)
Small & Medium Enterprises (SMEs)
Large Enterprises
End-Use Outlook (Revenue, USD Billion, 2014 - 2025)
Financial Services
Government
Healthcare
IT & Telecom
Manufacturing
Media & Entertainment
Retail
Others
Regional Outlook (Revenue, USD Billion, 2014 - 2025)
North America
The U.S.
Canada
Europe
U.K.
Germany
Asia Pacific
China
India
Japan
Latin America
Brazil
Middle East & Africa (MEA)
b. The global managed services market size was estimated at USD 193.6 billion in 2019 and is expected to reach USD 214.7 billion in 2020.
b. The global managed services market is expected to grow at a compound annual growth rate of 11.9% from 2020 to 2025 to reach USD 376.1 billion by 2025.
b. North America dominated the managed services market with a share of 33.2% in 2019. This is attributable to the concentration of a considerable number of MSPs in the region.
b. Some key players operating in the managed services market include Accenture PLC; Fujitsu Limited; IBM Corporation; Cisco Systems, Inc.; Ericsson; Lenovo Group Limited; DXC Technology Company; and Hewlett Packard Enterprise Development LP.
b. Key factors that are driving the managed services market growth include increasing dependence on IT operations and new applications to improve business productivity and the need for specialized MSPs to manage complex IT infrastructure and reduce IT staffing costs.
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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.