Managed Services Market Size, Share & Trends Analysis Report By Solution (Managed Mobility, Managed Security), By MIS, By Deployment, By Enterprise Size, By End Use, By Region, And Segment Forecasts, 2019 - 2025

Industry Insights

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 expertise 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 is further expected to act as a challenge to the market.

Solution Insights

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 workforce to access business information from their personal devices. 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 is 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 the confidential data. Growing complexities in network infrastructure are acting as major impedances in efficient data security management; thereby driving the adoption. By outsourcing, businesses are able to cut down the operational cost by eliminating the need to maintain full-time, fully staffed, and on-site IT security department.

Managed Information Service (MIS) Insights

Development of Business Process as a Service (BPaaS) is expected to drive the growth of 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 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. Rising need for effective cost management is expected to drive the adoption of project and portfolio management services over the forecast period.

Deployment Insights

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. In addition, it helps improve cost efficiency in terms of 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.

Enterprise Size Insights

Small and Medium Enterprises (SMEs) is 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.

End Use Insights

The IT and telecom segment held a significant market share and was valued at USD 30.03 billionin 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 for the purpose of managing Wide Area Network (WAN) connectivity equipment and circuit trouble tickets, and monitoring site connectivity and bandwidth and traffic utilization. Wide adoption in 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.

Regional Insights

North America led the global market in terms of revenue with a 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 as progressive in terms of willingness to adopt new and emerging technologies.

Asia Pacific is estimated to witness substantial growth over the forecast period. 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 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.

Managed Services Market Share Insights

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 their 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 Scope

Segments Covered in the Report

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 the purpose of 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

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

  • Middle East & Africa (MEA)