Managed Services Market Size, Share & Trends Analysis Report By Solution, By Managed Information Service (MIS), By Deployment, By Enterprise Size, By End Use, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global managed services market size was valued at USD 239.71 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 13.4% from 2022 to 2030. The outbreak of the COVID-19 pandemic, which has triggered the need for business automation as businesses aggressively resort to remote working, can be attributed to the growth. According to an IDG report commissioned by NTT Ltd., nearly 55% of companies are approaching managed service providers to opt for their value-added services and reduce security risks, which have multiplied since the pandemic's outbreak as employees work remotely and business partners and customers rely entirely on electronic communication. These trends are expected to create enormous growth opportunities for managed service providers in the short and long term.

Managed services help businesses improve operational efficiency and reduce operating expenses while allowing them to focus more effectively on core competencies. Managed services ensure optimal resource distribution and utilization and subsequently help in augmenting the overall profitability and improving operational efficiency. Scalable infrastructure and flexible managed services models are particularly making it easier for businesses to respond to technological advances. All such factors are expected to drive the market's growth over the forecast period.

Managed services involve outsourcing management functions to a third party to advance business operations. The introduction of cloud-based technologies and their technological proliferation have led to managed services. Managed services assist businesses in improving operational efficiency and cutting down companies' operating expenses. The growing preference for outsourcing management functions to cloud service providers and managed service providers is anticipated to drive the growth of the market over the forecast period.

The outbreak of the COVID-19 pandemic is particularly prompting businesses to put a strong emphasis on remote working. The adoption of cloud services has particularly increased as businesses remain keen on ensuring business continuity during the lockdowns imposed by various governments as part of the efforts to contain the spread of coronavirus. Most companies are already renewing their contracts with managed cloud service providers in anticipation of cloud migration getting more common among enterprises, and in some cases, even gaining traction. Furthermore, businesses and organizations were putting a strong emphasis on adopting the latest technologies, such as machine learning and augmented reality, along with their existing IT infrastructure as part of the efforts to encourage digital transformation.

Adoption of the latest technologies such as Artificial Intelligence (AI), cloud management, and others is eventually helping organizations meet various functional business requirements while driving business process optimization. Managed services deliver effective functionalities at minimal costs without compromising on quality. Additionally, managed services also support and ensure the reliability and consistency of services offered for various business processes.

However, a lurking lack of knowledge and experience in integrating new technologies and implementing managed services is expected to limit the managed services market's growth over the forecast period. Other factors, such as concerns about the efficacy of managed services models, concerns about data security and privacy protection, and the need for skilled resources, among others, are expected to limit market growth to some extent.

Solution Insights

The managed data center segment accounted for the largest market share of over 16% in 2021. The managed data center segment is expected to witness growth due to the continued integration of cutting-edge technology into existing and new corporate infrastructures. Managed data center services might help optimize corporate operations by boosting business automation and strengthening business management in a hybrid IT architecture.

The usage of managed security services in end-use sectors is anticipated to rise as the number of cyber-attacks rises. Managed security services are commonly used in business operations to protect confidential data. Growing network complexities are posing severe impediments to effective data security management, necessitating the need for and adoption of managed security services. It helps enterprises not only detect and mitigate risks through security assessments but also automate compliance monitoring, thus, increase in demand.

Also, endpoint management solutions are available through managed IT services, managing endpoint environments, protecting remote workers, automating provisioning and compliance, and offering complete endpoint troubleshooting. Organizations are adopting proactive IT security strategies to safeguard their businesses and secure individual digital identities and services/devices to be more agile, adaptable, and cooperative in their efforts to secure their key assets.

Managed Information Service (MIS) Insights

The Business Process Outsourcing (BPO) segment accounted for the largest revenue share of the managed services market exceeding 40% in 2021. The growing need for incorporating BPO as part of a business strategy to focus on core strengths and boost profitability is expected to fuel the growth of the BPO segment over the forecast period. The use of BPO services is projected to be driven by several factors, including a focus on process automation, social media management tools, and investments in cloud computing.

Various industries are integrating analytics with project and portfolio management, as it enhances the decision-making capabilities of organizations. These services are extensively utilized by project managers due to several advantages, such as improved capacity planning and resource management, increased productivity, and increased agility. This is expected to drive the growth of the segment. The usage of robotic process automation, AI, and the changing nature of work are some of the developing trends anticipated to drive growth. Agile approaches are becoming more popular, especially when analyzing the user or customer experience and continuously enhancing the product.

Deployment Insights

The on-premise segment accounted for the largest market share of over 64% in 2021. Numerous organizations have adopted the on-premise mode of deployment as it does not require an internet connection and allows easy customization of software to suit the business process requirements of clients. The on-premise implementation also aids in increasing operational efficiency and establishing a control center within an organization for efficiently coordinating and controlling various project management duties and business operations.

Due to technological developments and other benefits such as cost-effectiveness and minimal operational costs, the hosted deployment segment is expected to be the fastest-growing category. The main advantage of this deployment strategy is that enterprises that use hosted services do not have to upgrade them regularly. The service providers can upgrade the system software and services as needed. Manufacturers are expected to use a hosted managed services (HMS) based deployment approach to regain control of rising IT and licensing expenses while relieving IT workers from spending their time on upgrades and system updates rather than supporting new business.

Enterprise Size Insights

The large enterprises' segment accounted for the largest market share of over 60% in 2021. Large businesses deal with large amounts of data that must be successfully maintained and accessible locally and remotely. Furthermore, large organizations are increasingly turning to managed security services to keep and monitor their corporate data security. Due to increasing cyberattacks and less developed infrastructures to detect breaches, managed security services are the most requested service by businesses across the region. A cyberattack or data breach at a large corporation in APAC might result in a considerable loss. The key verticals contributing to the managed services market in the region are retail and consumer goods, healthcare, manufacturing, and telecom & IT.

Increasing government through different types, including loans, tax reliefs, social support, and financial support, focused on encouraging and promoting SMEs and various digital SMEs campaigns worldwide, is expected to fuel the SME segment’s growth. Other factors expected to boost segment expansion during the projected period include SMEs' increasing adoption of modern information technology infrastructure and business operations automation. Cloud computing, automation, and virtualization have combined to develop a delivery platform that provides managed services to small businesses much more cost-effectively and efficiently. In a cloud brokerage model, managed service providers (MSPs) have partnered with cloud service providers (CSPs) and effectively function as resellers. Smaller firms are likely to increase their IT spending, benefiting managed service providers, especially as they move to automated services, cloud, and experiment with innovative digital technologies.

End-use Insights

The financial services segment accounted for the largest revenue share of over 19% in 2021. Financial institutions are turning to managed services to address various issues, including keeping up with technological advancements, market and regulatory changes, and a looming shortage of employees with experience in cutting-edge technologies, among others. In the long run, the managed services model often aids in the management of company processes and operations while boosting operational efficiency and product quality. Managed services are becoming increasingly popular as businesses seek a more strategic approach to operate, organize, and protect their operations effectively. A managed services partnership's long-term, tightly integrated structure provides significant strategic benefits in addition to cost savings. The bank can expand its domicile and investment coverage and volume without investing more money by using a scalable, worldwide third-party delivery infrastructure on a pay-per-use basis.

Retailers who use managed services can automate their business operations, focusing on their core activities. Some examples of retail managed services include retail asset management, retail help desk, and remote monitoring and management services. A managed service provider can give the knowledge and assistance needed to efficiently manage and maintain the IT network of the retail and consumer goods industry. Rapidly growing retailers frequently overlook the infrastructure required to support their expansion. Hence, the usage of retail managed services providers allows the company to be more flexible during times of growth.

Regional Insights

North America dominated the global market in 2021 with a revenue share of over 32%. Due to the significant emphasis on digitalization, IT firms in the U.S. are lowering operational expenses, particularly in the wake of the pandemic; they are adopting a variety of managed services to improve operational efficiency. Businesses in the U.S. depend more on managed service providers (MSPs), primarily for IT support services, to stay competitive in the face of continued digitization.

The Asia Pacific regional market is expected to witness a significant CAGR over the projected period. Several firms in the Asia Pacific region are predicted to substantially contribute to the market's growth throughout the forecast period by implementing cloud-based solutions and boosting data security investments. Furthermore, rising spending due to organizations’ adoption of cutting-edge technologies such as cloud-based technology and advanced technology for company development is expected to contribute to market growth.

Key Companies & Market Share Insights

The major market players focus on mergers & acquisitions, joint ventures, and strategic partnerships to defend and expand their respective market shares. The players are also collaborating and acquiring other organizations looking forward to automating, digitalizing, and streamlining their business processes to gain a competitive edge. For instance, in July 2021, Accenture acquired Cloudworks, an Oracle Cloud implementation services provider in North America. The acquisition would help the former company expand its reach in Canada by providing Oracle solutions to the client.

Market players are mainly investing in new product development and product portfolio expansion while engaging in R&D activities to offer cost-effective and reliable managed services solutions. They are also focusing on enhancing cloud services to support the digital transformation of the incumbents of various end-use industries. For instance, in November 2019, DXC Technology Company launched a new cloud solution named DXC Managed Multi-Cloud Services. The new solution is powered by VMware, which provides consistent service management and enables users to maximize investments in VMware to take a multi-cloud competitive advantage. Some of the prominent players operating in the global managed services market are:

• Accenture PLC

• Alcatel-Lucent Enterprise

• AT&T Inc.

• Avaya Inc.

• BMC Software, Inc.

• CA Technologies

• Cisco Systems, Inc.

• DXC Technology Company

• Ericsson

• Fujitsu Limited

• Hewlett Packard Enterprise Development LP

• International Business Machines Corporation

• Lenovo Group Limited

Managed Services Market 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 2017 to 2030. 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, 2017 - 2030)

  • 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, 2017 - 2030)

  • Business Process Outsourcing (BPO)

  • Business Support Systems

  • Project & Portfolio Management

  • Others

• Deployment Outlook (Revenue, USD Billion, 2017 - 2030)

  • On-premise

  • Hosted

• Enterprise Size Outlook (Revenue, USD Billion, 2017 - 2030)

  • Small & Medium Enterprises (SMEs)

  • Large Enterprises

• End-use Outlook (Revenue, USD Billion, 2017 - 2030)

  • Financial Services

  • Government

  • Healthcare

  • IT & Telecom

  • Manufacturing

  • Media & Entertainment

  • Retail

  • Others

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

  • Middle East & Africa (MEA)