Managed Services Market Size, Share & Trends Analysis Report By Solution (Managed Network, Managed Mobility), By Deployment, By Managed Information Services, By Enterprise Size, By End-use, By Region, and Segment Forecasts, 2023 - 2030

Report Overview

The global managed services market size was estimated at USD 267.35 billion in 2022 and is anticipated to grow at a compound annual growth rate (CAGR) of 13.6% from 2023 to 2030. Managed services reduce downtime redundancy and provide customized value-added services such as application testing, service catalog building, and expert consultancy. Multiple monitoring tools and several layers of infrastructure managed by isolated teams contribute to the market growth. Furthermore, to streamline infrastructure and reduce costs, enterprises globally are migrating to the cloud platform. Professional and managed services help enterprises complete this digital transformation faster and more efficiently.

In April 2023, Sinch, a Microsoft Operator Connect partner, announced a partnership with Synoptek to provide managed and professional services for the Microsoft Teams Phone System, which is integrated with direct routing or operator connect. Factors such as improving operational efficiency by focusing more effectively on core competencies, cutting operating expenses, and increasing use of cloud-based technologies such as automation, IoT, blockchain, and cloud computing are driving market growth.

Moreover, managed services focusing on providing secure and customized IT solutions and end-to-end hosting applications are expected to drive market growth. For instance, in November 2022, UiPath, an automation software provider, extended its partnership with Neostella, an enterprise automation software provider, to offer managed services for midmarket business segment. With this partnership, Neostella offers RPA-managed services based on customers’ specific requirements and also eliminates requirements of up-front licensing.

Managed services involve outsourcing management functions to a third party to advance business operations. 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. Moreover, an increasing preference for outsourcing management functions to cloud service providers and managed service providers is anticipated to drive the market's growth over the forecast period.

Adoption of cloud services has particularly increased as businesses remain keen on ensuring business scalability. Most companies are renewing their contracts with managed cloud service providers in anticipation of cloud migration becoming more common among enterprises and, in some cases, even gaining traction. Furthermore, businesses and organizations strongly emphasize adopting 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. In addition, managed services also support and ensure the reliability and consistency of services offered for various business processes.

As cyber threats become more prevalent, organizations are adopting managed security services (MSSs) into their business models. There is an increase in cyber threats in government sectors and enterprises. Thus, forcing managed service providers (MSPs) to develop advanced offerings that can detect and address cyber risks. For instance, in April 2023, Aeries Technology, a consulting and professional services provider, announced the launch of cyber security managed services. The new offering includes application security services; data security & privacy; identity & access management; cloud & infrastructure security; governance, risk, & compliance; security operations center services; enterprise security design & implementation; and audit & compliance certifications.

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

Market Dynamics

Enterprises are putting a strong emphasis on improving business productivity and are hence aggressively adopting new, innovative business applications based on the advances in the latest, emerging technologies, such as Internet of Things (IoT), cloud computing, Software-as-a-Service (SaaS), big data, machine learning (ML), and artificial intelligence (AI). Small-& medium-sized businesses (SMBs) are typically opting for cloud computing to enhance the security, availability, and accessibility of their business applications and data.

Adoption of new, innovative business applications is also driving the need for enterprises to establish their internal IT operations to help end users utilize business applications efficiently. IT operations are particularly tasked with determining the way organizations can manage their software and hardware efficiently. IT operations can also be tasked with monitoring and controlling all the processes related to IT services and infrastructure management. As such, IT operations typically cover various functions that can be categorized under network infrastructure, server & device management, and computer & helpdesk. Network infrastructure function covers all the functions related to external and internal communications, provisioning of remote access for authorized users, and addressing the issues related to network resource utilization, among others. The server & device management function covers the management of both storage & network infrastructure and organization-approved devices. Computer & helpdesk function covers data center & facility management, helpdesk management, and backup management, among other functions.

Solution Insights

In terms of solutions, the managed data center segment held the largest market share in 2022 of over 15%. The managed data center segment is expected to expand 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.

Applications of managed security services in end-use sectors is anticipated to rise as the number of cyberattacks rises. In addition, 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 increasing demand.

In addition, 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

In terms of MIS, the business process outsourcing (BPO) segment held the largest market share exceeding 40% in 2022. Utilizing 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. Growth 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 & portfolio management, as it enhances the decision-making capabilities of organizations. Project and portfolio management services are extensively utilized by project managers for advantages, including improved capacity planning and resource management, increased productivity, and increased agility. Moreover, usage of robotic process automation, artificial intelligence, and the changing nature of work are all new developing trends that are anticipated to grow and increase in project and portfolio management. Agile approaches are becoming more popular, especially when analyzing the user or customer experience and continuously enhancing the product.

Deployment Insights

In terms of deployment, the on-premise segment held the largest market share of over 64% in 2022. Numerous organizations have adopted 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.

Owing 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. 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 increasing 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

In terms of enterprise size, the large enterprises segment held the largest market share of over 60% in 2022. 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 maintain 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 market are retail and consumer goods, healthcare, manufacturing, and telecom & IT.

Increasing government initiatives including loans, tax reliefs, social support, and financial support, focused on encouraging and promoting SMEs and various digital SME 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 and cloud, and experiment with innovative digital technologies.

End-use Insights

In terms of end-use, the financial services segment accounted for the largest market share of over 15% in 2022. Financial institutions are turning to managed services to address various issues, including keeping abreast with technological advancements, market and regulatory changes, and a looming shortage of employees with experience in cutting-edge technologies, among others. 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 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. An MSP can give knowledge and assistance required to efficiently manage and maintain the IT network of retail and consumer goods industry. Rapidly growing retailers frequently overlook the infrastructure required to support their expansion. Hence, the usage of retail MSPs allows the company to be more flexible during times of growth.

Regional Insights

North America dominated the global market in 2022 with a market share of over 30%. Due to a significant emphasis on digitalization, IT firms in the U.S. are lowering operational expenses, particularly in the wake of the pandemic; they are adopting various managed services to improve operational efficiency. Businesses in the U.S. depend more on MSPs, primarily for IT support services, to stay competitive in face of continued digitization.

The Asia Pacific regional market is anticipated to register the fastest CAGR of 14.6% over the forecast 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

Major market players focus on mergers & acquisitions, joint ventures, and strategic partnerships to defend and expand their respective market shares. Market 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 May 2023, Alfar Capital and Walter Capital Partners completed the acquisition of MSP Corp, a managed IT service provider in Canada. The MSP Corp would merge with Groupe Access, an MSP of IT and cybersecurity solutions. The acquisition would help company to deliver cutting-edge solutions and strengthen its position in Canada.

Market players primarily invest in new product development and product portfolio expansion to provide affordable and dependable managed services solutions. They also focus on improving cloud services to support the incumbents in various end-use sectors as they undergo digital transformation. For instance, in January 2023, Rackspace Technology, a multi-cloud technology solutions provider, launched Rackspace Technology Modern Operations, a managed service for public cloud for customers across Azure, AWS, and GCP. The service will provide benefits including 24x7x365 managed support, cloud expertise, cloud resiliency, and innovation with cloud services which help the company’s customers manage complex cloud environments. Some prominent players in the global managed services market include:

• 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

Global Managed Services Market Report Segmentation

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 2018 to 2030. For this study, Grand View Research has segmented the global managed services market report based on solution, managed information services (MIS), deployment, enterprise size, end-use, and region:

• Solution Outlook (Revenue, USD Billion, 2018 - 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, 2018 - 2030)

  • Business Process Outsourcing (BPO)

  • Business Support Systems

  • Project & Portfolio Management

  • Others

• Deployment Outlook (Revenue, USD Billion, 2018 - 2030)

  • On-premise

  • Hosted

• Enterprise Size Outlook (Revenue, USD Billion, 2018 - 2030)

  • Small & Medium Enterprises (SMEs)

  • Large Enterprises

• End-use Outlook (Revenue, USD Billion, 2018 - 2030)

  • Financial Services

  • Government

  • Healthcare

  • IT & Telecom

  • Manufacturing

  • Media & Entertainment

  • Retail

  • Others

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

  • Asia Pacific

    • Japan

    • China

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa (MEA)

    • United Arab Emirates (UAE)

    • Saudi Arabia

    • South Africa