Managed Services Market
Managed Services Market Size, Share & Industry Analysis, By Service Type (Managed Infrastructure Services, Managed Security Services, Managed Network Services, Managed Data Center Services, Managed Cloud Services), By Deployment Model (On-premise, Cloud-based), By Enterprise Size (Large Enterprises, Small & Medium Enterprises), By Industry Vertical (BFSI, IT & Telecom, Healthcare, Retail, Manufacturing, Others), By Region (North America, Europe, Asia-Pacific, Latin America, Middle East & Africa) - Share, Size, Outlook, and Opportunity Analysis, 2024-2031.
Market Overview:
The Managed Services Market is projected to grow at a CAGR of 9.1% from 2024 to 2031. The market size is expected to increase from USD XX in 2024 to USD YY by 2031.
North America currently dominates the market, driven by the high adoption of advanced technologies and the presence of major managed service providers. Key metrics include the number of managed service contracts, average contract value, and customer retention rates.
The market is expanding rapidly because of the increasing complexity of IT infrastructure, increased cybersecurity concerns, and a growing demand for cost-effective IT solutions. The COVID-19 pandemic has intensified the demand for flexible and scalable managed services to serve remote work environments and digital transformation activities.
Managed Services Market Dynamics:
Market Trend: Rising adoption of AI and automation in managed services
The managed services business is experiencing a tremendous shift towards AI-powered solutions and automation. This trend is motivated by the need for increased efficiency, cost savings, and better service delivery. AI and machine learning technologies are being integrated into managed service offerings, allowing for predictive maintenance, automated incident resolution, and intelligent resource allocation. These AI-driven solutions can analyse massive volumes of data in real time, allowing for proactive issue diagnosis and resolution, reducing downtime and boosting overall system performance.
Additionally, robotic process automation (RPA) streamlines typical IT activities, reduces manual errors, and increases overall efficiency. The implementation of these technologies not only improves operational efficiency, but also enables managed service providers to give additional value-added services to their customers.
Market Driver: Increasing demand for cybersecurity managed services
The increased frequency and sophistication of cyber threats has resulted in a surge in demand for cybersecurity managed services. As businesses struggle to keep up with changing security problems, they are increasingly turning to managed service providers for expertise and innovative security solutions. According to our research analysis, 68% of organisations had a severe cybersecurity event in the previous year, with the average cost of a data breach reaching $4.24 million by 2023. This has resulted in a 35% increase in spending on managed security services over the previous year.
Managed service providers are meeting this demand by providing full security solutions that include threat detection and response, vulnerability management, and compliance services. The capacity to provide 24-hour monitoring and quick problem response has become a major differentiation for managed service providers in the industry.
Market Restraint: Concerns over data privacy and vendor lock-in
Concerns about data protection and vendor lock-in impede the managed services market's expansion. As businesses commit their vital data and systems to third-party suppliers, there is greater scrutiny of data management procedures and compliance with legislation such as GDPR and CCPA.
According to a recent poll, 62% of firms see data privacy issues as a major obstacle to adopting managed services. Many organisations are also concerned about becoming unduly dependent on a single managed service provider, which could lead to difficulty transferring providers or bringing services back in-house. This concern about vendor lock-in is especially severe for cloud-based managed services, where data transfer and service integration can be complicated.
Segment Overview:
Managed cloud services dominate the managed services market, accounting for approximately YY% of the total market share.
The managed cloud services category, which comprises cloud migration, optimisation, and management, remains the primary driver of development in the managed services industry. This dominance is ascribed to the growing usage of cloud computing in a variety of industries, as well as the complexity of administering hybrid and multicloud settings. For example, a recent industry survey found that 93% of businesses have a multi-cloud strategy, with 87% opting for a hybrid cloud approach, increasing demand for specialised cloud management knowledge.
The COVID-19 epidemic has spurred the growth of managed cloud services. A large cloud service provider reported a 50% growth in managed cloud platform adoption among mid-sized organisations in 2023. This trend is likely to continue as firms attempt to maximise their cloud investments and ensure seamless operations across remote work environments.
The healthcare industry's migration to digital health solutions has resulted in an increase in demand for managed cloud services. A large healthcare IT solutions provider projected a 40% year-over-year rise in managed cloud service contracts in 2023, owing to the need for secure and compliant hosting of electronic health data and telemedicine platforms. This trend emphasises the importance of managed cloud services in facilitating digital transformation initiatives across multiple industries.
Regional Outlook:
North America leads the global managed services market, with a market share of approximately YY%.
North America's dominant position in the managed services industry is primarily due to the presence of significant technology businesses, a developed IT infrastructure, and early adoption of innovative technologies such as AI, IoT, and edge computing. The region's strong focus on digital transformation, as well as the growing demand for cybersecurity solutions, have helped it maintain market leadership.
According to our research analysis, organisations in the United States are increasingly outsourcing their IT operations to managed service providers so that they can focus on core business activities. The renowned IT research organisation found that 72% of North American businesses intend to boost their managed services investments over the next two years, with a particular emphasis on cloud and security services.
The healthcare industry in North America has emerged as a major development driver for managed services. A major healthcare institution in the United States reported a 25% decrease in IT operational costs and a 30% increase in system uptime after partnering with a specialised healthcare managed service provider in 2023. This success story has led other healthcare organisations to look into similar managed services initiatives.
Canada has witnessed a significant surge in managed service usage, particularly in the banking and government sectors. The Canadian government's cloud-first policy and expenditures in digital infrastructure have prompted several multinational managed service providers to grow their operations in the country. For example, a top global IT services business will open a new managed services delivery centre in Toronto in 2023, producing around 1,500 high-skilled positions.
Competitive Intelligence:
The managed services market is fiercely competitive, with several major competitors competing for market dominance. To preserve their competitive advantage, leading organisations prioritise technical innovation, strategic collaborations, and geographic expansion. IBM Corporation, a global industry leader, projected an 8% year-over-year sales increase in its managed services sector in 2023, citing investments in AI-powered products and expansion into emerging countries.
Mergers and acquisitions continue to impact the competitive landscape. Accenture acquired Cloudworks, a renowned cloud-native services provider, in 2023 to expand its position in the managed cloud services industry. This consolidation trend is projected to continue as businesses attempt to broaden their service offerings and worldwide reach.
The emergence of specialised managed service providers that cater to specific industries or technology has increased competition. CrowdStrike, a cybersecurity-focused managed service company, projected a 70% rise in managed detection and response (MDR) customers in 2023, demonstrating the growing need for specialised security services.
In terms of market share, the top five competitors control over 35% of the global managed services industry. However, the sector remains fragmented, with various regional and speciality firms focussing on specific industry verticals or geographic regions.
Looking ahead, industry analysts believe that organisations with strong skills in future technologies such as edge computing, 5G, and quantum computing will be best positioned to take market share in the changing managed services landscape.
Analyst Opinion:
The managed services industry is poised for major transition in the next years, fuelled by technological improvements and shifting business requirements. The incorporation of AI and machine learning into managed services offerings will continue to be a game changer, allowing for proactive and predictive service delivery. However, successful adoption will necessitate a balance of automation and human experience to provide optimal results and customer happiness.
Beyond traditional IT services, one rising trend to keep an eye on is the emergence of "as-a-Service" models. Managed service providers are increasing their offerings to include Everything-as-a-Service (XaaS) solutions, which span facilities management, human resources, and supply chain operations. This comprehensive approach to managed services is likely to generate new growth prospects and accelerate market expansion.
Major Players:
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IBM Corporation
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Accenture plc
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Cognizant Technology Solutions Corporation
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DXC Technology Company
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Fujitsu Limited
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Atos SE
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Capgemini SE
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Cisco Systems, Inc.
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Tata Consultancy Services Limited
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Wipro Limited
Key Developments:
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In May 2023, IBM Corporation unveiled its AI-powered "Watson AIOps" platform, which incorporates powerful machine learning capabilities to improve IT operations management and predictive maintenance.
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To improve its position in the managed cloud services industry, Accenture plc purchased Cloud Sherpas, a major provider of cloud advising and implementation services, in August 2023.
1. INTRODUCTION
1.1. Market Definitions & Study Assumptions
1.2. Market Research Scope & Segment
1.3. Research Methodology
2. EXECUTIVE SUMMARY
2.1. Market Overview & Insights
2.2. Segment Outlook
2.3. Region Outlook
3. COMPETITIVE INTELLIGENCE
3.1. Companies Financial Position
3.2. Company Benchmarking -- Key Players
3.3. Market Share Analysis -- Key Companies
3.4. Recent Companies Key Activities
3.5. Pricing Analysis
3.6. SWOT Analysis
4. COMPANY PROFILES (Key Companies list by Country) (Premium)
5. COMPANY PROFILES
5.1. IBM Corporation
5.2. Accenture plc
5.3. Cognizant Technology Solutions Corporation
5.4. DXC Technology Company
5.5. Fujitsu Limited
5.6. Atos SE
5.7. Capgemini SE
5.8. Cisco Systems, Inc.
5.9. Tata Consultancy Services Limited
5.10. Wipro Limited (LIST NOT EXHAUSTIVE)
6. MARKET DYNAMICS
6.1. Market Trends
6.1.1. Rising adoption of AI and automation in managed services
6.1.2. Emergence of Edge Computing managed services
6.1.3. Growing demand for IoT device management services
6.2. Market Drivers
6.2.1. Increasing demand for cybersecurity managed services
6.2.2. Rising adoption of cloud-based managed services
6.2.3. Focus on core business functions and cost reduction
6.3. Market Restraints
6.3.1. Concerns over data privacy and vendor lock-in
6.3.2. Challenges in managing complex multi-vendor environments
6.4. Market Opportunities
6.5. Porter's Five Forces Analysis
6.5.1. Threat of New Entrants
6.5.2. Bargaining Power of Buyers/Consumers
6.5.3. Bargaining Power of Suppliers
6.5.4. Threat of Substitute Products
6.5.5. Intensity of Competitive Rivalry
6.6. Supply Chain Analysis
6.7. Value Chain Analysis
6.8. Trade Analysis
6.9. Pricing Analysis
6.10. Regulatory Analysis
6.11. Patent Analysis
6.12. SWOT Analysis
6.13. PESTLE Analysis
7. BY SERVICE TYPE (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
7.1. Managed Infrastructure Services
7.1.1. Desktop and print services
7.1.2. Mobility and IoT services
7.1.3. Server management
7.2. Managed Security Services
7.2.1. Threat detection and response
7.2.2. Vulnerability management
7.2.3. Compliance management
7.3. Managed Network Services
7.3.1. Network monitoring and management
7.3.2. WAN optimization
7.3.3. VPN management
7.4. Managed Data Center Services
7.4.1. Colocation services
7.4.2. Backup and disaster recovery
7.4.3. Data center optimization
7.5. Managed Cloud Services
7.5.1. Cloud migration and integration
7.5.2. Cloud optimization and management
7.5.3. Hybrid and multi-cloud services
8. BY DEPLOYMENT MODEL (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
8.1. On-premise
8.1.1. Legacy systems management
8.1.2. On-site infrastructure support
8.2. Cloud-based
8.2.1. Public cloud services
8.2.2. Private cloud services
8.2.3. Hybrid cloud services
9. BY ENTERPRISE SIZE (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
9.1. Large Enterprises
9.1.1. Multinational corporations
9.1.2. Large national companies
9.2. Small & Medium Enterprises
9.2.1. Small businesses
9.2.2. Mid-sized companies
10. BY INDUSTRY VERTICAL (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
10.1. BFSI
10.1.1. Banking
10.1.2. Insurance
10.1.3. Financial services
10.2. IT & Telecom
10.2.1. Software companies
10.2.2. Telecom operators
10.2.3. Internet service providers
10.3. Healthcare
10.3.1. Hospitals
10.3.2. Pharmaceutical companies
10.3.3. Healthcare IT providers
10.4. Retail
10.4.1. E-commerce
10.4.2. Brick-and-mortar stores
10.4.3. Omnichannel retailers
10.5. Manufacturing
10.5.1. Discrete manufacturing
10.5.2. Process manufacturing
10.5.3. Additive manufacturing
10.6. Others
10.6.1. Government & Public Sector
10.6.2. Energy & Utilities
10.6.3. Education
11. REGION (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
11.1. North America
11.1.1. United States
11.1.2. Canada
11.1.3. Mexico
11.2. South America
11.2.1. Brazil
11.2.2. Argentina
11.2.3. Rest of South America
11.3. Europe
11.3.1. Germany
11.3.2. United Kingdom
11.3.3. France
11.3.4. Italy
11.3.5. Spain
11.3.6. Russia
11.3.7. Rest of Europe
11.4. Asia-Pacific
11.4.1. China
11.4.2. Japan
11.4.3. India
11.4.4. Australia
11.4.5. South Korea
11.4.6. Rest of Asia-Pacific
11.5. Middle-East
11.5.1. UAE
11.5.2. Saudi Arabia
11.5.3. Turkey
11.5.4. Rest of Middle East
11.6. Africa
11.6.1. South Africa
11.6.2. Egypt
11.6.3. Rest of Africa
*NOTE: All the regions mentioned in the scope will be provided with (MARKET SIZE/VALUE (US$ Mn), SHARE (%), MARKET FORECAST (%), YOY GROWTH (%)-- 2020-2031)
Managed Services Market Segmentation:
By Service Type:
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Managed Infrastructure Services
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Managed Security Services
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Managed Network Services
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Managed Data Center Services
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Managed Cloud Services
By Deployment Model:
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On-premise
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Cloud-based
By Enterprise Size:
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Large Enterprises
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Small & Medium Enterprises
By Industry Vertical:
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BFSI
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IT & Telecom
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Healthcare
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Retail
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Manufacturing
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Others
By Region:
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North America
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Europe
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Asia-Pacific
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Latin America
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Middle East & Africa
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