Cloud Managed Services Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, China, Germany, Japan, UK - Size and Forecast 2024-2028

Cloud Managed Services Market Size 2024-2028 

The cloud managed services market size is estimated to grow by USD 41.5 billion at a CAGR of 8.5% between 2023 and 2028. The technology landscape is witnessing a significant shift towards cloud computing and as-a-service models. This trend is driven by several factors, including the rising adoption of cloud computing services, increasing IT spending by companies, and the growth in anything-as-a-service technologies. Cloud computing offers numerous benefits, such as cost savings, scalability, and flexibility, making it an attractive option for businesses of all sizes. Furthermore, the emergence of various as-a-service offerings, such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS), has made it easier for organizations to adopt cloud technologies and focus on their core competencies. With these trends continuing to gain momentum, the future of technology is undeniably cloud-first and as-a-service.

What will be the Size of the Market During the Forecast Period?

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Market Dynamic and Customer Landscape

Cloud Managed Services refer to IT services provided by third-party Managed Service Providers (MSPs) for managing and maintaining cloud-based applications and infrastructure. These services enable enterprises to focus on their core business functions while outsourcing IT operations. Cloud Managed Services include network services, security services, business process services, storage services, and managed IT infrastructure for cloud platforms. SMEs are increasingly adopting Cloud Managed Services due to the benefits of scalability, reliability, and cost reduction. ITeS sectors like VoIP and Unified Communications as a Service (UCaaS) are major contributors to the Cloud Managed Services market. The advent of 5G and mobility is further driving the market growth. Cloud-managed services for IT infrastructure include managed network operations and managed security operations. Cloud-based apps and cloud-managed services are becoming increasingly popular, reducing the need for CAPEX investments. However, there are concerns regarding vendor lock-in and security risks associated with cloud-managed services. The Cloud Managed Services market is expected to grow significantly due to the increasing adoption of cloud platforms and the need for cost savings and improved efficiency. Network services, security services, and business process services are expected to be the major revenue generators in the market. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The rising adoption of cloud computing services is notably driving market growth. Cloud managed services have become increasingly popular among large enterprises as they offer centralized administration and control over various IT resources, including SaaS applications, sales platforms, office productivity suites like Google Suites, and IT system management tools. These services enable users to access applications and services without the need for additional software installation or infrastructure maintenance. Managed Service Providers (MSPs) offer vendor-managed infrastructure and SLAs, ensuring reliable delivery, management, and maintenance of IT services. Cloud computing eliminates the burden of managing and updating IT infrastructure for organizations, allowing them to focus on core business activities. The adoption of cloud-based managed services is particularly beneficial for managing IT applications in sectors such as accounting, finance, virtualization, networks, endpoints, and security solutions. While cloud computing offers numerous advantages, it also presents potential threats, and MSPs provide essential security solutions to mitigate these risks. The cost savings associated with cloud-based managed services have made them an attractive option for organizations worldwide. With the increasing popularity of multi-cloud environments, MSPs offer flexible solutions that cater to various cloud platforms, including Amazon Web Services (AWS) and others. By outsourcing IT infrastructure management to MSPs, organizations can reduce their IT costs, improve operational efficiency, and focus on their core competencies. Thus, such factors are driving the growth of the market during the forecast period.

Significant Market Trends

The increased adoption of BYOD policy is the key trend in the market. The market is witnessing significant growth due to the increasing adoption of managed infrastructure services among large size enterprises. With the proliferation of Software as a Service (SaaS) applications, sales platforms, office productivity suites like Google Suites, and the need for IT system management, Managed Service Providers (MSPs) have become indispensable. These MSPs offer security solutions to mitigate potential threats, ensuring the protection of critical IT applications such as accounting, finance, virtualization, networks, endpoints, and workloads on Amazon Web Services (AWS) and other cloud platforms. The implementation of Bring Your Own Device (BYOD) policies in enterprises has led to an increase in the number of mobile devices and operating systems, necessitating robust IT management and security. The focus is on delivering secure and productive work environments, enabling employees to use their preferred devices without compromising on security or productivity. Thus, such trends will shape the growth of the market during the forecast period.

Major Market Challenge

The data privacy and security risk in cloud-based services is the major challenge that affects the growth of the market. These services have gained significant traction among businesses of all sizes, offering benefits such as cost savings, flexibility, and scalability. However, the adoption of cloud-based managed services, particularly in the public cloud, is not without challenges. Data privacy and security are major concerns for organizations, as cloud-based infrastructure is susceptible to potential threats. Cloud security management is a complex task for Managed Service Providers (MSPs), as they must ensure the protection of online data in a cloud-based IT infrastructure. The open-source codebase of cloud infrastructure can introduce vulnerabilities, and public clouds, with their multi-tenant architecture, are more prone to such risks. Cyber-attackers can easily breach cloud-based data storage systems due to the open architecture and shared resources. Cloud-based IT infrastructure supports various applications, including SaaS applications, sales platforms, office productivity suites like Google Suites, and IT system management tools. Critical business functions such as accounting, finance, virtualization, networks, endpoints, and IT applications are increasingly moving to the cloud. AWS, the leading cloud service provider, offers a range of services, including security solutions, to mitigate risks. Despite these efforts, data breaches and cyber-attacks remain a significant concern, necessitating continuous investment in cloud security. Hence, the above factors will impede the growth of the market during the forecast period.

Exclusive Customer Landscape

The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Accenture Plc - The company offers cloud managed services that includes Cloud migration, Infrastructure Services, Data transformation, and cloud security.

The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• Accenture Plc
• ALE International
• Alphabet Inc.
• Amazon.com Inc.
• Atos SE
• Capgemini Service SAS
• Cisco Systems Inc.
• Cloudticity LLC
• Cognizant Technology Solutions Corp.
• DXC Technology Co.
• Fujitsu Ltd.
• HCL Technologies Ltd.
• Hewlett Packard Enterprise Co.
• Huawei Technologies Co. Ltd.
• Infosys Ltd.
• International Business Machines Corp.
• Lumen Technologies Inc.
• NEC Corp.
• NTT DATA Corp.
• Telefonaktiebolaget LM Ericsson
• Verizon Communications Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Segmentation

By End-user 

The large enterprise segment is estimated to witness significant growth during the forecast period. Cloud Managed Services refer to IT offerings delivered by Managed Service Providers (MSPs) to enterprises and Small and Medium-sized Enterprises (SMEs) for managing their IT infrastructure, applications, and services in a cloud environment. These services encompass ITeS offerings such as VoIP, Unified Communications as a Service (UCaaS), and Network services.

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The large enterprise segment accounted for USD 39.20 billion in 2018. With the advent of 5G, Mobility, and the increasing adoption of cloud-based apps and services, the demand for Cloud Managed Services is escalating. MSPs offer scalability and reliability, enabling businesses to focus on their core functions while reducing IT costs. However, there is a risk of vendor lock-in, making it essential for enterprises to evaluate various service types, including private and public cloud offerings, before making a decision. Large enterprises and SMEs alike are turning to Cloud Managed Services for their IT needs, with Verizon Communications, among others, providing solutions. Security services, including maintenance, storage, and managed network and security operations, are integral to these offerings. Artificial intelligence and machine learning are increasingly being integrated into cloud-managed services to enhance business process services. Cloud Managed Services cater to various verticals, including healthcare, finance, education, and retail, among others. The service offerings vary based on enterprise size, with customized solutions tailored to meet specific requirements.

Regional Analysis

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North America is estimated to contribute 40% to the growth of the global market during the market forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

Cloud Managed Services refer to IT offerings delivered by Managed Service Providers (MSPs) to enterprises and Small and Medium-sized Enterprises (SMEs) for managing their IT infrastructure, applications, and services in a cloud environment. ITeS sectors like VoIP and Unified Communications as a Service (UCaaS) are increasingly moving to cloud-managed services for scalability and reliability. The adoption of 5G and mobility is driving the demand for cloud-managed services, enabling businesses to focus on their core functions while reducing IT capital expenditures (CAPEX). MSPs offer various cloud-based services, including managed network operations, managed security operations, business process services, storage services, hosted services, maintenance services, and security management services. Enterprises and SMEs across industries and verticals are adopting cloud platforms for their IT infrastructure due to the benefits of cost reduction, flexibility, and improved security services. Large enterprises and SMEs are turning to cloud-managed services for network and security services, with Verizon Communications being a notable player in the market. The adoption of artificial intelligence and cloud-based apps is also fueling the growth of cloud-managed services. Private and public cloud deployments are popular service types, with the choice depending on the enterprise size and specific requirements. Vendor lock-in is a concern for some businesses, but the benefits of cloud-managed services outweigh the risks for most organizations.

Segment Overview

The market report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion " for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

• End-user Outlook
  • Large enterprise
  • Small and medium enterprise

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Argentina
    • Brazil
    • Chile

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Market Analyst Overview

Cloud Managed Services have become a crucial part of the IT landscape for enterprises of all sizes, enabling them to focus on their core business functions while outsourcing the management of their IT infrastructure and applications. Cloud Managed Services Providers (MSPs) offer various services such as Network Services, Security Management Services, Business Process Services, Storage Services, Hosted Services, Maintenance Services, and more. SMEs are increasingly adopting Cloud Managed Services due to the cost savings they offer compared to Capex investments. ITeS, VoIP, UCaaS, and cloud-based apps are popular service types in this segment. The rise of 5G and mobility is driving the demand for scalable and reliable cloud managed services. Enterprises, both large and small, benefit from the flexibility and cost savings of Cloud Managed Services. Private and Public cloud options cater to different enterprise sizes and requirements. Verizon Communications and other leading players offer advanced services like Artificial Intelligence and Security Services to enhance the value proposition. Network Services and Security Management Services are in high demand due to the increasing importance of data security. Cloud Platforms provide the foundation for managing IT infrastructure and applications effectively. The market for Cloud Managed Services is expected to grow significantly in the coming years, driven by the need for IT cost reduction and the increasing adoption of cloud-managed services in various verticals.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2024 and 2028
• Precise estimation of the size of the market  and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behavior
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies