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

Managed Services Market Forecast 2024-2028

The managed services market size is projected to increase by USD 184.29 billion, at a CAGR of 10.75% between 2023 and 2028. Increased adoption of IoT technologies is notably driving market development. The IoT is a network of physical and tangible objects that can communicate among themselves and are interconnected through technology and with the internal and external environment. The major focus of companies is to provide the right mobile devices to their employees.

There are certain disadvantages associated with the implementation of the BYOD policy, such as loss of productivity, lack of visibility, and increased security threats. Additionally, businesses are investing in cloud platforms, blockchain, and application maintenance and support services to enhance their infrastructure. Implementing tools like Application Performance Monitoring (APM), Front-end Monitoring, and AIOps analytics are becoming common practices within DevOps teams to ensure smooth operations.

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

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Market Segmentation By Deployment

The market share growth by the cloud segment will be significant during the forecast period. The inherent ease of use, cost-effectiveness, agility, and innovation in cloud security are encouraging SMEs, as well as some large organizations, to adopt cloud services gradually.

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The cloud segment was the largest and was valued at USD 99.17 billion in 2018. However, there is a general lack of confidence in this model among financially strong enterprises, as there are concerns regarding the lack of security features and proper data theft protection. Along with cost-effectiveness, functionality is also important to persuade organizations to adopt cloud-based managed-services. Innovations in data security are expected to drive the adoption of cloud-based managed-services among large organizations during the forecast period.

Market Segmentation By Type 

The managed data center service (MDS) segment dominates the market, primarily due to increased demand from the IT, banking, financial services and insurance (BFSI), education, healthcare, and retail sectors that require a single pivotal point for their storage and operations. Some of the major factors that drive the global MDS market are the increasing number of smart connected devices, rising volumes of educational data with the emergence of online courses, the increase in penetration of handheld devices (such as smartphones and tablets), and the use of data analytics to make informed business decisions. The market by MDS is expected to witness an increase in its year-over-year growth rate during the forecast period. An increase in data center implementation by large organizations will drive the demand. Building data centers in-house is expensive, so many large organizations and SMEs adopt MDS in their business operations. Such developments are expected to propel the MDS segment, which, in turn, will propel the market during the forecast period.

Regional Overview

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North America is estimated to contribute 37% to the growth of the global market during the forecast period. Technavio's analysts have provided extensive insight into the market forecast, detailing the regional market trends and analysis, and drivers influencing the market's trajectory throughout the forecast period. North America has always been a lucrative market for managed services, as the region is an early adopter of advanced technologies in the manufacturing, retail, and BFSI industries, which, in turn, enhances the demand for managed services. The strong presence and penetration of key vendors such as Accenture Plc, Atos SE, Cisco Systems Inc., DXC Technology Co., and Fujitsu Ltd. fuel market growth in the region. A few of the most advanced economies in the world are located in North America, which increases the need for managed services, including data processing and outsourcing and Internet services and infrastructure. In addition, the integration of cloud-based services, automation solutions, and artificial intelligence (AI) with operational and supply chain processes is leading to the development of new intelligent managed services in the region.

In addition, North America will also witness an increase in revenue because enterprises in this region are becoming more proactive in adopting managed-services. Previously, enterprises in the region invested in security in case they were attacked by hackers. Consequently, hackers found it easy to carry out industrial espionage, financial crimes, and data thefts. This is encouraging enterprises in North America to outsource the management of their security to managed security service providers (MSSPs), which will help manage the security of enterprises without interrupting business operations. This will lead to an increase in the adoption of managed services, leading to the growth of the regional market during the forecast period.

Market Dynamics and Customer Landscape

The market is witnessing growth driven by the increased adoption of IoT solutions, which necessitate robust data management and cybersecurity measures. A notable trend in this market is the increased adoption of the bring your own device (BYOD) policy, enabling hybrid work models and emphasizing the importance of IT security professionals in safeguarding organizational data.

However, the industry faces challenges such as system integration and interoperability issues, particularly in managing IoT devices and ensuring seamless operation across cloud-based technologies. With a focus on providing managed IT services, cloud computing, and digital transformation solutions, Managed Service Providers (MSPs) play a crucial role in enhancing operational efficiency and addressing industry requirements while meeting consumer needs. As organizations increasingly rely on cloud-based solutions and embrace IoT technologies and blockchain, MSPs offer comprehensive services encompassing application maintenance and support, application performance monitoring, and automation to drive business success in the digital age.

Key Market Driver

Increased adoption of IoT solutions is notably driving market development. The IoT is a network of physical and tangible objects that can communicate among themselves and are interconnected through technology and with the internal and external environment. It connects hardware devices, embedded software, communication services, and managed-services. It creates smart communication environments such as smart homes, smart shopping, smart transportation, and smart healthcare. Smart machines can control and monitor various objects using microcontrollers via the Internet from a remote location with the help of IoT technology.

Moreover, IoT is an enabler of managed services, as smart connected devices require managed communication services and MMS for machine-to-machine (M2M) communication. Managed services help build end-to-end IoT infrastructure for smart communities, smart healthcare, smart homes, and smart transportation systems. All such benefits are expected to drive the growth of the market during the forecast period.

Siginificant Market Trends

Increased adoption of the bring your device (BYOD) policy is an emerging trend shaping market growth. Enterprise mobility has gained ground in the corporate world in response to employees' preferences to use their smartphones, tablets, and portable computers at work. BYOD demands specific management and IT service delivery frameworks to guarantee electronically secure and productive work environments. The major focus of companies is to provide the right mobile devices to their employees. There are certain disadvantages associated with the implementation of the BYOD policy, ADTD, such as loss of productivity, lack of visibility, and increased security threats. 

Further, managed services assist in enforcing BYOD policies and ensuring that employees comply with security protocols. Managed services providers help in remote monitoring and control of all aspects of mobile devices connecting to corporate networks. It also provides a single solution that enables governance, control, and ongoing visibility for all types of organizations. Thus, these factors are expected to drive the growth of the market during the forecast period.

Major Market Challenges

System integration and interoperability issues are significant challenges hindering market growth. The adoption of advanced technology in many industry verticals, including the BFSI, telecom, and public sector firms, is increasing significantly. This raises problems of system integration and interoperability issues. Managed services help in providing unified IT solutions that can be seamlessly integrated with the existing IT infrastructure of organizations. Technical glitches during the operations can incur a cost to the organization and reduce operational efficiencies. Miscommunication between the organization and managed service providers can lead to misunderstandings about the integration requirements and expectations.

However, system integration and interoperability issues arise when there is inadequate planning for system integration when organizations update or merge their IT infrastructure with acquired companies. Integration of multiple IT systems or transferring data between systems is a complex process on traditional IT infrastructure, which can create a lot of cross-platform system integration issues for managed service providers. Therefore, system integration and interoperability issues can restrain the growth of the market during the forecast period.

Market Customer Landscape

The market forecasting report includes the adoption lifecycle of the market research and growth, 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 and trends strategies.

Global Market Customer Landscape

Who are the Major Market Companies?

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 managed services which help to stabilize, optimize, and manage IT infrastructure with agility and flexibility at the pace of business.

ALE International - The company offers managed services which provides vendor engagement on remote operations for communications, network, and collaboration solutions.

Alphabet Inc. - The company offers managed services through Google cloud MSPs which are highly specialized partners capable of migrating, building, and providing ongoing application support services.

The  Market  growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• Amazon.com Inc.
• Atos SE
• BMC Software Inc.
• 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.

Market analysis and report of 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 Analyst Overview

In today's rapidly evolving business landscape, the Managed Services Market is witnessing exponential growth driven by the widespread adoption of cloud computing and digital transformation initiatives. Managed service providers (MSPs) offer a comprehensive suite of services, encompassing cloud-based technologies, cybersecurity, and data management to address the diverse needs of industries such as retail & consumer goods, healthcare & life science, energy & utilities, government, and media & entertainment.

As organizations embrace hybrid work models, the demand for IT security professionals and managed security services (MSSs) surges to combat cyber threats and ensure privacy protection. With IoT devices proliferating across sectors like the healthcare sector, electronic health record (EHR) management and network services become critical for data backup and recovery.

Furthermore, managed IT services enhance operational efficiency through cloud & infrastructure managed services and application testing, leveraging big data and machine learning (ML) for IT operations optimization. Managed network services and endpoint management solutions ensure seamless network infrastructure and server & device management.

In serving both large enterprises and small and medium Enterprises (SMEs), managed services cater to business productivity and consumer needs, deploying cloud-based solutions and hybrid vehicles for industry requirements. As Aeries Technology and other consulting and professional services providers embrace agile approaches, the Managed Services Market continues to thrive, meeting the evolving demands of the digital era.

Segment Overview

The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028. 

• Deployment Outlook
  • Cloud
  • On-premises

• Type Outlook
  • MDS
  • MNS
  • MSS
  • MMS
  • Others

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

Managed Services Market Scope
Report Coverage	Details
Page number	191
Base year	2023
Historic period	2018-2022
Forecast period	2024-2028
Growth momentum & CAGR	Accelerate at a CAGR of 10.75%
Market Growth 2024-2028	USD 184.29 billion
Market structure	Fragmented
YoY growth 2023-2024(%)	10.24
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 37%
Key countries	US, China, Japan, Germany, and UK
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Accenture Plc, ALE International, Alphabet Inc., Amazon.com Inc., Atos SE, BMC Software Inc., 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, and Verizon Communications Inc.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, market growth analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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

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

 

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