Market Trends of Europe Managed Services Industry
Cloud segment is expected to grow at a higher pace
- With digital transformation in the region, organizations have become dependent on the success of creative applications and extensions that IT could provide. It has become a critical competitive edge for most organizations. Moreover, IT outsourcing has become more than a simple cost-reduction technique with cloud migrations and cloud service options. Therefore, this new form is driven by organizational motivations regarding business growth, customer experience, and competitive disruption.
- The increasing demand for cloud outsourcing indicates that European companies prefer cloud platforms from public sources for data storage purposes. Also, businesses operating over the cloud will likely be concerned about security threats and will eliminate all possible threats by outsourcing IT security services. This way, the demand for expert knowledge of the vendor will be required, along with an easy delegation of responsibilities.
- According to Eurostat, the use of cloud computing among EU enterprises increased significantly in recent years. Industry sources further suggest the increasing adoption of IaaS and SaaS in the European region, which in turn would increase the demand for hybrid cloud in the market. Furthermore, several regional initiatives such as EU's Digital Decade which to expand the use fo cloud-edge technologies among European businesses to 75% by 2030 also favors the studied market's growth.
- Bring-your-own-device (BYOD) and the Internet of things (IoT) have pushed the growth of cloud adoption, as cloud-based solutions are being leveraged primarily to derive value from the data generated by IoT. This is supported by the public, private, and hybrid cloud models. In addition, the legacy IT infrastructure of enterprises may have to rely on the cloud to connect with IoT devices. Besides, organizations realize several drawbacks of public and private cloud services. They are looking for a hybrid approach that provides advantages of both architectures, minimizing the drawbacks in each model. As a result, there is an emerging trend of integrating two or more applications running on private and public systems, i.e., hybrid cloud hosting services.
- Furthermore, the growing adoption of cloud and hybrid IT infrastructure in the European is also evident from the fact that the share of enterprises employing ICT specialists has been growing across various European countries. For instance, according to Statistics Denmark, in Denmark, the share of enterprises employing ICT specialists increased to 34% in 2022, compared to 25% in 2016.
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Managed Security Account for Significant Market Share
- To maintain a competitive edge, organizations across Europe, irrespective of their sizes, increasingly rely on managed service providers to ensure technology usage to transform and scale businesses. Managed security service providers are adding value to their portfolio of offerings by providing the right expertise, solutions, and pricing models. Managed security service is an emerging field in the dynamic business space of the region. Service providers are setting up managed security operations centers (SOC) to deliver security and support services. Most service providers deploy their own unified security management platform for customers to provide security information and event management) and other monitoring solutions (SIEM).
- The growing cyber security threats due to the increase in the development of technologies have led the government to invest in cyber security and MSSP. For instance, according to AAG IT Services & Cyber Security, in 2022, about 39% of enterprises in Europe reported suffering a cyberattack.
- Fully managed to host services, including server installations and setup, approved software installations according to customer requirements, security monitoring, software updates and management, data backup and protection, and a slew of other services. Many enterprises in Germany, especially startups and SMEs, are looking for such solutions. These services offer the opportunity for SMEs that need more capital to keep and maintain their servers on-site, need an appropriate IT team, or are time-constrained due to the demands of their business operations.
- The rise in data breaches in the region is expected to drive the managed security services and enable managed security vendors to develop new products to capture the market share. For instance, according to tour shark, with over 22.3 million data breaches in the third quarter of the current year, Russia led all of Central and Eastern Europe (CEE) countries. Ukraine and Montenegro came in second and third, respectively.
- To empower the thriving startup ecosystem in the country, many French majors, like Dassault Systems, are offering packaged solutions (software-as-a-service (SaaS), platform-as-a-service, PaaS, and infrastructure-as-a-service (Iaas)) that can be easily deployed with tailored offerings for startups to augment growth. The French government decided to use the services of outsourcing non-critical data to an external cloud provided by Orange Business Services after realizing the benefits of using the cloud, which is perfectly suited to capacity fluctuations (thereby empowering the government with the flexibility required to implement new services more quickly).
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