Managed Services Market Size, Share - Growth, Trends and Forecast (2020 - 2025)

The Managed Services Market is segmented by Deployment (On-premise and Cloud), Type (Managed Data Center, Managed Security, Managed Communications, Managed Network, Managed Infrastructure, Managed Mobility, Managed Print Services, Managed Cloud Infrastructure, and Other Types), Enterprise Size (Small- and Medium-Enterprise, and Large Enterprise), End-user Vertical (BFSI, IT and Telecommunication, Healthcare and Hospitality, Entertainment and Media, Retail, Manufacturing, Government, and Other End-user Verticals), and Geography (North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa).

Market Snapshot

Study Period:

2019-2025

Base Year:

2019

Fastest Growing Market:

Asia Pacific

Largest Market:

North America

CAGR:

11.5 %

Major Players:

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Market Overview

The managed services market was valued at USD 185.98 billion in 2019, and it is expected to reach USD 356.24 billion by 2025, registering a CAGR of 11.5% during the forecast period of 2020-2025. The market for managed services is going to be fueled by the increasing shortage of expertise with businesses becoming more technology oriented. Furthermore, due to rapid digitalization, the companies are required to continually innovate and upgrade their infrastructure to remain competitive.

  • The managed services allow the business to outsource certain aspects of their IT requirements to a third-party service provider. The companies can reduce costs, boost productivity, and enhance performance without spending time on implementation, maintenance, and upgradation of their IT related infrastructure.
  • It is estimated that the year-on-year capital expenditure by small and medium businesses toward these services is estimated to increase by 25%. The market for SMBs and cloud services is expected to take a bigger share, despite the slow growth rate of the overall IT expenditure in SMBs, as per a recent survey conducted by Spiceworks.
  • According to the report published by the Technology Services Industry Association (TSIA) in 2018, about 81% of the MSPs were using commercial off-the-self tools, to provide a customized solution to their clients. Additionally, the focus of the industry is slowly shifting toward standardization of managed services with 68% MSPs offering a standard solution.

Scope of the Report

Managed services refer to a concept wherein an organization’s in-house day-to-day management and operation functions are managed by a third-party service provider. Managed services involve outsourcing of services related to infrastructure, security, printing, mobility, and other functions, while the ownership rights stay with the end user.

By Deployment
On-premise
Cloud
By Type
Managed Data Centre
Managed Security
Managed Communications
Managed Network
Managed Infrastructure
Managed Mobility​
By Enterprise Size
Small- and Medium-Enterprises
Large Enterprises
By End-user Vertical
BFSI
IT and Telecommunication
Healthcare and Hospitality
Entertainment and Media
Retail
Manufacturing
Government
Other End-user Verticals
By Geography
North America
United States
Canada
Europe
United Kingdom
Germany
France
Rest of Europe
Asia-Pacific
China
India
Japan
Rest of Asia-Pacific
Latin America
Brazil
Argentina
Mexico
Rest of Latin America
Middle East & Africa
United Arab Emirates
Saudi Arabia
South Africa
Rest of Middle East & Africa

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Key Market Trends

Managed Security is Expected to Hold a Significant Share

  • The cybersecurity remains an area which has not been addressed adequately by most of the companies, mostly because they do not have the level of expertise required to handle modern-day threats. As per the report published by the Hiscox in 2019, almost 74% of organizations have a very novice infrastructure, while only 10% of the organizations in the world have the necessary infrastructure to deal with cyberthreats.
  • The report also mentions that the cost incurred to the cyberattacks has ballooned in the last year alone. The pharmaceutical industry was the worst affected with the average cost incident going up from USD 130,000 in 2018 to USD 726,000 in 2019.
  • The worldwide spending on security-related hardware, software, and services is expected to reach USD 120 billion by 2022. Rising security threats, regulatory compliance, and fear of data breaches is likely to continue to drive the security investments across various industries. Many major organizations are adopting managed security services, to help maintain security within an organization.
  • Managed security services (MSSs), along with advanced threat detection and remediation capabilities, are enjoying high adoption rates. Furthermore, connected devices are expected to propel distributed denial of service (DDoS) and advanced persistent threat (APT) attacks. Thus, enterprises are seeking more proactive security measures to maintain security within an organization. According to Cloudflare, the financial cost of a DDoS is significant, as falling victim to a DDoS attack can cost an organization around USD 100,000 for every hour the attack lasts. The above factor is fueling the demand for managed security services.
  • According to the 2018 report by the Kaspersky Lab, the three industries that are most likely to suffer from a DDoS attack are telecoms, financial services, and IT. On an average, large enterprises lose USD 417,000 as a result of a denial of service attack, and small- and medium-enterprises lose USD 53,000. In 2018, around 20% of the companies, with 50 employees or more, reported that they have been the victim of at least one DDoS attack.

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Asia-Pacific is Expected to Witness Rapid Growth

  • The Asia-Pacific region is currently experiencing a high adoption of cloud services, owing to many organizations moving from traditional business models to cloud-based infrastructure, to modernize the organizations’ business processes, including a multitenant architecture. Digital transformation has become a top priority in the Asia-Pacific region, and an increasing amount of companies are implementing formal strategies to support their efforts.
  • As more Asian enterprises and government agencies migrate their infrastructure to the cloud, MSPs can provide a variety of services to help these organizations address advanced persistent threat (APT), by monitoring and performing scheduled maintenance.
  • Most customers in this region prefer MSSPs that have local security operations centers (SOCs), due to the requirements of data sovereignty and other security compliance regulations released by the governments.

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Competitive Landscape

The managed services market is consolidated, and it is dominated by major players. Some of the major players in the market are Cisco Systems Inc.​, IBM Corporation, Microsoft Corporation, Verizon Communications Inc.​, Fujitsu Ltd, Dell Technologies Inc.​, and Wipro Ltd, among others.

  • Aug 2019 - AT&T and Dell Technologies are jointly exploring the development of key open infrastructure technology areas for the next-generation network edge. This will be required by service providers, to support new use cases and service opportunities in a cloud-oriented 5G world.
  • Jan 2019 - Ericsson launched a new AI-based managed services offering for communications service providers, called the Ericsson Operations Engine. The Ericsson Operations Engine proactively and directly addressed service providers’ managed services complexity challenges, as the industry moves toward an era of 5G and IoT.
  • Jan 2019 - Fujitsu announced that it had entered a global systems integrator partnership with Microsoft. Three months later (March 2019), it attained the status of global Microsoft Azure Expert Managed Services Provider (MSP).

Table Of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Threat of New Entrants

      2. 4.2.2 Bargaining Power of Buyers/Consumers

      3. 4.2.3 Bargaining Power of Suppliers

      4. 4.2.4 Threat of Substitute Products

      5. 4.2.5 Intensity of Competitive Rivalry

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Increasing Shift to Hybrid IT

      2. 5.1.2 Improved Cost and Operational Efficiency

    2. 5.2 Market Challenges

      1. 5.2.1 Integration and Security Risks

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Deployment

      1. 6.1.1 On-premise

      2. 6.1.2 Cloud

    2. 6.2 By Type

      1. 6.2.1 Managed Data Centre

      2. 6.2.2 Managed Security

      3. 6.2.3 Managed Communications

      4. 6.2.4 Managed Network

      5. 6.2.5 Managed Infrastructure

      6. 6.2.6 Managed Mobility​

    3. 6.3 By Enterprise Size

      1. 6.3.1 Small- and Medium-Enterprises

      2. 6.3.2 Large Enterprises

    4. 6.4 By End-user Vertical

      1. 6.4.1 BFSI

      2. 6.4.2 IT and Telecommunication

      3. 6.4.3 Healthcare and Hospitality

      4. 6.4.4 Entertainment and Media

      5. 6.4.5 Retail

      6. 6.4.6 Manufacturing

      7. 6.4.7 Government

      8. 6.4.8 Other End-user Verticals

    5. 6.5 By Geography

      1. 6.5.1 North America

        1. 6.5.1.1 United States

        2. 6.5.1.2 Canada

      2. 6.5.2 Europe

        1. 6.5.2.1 United Kingdom

        2. 6.5.2.2 Germany

        3. 6.5.2.3 France

        4. 6.5.2.4 Rest of Europe

      3. 6.5.3 Asia-Pacific

        1. 6.5.3.1 China

        2. 6.5.3.2 India

        3. 6.5.3.3 Japan

        4. 6.5.3.4 Rest of Asia-Pacific

      4. 6.5.4 Latin America

        1. 6.5.4.1 Brazil

        2. 6.5.4.2 Argentina

        3. 6.5.4.3 Mexico

        4. 6.5.4.4 Rest of Latin America

      5. 6.5.5 Middle East & Africa

        1. 6.5.5.1 United Arab Emirates

        2. 6.5.5.2 Saudi Arabia

        3. 6.5.5.3 South Africa

        4. 6.5.5.4 Rest of Middle East & Africa

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles

      1. 7.1.1 IBM Corporation (Global Revenue in 2016, 2017, and 2018 |Business overview and Strategies| Global Customers and Competitors | Product Overview | Revenue Breakdown | SWOT Analysis | Strategies and Innovations | Recent Developments)

      2. 7.1.2 Accenture PLC (Global Revenue in 2016, 2017, and 2018 |Business overview and Strategies| Global Customers and Competitors | Product Overview | Revenue Breakdown | SWOT Analysis | Strategies and Innovations | Recent Developments)

      3. 7.1.3 Fujitsu Ltd (Global Revenue in 2016, 2017, and 2018 |Business overview and Strategies| Global Customers and Competitors | Product Overview | Revenue Breakdown | SWOT Analysis | Strategies and Innovations | Recent Developments)

      4. 7.1.4 DXC Technology Company (Global Revenue in 2016, 2017, and 2018 |Business overview and Strategies| Global Customers and Competitors | Product Overview | Revenue Breakdown | SWOT Analysis | Strategies and Innovations | Recent Developments)

      5. 7.1.5 Cisco Systems Inc. (Global Revenue in 2016, 2017, and 2018 |Business overview and Strategies| Global Customers and Competitors | Product Overview | Revenue Breakdown | SWOT Analysis | Strategies and Innovations | Recent Developments)

      6. 7.1.6 Tata Consultancy Services Limited (Global Revenue in 2016, 2017, and 2018 |Business overview and Strategies| Global Customers and Competitors | Product Overview | Revenue Breakdown | SWOT Analysis | Strategies and Innovations | Recent Developments)

      7. 7.1.7 Wipro Ltd (Global Revenue in 2016, 2017, and 2018 |Business overview and Strategies| Global Customers and Competitors | Product Overview | Revenue Breakdown | SWOT Analysis | Strategies and Innovations | Recent Developments)

      8. 7.1.8 AT&T Inc.

      9. 7.1.9 HP Development Company LP

      10. 7.1.10 Verizon Communications Inc.

      11. 7.1.11 Dell Technologies Inc.

      12. 7.1.12 Nokia Solutions and Networks

      13. 7.1.13 Deutsche Telekom AG

      14. 7.1.14 Rackspace Inc.

      15. 7.1.15 Citrix Systems Inc.

      16. 7.1.16 NSC Global Ltd

    2. *List Not Exhaustive
  8. 8. INVESTMENT ANALYSIS

  9. 9. MARKET OPPORTUNITIES AND FUTURE TRENDS

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