Managed Services Market

Managed Services Market Overview

The managed services market size is projected to grow from USD 323.8 billion in the current year to USD 1,026 billion by 2035, representing a CAGR of 11.1%, during the forecast period till 2035.

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The new research study consists of managed service industry and trends analysis, detailed market forecast analysis, and provide actionable strategic recommendations.

The continuously evolving information technology industry, digital transformation and its ever-growing functions and fields have immensely raised the demand for managed service. Managed services refer to an exercise in which tasks are managed by a third party with regard to business IT services. In this practice, organizations outsource the responsibility for managing and monitoring numerous IT functions and infrastructure by a third-party service provider. The purpose of the managed service is to offload common tasks to an expert to minimize cost and enhance service quality.

Driven by the advantages of these services, the managed service market is experiencing a transformative shift owing to the rising complexity of IT infrastructure management and rising inclinations towards cloud computing technologies. Businesses are leveraging external expertise for efficient IT operations and gaining competitive advantages. This transformation has spiked the demand for business continuity services and application management services.

In addition, enterprises endeavoring to optimize their operations and enhance productivity have emerged as a vital component in sustainable growth. In this context, to remain competitive, organizations are embracing managed service solutions that will enable them to leverage expert knowledge while ensuring operational resilience in an ever-evolving technological landscape. The future of IT infrastructure management lies in recognizing the value of partnerships with skilled managed service providers who can deliver innovative solutions tailored to specific business demands. However, managed service market challenges, such as cyber security threats and requirements for regulatory compliance can impact the market expansion. Overall, the managed service market is poised to expand at an excellent CAGR during this forecast period driven by the rising need for IT infrastructure management solutions, the growing need for managed security services to address cyber security threats issues.

Managed Services Market Share Insights

The managed service market report presents an in-depth analysis of the various companies that are involved in offering managed service, across different segments, as defined in the table below:

Managed Services Market: Report Attributes / Market Segmentations

Managed Services Market Segmentation

Market Share by Type of Services

This managed service market segmentation is bifurcated into managed backup and disaster recovery, managed communication service, managed IT infrastructure service, managed mobility services, managed network services, and managed security services. According to market research, IT infrastructure services which is categorized into managed data analytics, managed print service, server management, and storage management exhibit dominance in the market wherein the managed data analytics subsegment captures the major market share. Majorly, the need for reliable IT infrastructure management advances market growth which helps enterprises manage their servers, storage, databases, and data centers. Nevertheless, the managed network service segment is expected to sprout out at a higher CAGR of over 14% driven by an acceleration in the demand for better connectivity networks which incorporates WAN, LAN, and SD-WAN to ensure seamless connectivity and reliable network performance.

Market Share by Type of Deployment

The segments underscore multiple types of deployment of the global managed service market which incorporates cloud-based and on-premises. According to market research, currently, cloud-based deployment holds the over 65% market share and is expected to dominate the segment driven by its unique benefits, such as scalability, cost-efficiency, remote access and flexibility, rapid deployment, and disaster recovery. Besides, cloud-based services entail outsourcing IT operations, infrastructure, and applications to handle services that host them on a cloud platform. Therefore, the segment is also likely to grow at an impressive CAGR in the coming years. Furthermore, on-premises deployment is estimated to witness a steady growth rate driven by conventional models and its benefits in offering more security and privacy.

Market Share by Type of Enterprise Size

On the basis of the type of enterprises, the managed service market is segmented into small and medium-sized enterprises and large enterprises. As per our projection, large enterprises are expected to capture the over 75% share of the market and will dominate the segment throughout this forecast period. Due to having complex operations, vast IT infrastructure, and global presence, large-sized organizations need comprehensive IT solutions, such as data management services, IT infrastructure management, and business continuity services that help them to handle their multiple data centers, intricate IT ecosystem, and huge networks. On the other hand, small and medium-sized enterprises are notably escalating the market demand with the fastest CAGR in the upcoming decade. The rising number of SMEs around the world is propelling the demand for managed services due to their limited resources, lack of internal IT capabilities that require to manage complex systems as well as demand for scalable solutions.

Market Share by Type of Vertical

The distribution of the global managed service market is split into BFSI, energy & utility, government, healthcare, it & telecommunication, manufacturing, retail & e-commerce, and others. According to our analysis, BFSI is poised to be the leading segment among the given verticals. The factor behind the segment growth is attributed to the managed services benefits in banking, financial services, and the insurance sector where these services provide expertise and support to address their specific requirements. Also, the rising incidence of cybersecurity threats because of their sensitive nature of financial data, strict regulatory standards, and the increasing shift toward digital banking, has augmented the BFSI industry’s dependency on managed security services. However, IT and telecommunication verticals will likely grow at an excellent CAGR during this projection period. This vertical is one of the major contributors to fuel the demand for managed services as these industries need IT infrastructure, cloud services, and network management services to keep up with evolving technology.

Market Share by Geographical Regions

This segment highlights the distribution of managed services across various geographical regions, such as North America, Europe, Asia, Latin America, Middle East and North Africa, and the rest of the world. As per market research, North America is estimated to maintain its leading position with the majority of the managed service market share during this projection timeframe. Moreover, Asia is predicted to rise at a noteworthy CAGR in the coming years owing to the rapid digital transformation and economic growth in the developing nations. Especially, in countries such as China, India, and South Korea, governments and organizations are heavily investing in digital transformation to improve efficiency, competitiveness, and customer engagement.

Managed Services Market Key Insights

The “Managed Service Market, Till-2035: Industry Trends and Global Forecasts “report features an extensive study of the current market landscape, market size and future opportunity within managed service market, during the given forecast period. The market report highlights the efforts of several stakeholders involved in this rapidly emerging segment of the service providers industry. Key takeaways of the managed service market report are briefly discussed below.

Key Drivers of Managed Service Market

Several key market drivers are accelerating the managed service market growth; however, the mounting adoption of cloud computing technology and the prevalence of cybersecurity attacks are the major factors, raising the market demand. Worldwide, enterprises are extensively adopting cloud-based solutions and services in both public and private sectors which has also elevated the risk of cybersecurity threats like ransomware, phishing, and cyberattacks. Therefore, more and more enterprises are implementing cybersecurity-managed services to manage cybersecurity risk and ensure protection. Further, a rise in the trend of outsourcing managed services to reduce capital expenses is also attributed to escalating the managed service market opportunities. Moreover, the increasing need to meet regulation compliances and the heightening demand from small and medium-sized enterprises are some of the other considerable factors likely to expand the managed service market outlook.

Managed Service Competitive Landscape

The managed service competitive landscape is highly competitive with the dominance of giant industry players such as IBM, Accenture, Cisco, along with many and emerging regional and niche service providers which are shaping the managed service market dynamic through their wide range of service portfolio. It is interesting to note that major global IT companies dominate the market with their holistic managed services by leveraging their scale, cutting-edge technology, and expertise in service. While niche service providers employ strategies, and collaboration & partnerships with established players to secure market share and expand global reach.

Market Challenges in Managed Service Market

In spite of the rising demand for managed services solutions, the growth of the market can be impeded due to growing cybersecurity threats and risks as managed services are the main targets for cybercriminals owing to the sensitive data that are handled by managed services. Additionally, the lack of skilled IT professionals in crucial fields like cloud architecture and advanced data analytics can also cause challenges for the expansion of the market over this forecast period. Thus, industry players are constantly offering innovative solutions to tackle these challenges.

Regional Analysis: North America is Expected to Dominate the Market with the Largest Managed Service Market Share

With respect to regional managed service market insights. North America predominantly leads the market for managed services owing to its robust mature IT infrastructure management ecosystem with early implementation of cutting-edge technologies from cloud computing to automation and artificial intelligence. Also, the region is renowned as a hub of tech companies particularly, in the US and Canada, generating huge demand for managed services solutions to optimize and sustain their advanced systems. In addition, the high adoption of cloud services management, and increased focus on outsourcing non-core functions to minimize operational costs further ascribed to fortify the market expansion in the region.

Leading Managed Service Providers

Examples of key managed service providrers involved in the managed service market (which have also been captured in this market report, arranged in alphabetical order) include Accenture, Amazon, AT&T, Atos, Broadcom, Capgemini, Cisco, Digital Reality, Dimension Data, DXC, Fujitsu, GTT, HCL, IBM, Infosys, Microsoft NTT DATA, Rackspace, ScalePd Software, Tata Communication Services, and Telefonaktiebolaget. This market report includes an easily searchable excel database of all the companies who have adopted the managed service market.

Recent Developments in Managed Service Market

• In September 2024, IBM presented the latest services and solutions to help Oracle clients from its cloud applications and generative AI technology.
• In Jun 2024, Telefonica Tech entered into a partnership with IBM to drive the development of AI and analytics and data management solutions for enterprises.
• In May 2024, Lenovo collaborated with Cisco to deliver fully integrated infrastructure and networking solutions to accelerate digital transformation for businesses of all sizes.
• In January 2024, Kyndryl teamed up with Cisco to develop a new security edge service to aid customers in improving their security controls and address and respond cyber incidents proactively.
• In January 2024, GTT signed a deal with JOVO to deliver two new technical services. Through this partnership companies aim to offer field expertise for inspections, maintenance, repair, and engineering consultancy.

Managed Service Market Report Coverage

The market report presents an in-depth analysis, highlighting the capabilities of various companies engaged in this domain, across different segments. Amongst other elements, the market report includes:

• A preface providing an introduction to the full report managed service market, 2019-2023 (Historical Trends) and till-2035 (Forecasted Estimates).
• An outline of the systematic research methodology adopted to conduct the study on the managed service market, providing insights on the various assumptions, methodologies, and quality control measures employed to ensure the accuracy and reliability of our findings.
• An overview of economic factors that impact the overall managed service market, including historical trends, currency fluctuation, foreign exchange impact, recession, and inflation measurement.
• An executive summary of the insights captured during our research. It offers a high-level view on the current state of the managed service market and their likely evolution in the mid-long term.
• A detailed assessment of the managed service market landscape, based on several relevant parameters, including year of experience, company size, location of headquarters, and ownership structure.
• Elaborate profiles of prominent players engaged in the managed service market, featuring information on their year of establishment, location of headquarters, company size, company mission, company footprint, management team, contact details, financial information, operating business segments, managed service portfolio, moat analysis, recent developments, and an informed future outlook.
• A qualitative assessment of the various megatrends ongoing in the managed service industry, including the rise of managed security services and integration of artificial intelligence and automation in managed services.
• An analysis highlighting the key unmet needs across managed service industry, featuring insights generated from real-time data on unmet needs as identified from social media posts, recent publications, industry blogs and the views of key opinion leaders expressed on online platforms.
• An in-depth analysis of various patents that have been filed / granted related to managed service and its components, based on various parameters, such as type of patent, patent publication year, patent age and leading players.
• A detailed analysis of recent developments in the managed service domain, based on relevant parameters such as year of initiative, type of initiative (partnerships and collaborations, expansions, funding and product launches), geographical distribution and most active players (in terms of number of recent developments).
• Key winning strategies framework that helps in analyzing the level of competition within an industry, by tracing the key market activities including partnership, funding, expansion of leading players
• A qualitative analysis, highlighting the five competitive forces prevalent in managed service industry, including threats for new entrants, bargaining power of suppliers, bargaining power of customers, threats of substitution and rivalry among existing competitors.
• A discussion on affiliated global managed service market trends, key drivers and challenges, under a SWOT framework, which are likely to impact the industry’s evolution, along with a Harvey ball analysis, highlighting the relative effect of each SWOT parameter on the overall managed service market.
• A value chain analysis featuring a discussion on various stakeholders involved in the development of the managed service market, from suppliers to end-users.
• A detailed estimate of the current market size and the future growth potential of the managed service market over the next decade. Based on multiple parameters we have provided an informed estimate on the market evolution during the forecast period 2024-2035. The report also features the likely distribution of the current and forecasted opportunity within the managed service market. Further, in order to account for future uncertainties and to add robustness to our model, we have provided three forecast scenarios, namely conservative, base, and optimistic scenarios, representing different tracks of the industry’s growth.
• Detailed projections of the current and future market across various types of services such as managed backup and disaster recovery, managed communication service, managed, IT infrastructure service, managed mobility services, managed network services, and managed security service.
• Detailed projections of the current and future market across various types of deployment such as cloud-based and on-premises.
• Detailed projections of the current and future market across various types of enterprises such as large enterprises and small and medium-sized enterprises.
• Detailed projections of the current and future market across various types of verticals such as BFSI, energy & utility, government, healthcare, it & telecommunication, manufacturing, retail & e-commerce, and others.
• Detailed projections of the current and future managed service market across various geographical regions, such as North America (US, Canada, Mexico and other North American countries), Europe (Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Netherlands, Norway, Russia, Spain, Sweden, Switzerland, UK and other European countries), Asia (China, India, Japan, Singapore, South Korea and other Asian countries), Middle East and North Africa (Egypt, Iran, Iraq, Israel, Kuwait, Saudi Arabia, UAE and other MENA countries), Latin America (Brazil, Chile, Colombia, Venezuela and other Latin American countries) and rest of the world (Australia, New Zealand and other countries).

Author: Ronit Sharma and Neha Kashyap

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