Managed Services Market Expected to Grow at a CAGR of 11.5%

The managed services market was valued at USD 166.8 billion in 2018, and it is expected to reach USD 319.5 billion by 2024, registering a CAGR of 11.5% during the forecast period of 2019-2024. The market for managed services is going to be fuelled 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.

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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.

Highlights of the Market:

  • 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.
  • 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 fuelling the demand for managed security services.

 

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.

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. (via)

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