Managed Services Market Size, Share & Industry Analysis, By Service (Voice Service, Non-Voice Service, and IT Managed Service), By Function (Finance & Accounting, Marketing, Supply Chain, Human Resource, Information Technology, and Others), By End-user (BFSI, IT & Telecom, Government, Retail & E-commerce, Energy & Utility, Healthcare, Manufacturing, and Others), and Regional Forecast, 2024-2032

The global managed services market size was valued at USD 283.90 billion in 2023 and is projected to grow from USD 316.87 billion in 2024 to USD 839.83 billion by 2032, exhibiting a CAGR of 13% during the forecast (2024-2032). North America accounted for a market value of USD 92.22 billion in 2023. This report studies services offered by market players such as Atos SE, which offers managed detection & response services and managed security services. Similarly, Fujitsu offers managed infrastructure services & multi-cloud managed services and Capgemini SE offers application managed & professional services, managed public cloud services, and many other solutions.

The global market is driven by the rising adoption of these services among enterprises in various sectors, such as IT & telecommunications, BFSI, and healthcare, among others. Enterprises are implementing these services in their business units to digitize their business processes, upgrade & innovate their infrastructure, and enhance productivity & scalability. Moreover, businesses around the world are shifting toward cloud computing and embracing managed IT services to reduce their infrastructure expenses. Professional and managed services assist businesses in keeping up with the rapid digital transformation in a more efficient manner. Market participants are concentrating on introducing cutting-edge managed services for enterprises to capture a substantial portion of this promising market.

• In April 2023, Aeries Technology launched cyber security managed services for enterprises to meet the regulation and compliance framework. The company is offering significant support to firms in their digital transformation with safe and secured infrastructure.

The COVID-19 pandemic impacted the world economy and forced many enterprises to implement spending cuts and contingency plans in the short term. However, the adoption of cloud applications, Artificial Intelligence (AI), security solutions, and Big Data surged considerably during this period. This growth allowed cloud giants to switch their services to deal with the increased load. MSPs adopted the new norms of working remotely to curb the virus spread, which further helped the market grow.

Managed Services Market Trends

Increasing Adoption of Cloud-based Managed Security Services (MSS) will Contribute to Market Growth

The increasing adoption of cloud-based services is a major global trend. The rising demand for securing IT infrastructure against cyber threats has pushed organizations to adopt Managed Security Services (MSSs) in their business models. Cyber threats are evolving in both enterprises and government sectors, thus forcing MSPs to develop advanced offerings that can detect and address cyber risks. Various companies are focused on adopting cloud-based managed security services to boost their security against various email viruses, Distributed Denial of Service (DDOS) attacks, and firewall intrusion detection. Key players are offering advanced cloud-based security services to cater to rising security needs. For instance,

• In May 2023, Ireland-based Ernst & Young Global Limited introduced managed security services for small and medium-sized enterprises facing cyberattack challenges. The company aims to offer cost-effective services to secure cloud-based infrastructure and modern tools.

The adoption of managed security services enables various organizations to handle an incident, monitor & manage ongoing cybersecurity risks, and detect threats. Therefore, the demand for cloud-based services will grow in the forthcoming years.

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Managed Services Market Growth Factors

Growing Adoption of Bring Your Own Device (BYOD) Among Organizations to Aid Market Growth

Bring Your Own Device (BYOD) stands as one of the primary components of digital technology and productivity across various sectors in the current technology-driven business environment. Using a BYOD program enables employees to use their own devices for work purposes, leading to cost savings and increased flexibility for organizations. Syntonic reports that 87% of businesses depend on their employees using personal mobile devices to access company apps.

The increased use of BYOD has increased the number of intelligent devices in a workplace, such as tablets, smartphones, laptops, and other gadgets. This would raise the risk of data integrity and security as the data moves across smart devices. As a result, many companies are turning to these services to monitor the security of these smart devices, thereby promoting the managed services market growth in the forthcoming years.

RESTRAINING FACTORS

Lack of IT Security Professionals May Inhibit Market Growth

The lack of availability of IT and cybersecurity professionals is one of the major limitations for the growth of this market. This factor can hinder organizations’ ability to meet their IT security needs. Lack of valued IT security skills can leave organizations open to cyberattacks, resulting in data loss and reputation damage. With the growth of several cybersecurity threats, the requirement for advanced security solutions to deal with cyberattacks is growing exponentially. This highlights the need for cybersecurity training to help close the skills gap, introduce new talent to the work field, and make the organization more secure.

Moreover, many limitations, such as demand for experienced professionals, ineffectiveness of the managed service model, data privacy & security issues, and requirement for large investments are projected to hinder the market growth.

Managed Services Market Segmentation Analysis

By Service Analysis

Rapid Growth in Technological Infrastructure to Boost Demand for IT Managed Services

Based on service, the market is classified into voice service, non-voice service, and IT managed services.

The IT managed services segment is expected to account for the largest managed services market share during the forecast period. The rising penetration of virtual chat-box services based on AI, Internet of Things (IoT) platforms and Big Data is expected to significantly accelerate the segment’s growth.

Furthermore, various organizations are implementing voice and non-voice services integrated with the virtual chat-box. This strategy will assist in managing various functions, such as email marketing, human resources outsourcing, marketing, sales, and customer relations services. MSPs are focusing on integrating conversational interfaces, such as voice-enabled chatbots into their customer service applications to create an automated workflow. Vendors, such as SAP and Microsoft deployed speech-enabled chatbot options in their service offerings to transform customer service interactions and human resource applications.

Furthermore, the IT managed services segment is sub-segmented into managed communication services, managed networks & infrastructure, managed security, managed wireless & mobile computing, managed cloud infrastructure, managed software as a service, and others (managed print services, managed support services, data analytics, and more.)

By Function Analysis

Stringent Financial Regulations to Fuel Adoption of Managed Services in Finance and Accounting

Based on function, the market is divided into Finance & Accounting (F&A), marketing, supply chain, Human Resource (HR), Information Technology (IT), and others (customer services and more).

The finance & accounting segment captured the maximum market share in 2023. These services help in managing and analyzing the financial requirements through financial reporting, bookkeeping services, and more. Also, the segment’s growth is due to the increasing adoption of services based on Big Data and cloud applications among various organizations to manage capital exchange with customers and partners.

Furthermore, the supply chain segment is expected to record a rapid CAGR during the forecast period. The globalization of goods and services is driving the demand for these services in supply chain functions. Similarly, increasing competition is driving the marketing strategies, thus propelling the service demand in the marketing function.

By End-user Analysis

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Early Adoption of Advanced Technologies to Propel Product Usage in IT & Telecom Sector

Based on end-user, the market is divided into BFSI, IT & telecom, government, retail & e-commerce, energy & utility, healthcare, manufacturing, and others (education, travel, and more).

The IT & telecom segment is predicted to gain a dominant market share during the forecast period. The growth of the segment can be attributed to the increased need for these services to manage and maintain highly complex IT infrastructures. This is expected to fuel the market growth during the forecast period.

The BFSI segment is estimated to be the fastest growing segment over the forecast period. Businesses in this sector require a sophisticated IT infrastructure to preserve and manage data ranging from trading instruments to record-keeping, reporting & computation, and more. IT services are critical to the success of financial transactions that require the exchange of information with customers or internal employees. Furthermore, the BFSI sector faces numerous cybersecurity threats due to the sensitive nature of financial data. Managed security services offer proactive monitoring, threat detection, and incident response, thereby minimizing the risk of breaches and ensuring regulatory compliance, such as GDPR or HIPAA.

The retail & e-commerce segment is set to showcase steady growth considering the robust increase in online customers and shopping. In addition, the healthcare and manufacturing segments are predicted to witness a significant increase in their CAGR. The rise in usage of IoT solutions in different applications, such as patient service, automated surgeries, nanotechnology, and more is driving the segment’s growth.

REGIONAL INSIGHTS

Geographically, the market is classified across five major regions - North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America.

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North America is expected to dominate the market share in terms of revenue. The market’s growth in this region is mainly due to the robust presence of many MSPs, such as IBM Corporation, Accenture, and Cognizant, among others. The U.S. holds a majority share of the North American market owing to the rising adoption of these services among small and medium-sized enterprises and provision of substantial IT budgets. Thus, key players in this market are focused on merger and acquisition strategies to prevent cybersecurity breaches.

Asia Pacific is expected to record the highest CAGR during the forecast period. The regional market’s strong growth is owing to the increasing investments in data security and rising adoption of cloud-based solutions among several organizations. Growing economies, such as China, India, Singapore, Australia, and New Zealand provide massive opportunities to adopt these managed outsourcing services. Besides, various other service providers in this region are developing an integrated cloud storage platform for sectors, such as retail, BFSI, manufacturing, and more. Additionally, the Indian government's continuous investments in physical infrastructures, such as smart cities are anticipated to generate opportunities for implementing managed services, such as data storage, security, and network management in the nation.

Europe holds a significant position in this market. The growth of the regional market is owing to the rising adoption of cloud platforms and high demand for managing confidential enterprise data. Germany, the U.K., and France are expected to showcase strong growth opportunities in the region considering the increasing number of small and medium-sized enterprises and their investments in advanced technologies.

Similarly, the Middle East & Africa and Latin America are estimated to grow at a considerable rate. This growth is due to the increasing ICT spending, rising government initiatives, growing trend of big data & analytics, and technological advancements in these regions. For instance, the governments of GCC countries are focusing on pursuing pioneering national development projects, such as the UAE’s Vision 2021 and Saudi Arabia’s Vision 2030. These projects will help improve cloud-based services and boost economic diversification through the expansion of IT infrastructures. This is expected to boost the growth of the market in these regions during the forecast period.

List of Key Companies in Managed Services Market

Leading Market Players Are Focusing On Strengthening their Market Positions

Companies operating in the market are focusing on offering services that drive business growth and enhance customer experience. The services offered by these companies are easy to deploy and operate. These services drive efficiency, enhance customer experience, and pave the way for innovation on next-generation network services. Also, the key players in the market are keen on offering innovative services to support the adoption of various technological infrastructures and digital transformation. Through strategic partnerships and collaborations, key market players are expanding their global presence.

• April 2023 - VMware, Inc. launched VMware Cross-Cloud managed services to help customers and partners expand their services and practices in a secured multi-cloud environment. It will also help enterprises accelerate their digital transformation with the implementation of smart cloud strategy.


• April 2023 – Sinch AB announced its strategic collaboration with Microsoft Teams and Synoptek to provide managed and professional services. The company will offer voice services for Teams using operator connect that enables users to make calls to anyone and anywhere.

List of the Key Companies Profiled:

• IBM Corporation (U.S.)


• Accenture plc (Ireland)


• Fujitsu Ltd. (Japan)


• Microsoft Corporation (U.S.)


• NTT DATA Corporation (Japan)


• Amazon Inc. (U.S.)


• DXC Technology (U.S.)


• Tata Communication Services Limited (India)


• Capgemini SE (France)


• Atos SE (France)

KEY INDUSTRY DEVELOPMENTS:

• October 2023 – Logicalis, a technology services provider, introduced an Intelligent Connectivity suite. This suite comprised solutions, such as SASE, SSE, SD-WAN, and Private 5G, all powered by Cisco Systems, Inc. With this suite, Logicalis’ customers could easily access digitally managed services supported by the Logicalis Digital Fabric Platform and developed using Cisco technology.


• September 2023 – Cloud5 Communications, a provider of communication and technology solutions, introduced its new division for managed services. This division aims to cater to the IT needs and challenges of different industries, including hospitality, student housing, and senior living. By offering assistance in managing IT operations, technology infrastructures, and security, this division will help consumers streamline their processes effectively. 


• May 2023 – NTT Corporation launched SPEKTRA, a next-generation managed network solution, to support digital transformation. The new service launch was in line with the company’s vision of having an autonomous Network Operations Center to boost network performance.


• May 2023 - Walter Capital and Alfar Capital Partners successfully acquired MSP Corp., a Canadian managed IT service provider. To enhance its position in the country, MSP Corp. merged with Groupe Access, an MSP specializing in cybersecurity and IT solutions. This acquisition will enable the company to offer advanced solutions and solidify its presence in Canada.


• March 2023 - Tech Mahindra Limited announced a strategic partnership with Indosat Ooredoo Hutchison to support its first digital platform with managed services for enhanced customer service. The collaboration is helping Indosat improve its customer experience and enhance its digital growth.

REPORT COVERAGE

An Infographic Representation of Managed Services Market

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The research report provides an in-depth analysis of the market. It focuses on key aspects, such as leading companies, top end-users, and prominent product applications. Besides this, it offers insights into the latest market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several key factors that have contributed to the market's growth in recent years.

Report Scope and Segmentation