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Managed Services Market Size, Share & COVID-19 Impact Analysis, By Services (Voice Service, Non-Voice Service, and IT Managed Service), By Fucntion (Finance & Accounting (F & A), Marketing, Procurement, Supply Chain, Human Resource, and Information Technology (IT)), By End-user (Medical, Financial, Government, Audit & Consulting, Corporate, Telecom, and Insurance & Re-insurance), and Regional Forecast, 2021-2028

Region : Global | Format: PDF | Report ID: FBI102430

 

KEY MARKET INSIGHTS

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The global managed services market size was USD 219.59 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with this market witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of 9.8% in 2020 compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 243.33 billion in 2021 to USD 557.10 billion in 2028 at a CAGR of 12.6% in the 2021-2028 period. The rise in compound annual growth rate is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.


In the report, we have studied services offered by market players such as Atos SE offers managed detection and response services, managed security services. Similarly, Fujitsu offers managed infrastructure services, multi-cloud managed services, and Capgemini SE offers application managed services, public cloud managed services, etc. The global market is driven by the rising adoption of these services among enterprises in various sectors such as IT and telecommunications, BFSI, healthcare, among others. Large enterprises are implementing these services in their business units to digitize their business processes, upgrade and innovate their infrastructure, enhance productivity and scalability. In addition to this, the rising demand for end-to-end hosting applications is expected to drive market growth. Further, key Managed Service Providers (MSPs) focus on providing secure and customized IT solutions to their customers by deploying various advanced tools in their business units to safeguard their businesses from any kind of cyber-attack. For instance, according to the report published by the Technology Services Industry Association (TSIA) in 2018, around 81% of the MSPs took leverage of commercial off-the-shelf tools to provide a customized IT solution to their consumers.


Key players operating in the market are adopting various business strategies. In December 2020, Vi Business partnered with Fortinet, Inc. to launch managed security services for enterprises. Such initiatives by key players are further contributing to the growth of the market.  


COVID-19 Impact


Covid-19 to Boost the Demand for Managed Services as Businesses Switch to Cloud Services


COVID-19 pandemic impacted the world economy and forced many enterprises to acknowledge spending cuts and contingency planning in the short term. However, the adoption of cloud applications, AI, security solutions, and Big Data is expected to see a surge in the upcoming years. This growth has allowed the cloud giant to switch its services to deal with the increased load. MSPs are adopting the new norms of working remotely to curb the virus spread.


As the world struggles with the COVID-19 epidemic, businesses enable remote working for most of their workforce. Businesses and government agencies migrate to cloud-based solutions and services for more mission-critical workloads and compute instances. Further, the load on data centers is rising due to the increasing use of IoT, Big Data analytics, and cloud across numerous enterprises as a significant route to digital transformation. This is expected to drive the growth of the global market during the contextual environment of COVID-19.


LATEST TRENDS


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


The increasing adoption of cloud-based services is a major global trend. The increasing demand for securing IT infrastructure against cyber threats pushes organizations to adopt managed security services (MSSs) in their business models. Cyber threats are promptly evolving in both enterprises and government sectors, thus, forcing MSPs to develop advanced offerings that can detect and address cyber risks. Various enterprises are focused on adopting cloud-based managed security services to achieve security against various email viruses, Distributed Denial of Service (DDOS) attacks, firewalls, and intrusion detection. Key players are offering advanced cloud-based security services to cater to rising security needs. For instance, in May 2019, Integrated Telecom Company expanded its security services portfolio by launching a new suite of managed security services (MSS). The managed security services enable various organizations to handle an incident, monitor, manage ongoing cybersecurity risks and threat detection. Therefore, cloud-based managed services will grow in forthcoming years.


DRIVING FACTORS


Growing Adoption of Bring Your Own Device (BYOD) Among Organizations Aid to 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. The BYOD strategy allows workforces to access and manage data through personal devices to improve productivity in the corporate environment. According to a report published by Cisco Systems, Inc., companies favoring the use of BYOD can save up to USD 350 per year, per team member. The usage of BYOD enhances work flexibility and accountability of employees, resulting in higher productivity. This, in turn, has urged the organizations to deploy options for BYOD solutions with the existing systems to create a workforce-friendly environment.


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


RESTRAINING FACTORS


Lack of IT Security Professionals is Inhibiting Factor for Market Growth


The lack of availability of IT and cybersecurity professionals is one of the market limitations for the growth of the market. This deficiency can hinder the organizations’ ability to meet their IT security needs. A lack of valued IT security skills has left 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 cyber-attacks is growing exponentially. This highlights the need for cybersecurity training to help close the cybersecurity skills gap, introduce new talent into the work field, and make the organization more secure.


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


SEGMENTATION


By Services Analysis


IT Managed Services Captured Largest Market Share


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


IT managed services captured maximum market share in 2020. The rising penetration of virtual chat-box services based on AI and IoT platforms and big data is expected to significantly accelerate the growth.


Further, various organizations are implementing voice and non-voice services enabled with virtual chat-box. This strategy assists in managing various functions such as email marketing, human resources outsourcing, marketing, sales, and customer relations service. MSPs focus on providing conversational interfaces such as voice-enabled chatbots into their customer service applications to create an automated workflow. Vendors such as SAP, Microsoft, etc., deployed speech-enabled chatbots options in their service offerings to transform customer service interactions as well as, human resources applications. This service provides ample prospects for sharing information and helps to reduced threats and complications related to cross-organizational workflow management. These features are estimated to boost the demand for IT services.


Additionally, the market growth is primarily driven by the rising spending and adoption of IT outsourcing services among various SMEs and the rising demand for front-end web applications among various end-users. According to International Data Corporation (IDC), in 2018, the total IT outsourcing services spending by small and medium-sized enterprises (SMEs) was around USD 602 Billion, an increase of 4.9% over 2017.


By Function Analysis


Rising Adoption of Managed Services based on Big Data and Cloud is expected to boost the Market Growth


Based on function, the market is divided into finance and accounting (F&A), marketing, procurement, supply chain, human resource (HR), and information technology (IT).


Finance and accounting captured the largest market share. The growth is due to the increasing adoption of services based on big data and cloud applications among various organizations. To support massive amount of online traffic caused by internet services, big data applications are growing. The big data-based services offer users various benefits such as broad certified control, advanced security monitoring, and others. For instance, Deloitte provides procurement consulting services, implementing outsourcing, and offers procurement-related technologies such as Coupa and Ariba based on the public cloud platform and big data capabilities.


Further, procurement is expected to grow with considerable CAGR during the forecast period. The growth is primarily owing to the rise in the number of SMEs operating in this market worldwide. The governments of countries including the U.S., Germany, India, Brazil, Saudi Arabia, and others aim to invest in SMEs' growth. For instance, in 2019, in Lebanon, the government-funded investment was USD 30 million to develop various projects such as Innovative Small and Medium Enterprises (iSME) and others. Thus, the growth of procurement will be high in the near future.


By End-user Analysis


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Corporate Industry is Projected to Exhibit  Strong Market Prospects


Based on the end-user, the market scope includes medical, financial, government, audit & consulting, corporate, telecommunication, and insurance & re-insurance.


The corporate gained the largest market share. The growth of the corporate industry would occur on account of the increased need for these services to manage and maintain highly complex infrastructure.


The financial industry is expected to grow at highest CAGR over the forecast period.


BFSI businesses require a sophisticated IT infrastructure to preserve and manage data ranging from trading instruments to record-keeping, reporting and computations, and more. IT services are critical to the success of financial transactions that require the exchange of information with customers or internally.


In addition, the government sector is predicted to increase at a significant CAGR. The rise in acceptance of IoT solutions among different government projects, such as smart buildings, smart parking, smart transportation, and others, is driving the growth.


REGIONAL INSIGHTS


North America Managed Services Market Size, 2020 (USD Billion)

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


North America is expected to dominate the market by capturing the maximum market share in terms of revenue. The 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 the majority of the North American market, owing to the rising adoption of these services among small and medium-sized enterprises and the provision of substantial IT budgets. Thus, key players in this market are focused on merger and acquisition strategies to prevent cybersecurity breaches. This is creating ample opportunities. For instance, in October 2018, Cisco Systems, Inc. acquired Duo Security for USD 2.35 billion to prevent cybersecurity breaches. Under this acquisition, Cisco users will securely and easily connect any application on networked devices.


Asia Pacific is expected to grow with the highest CAGR during the forecasted period. This region's growth is due to the increasing investments in data security and the rising adoption of cloud-based solutions among several organizations. Fastest growing economies in countries such as China, India, Singapore, Australia, and New Zealand, etc., provide massive opportunities to adopt such managed outsourcing services. Besides, various other managed service providers in this region are developing an integrated cloud storage platform for the banking sector. For instance, in August 2018, ESDS Software Solution launched “Banking Community Cloud” for the banking sector in India. This new service will offer officials cloud-based managed services to address compliance, service, and security norms.


Europe holds a significant position in this market. The growth of the European market is owing to the rising adoption of the cloud platform and the rising demand to manage enterprise data. Key market players in this region are focused on various strategies. For instance, in February 2017, Deloitte launched Managed Threat and Managed Digital Identity Services, which is designed to augment cybersecurity posture and digital transformation of enterprise assets in the region


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Furthermore, the Middle East and Africa, and Latin America are estimated to develop at a considerable rate. This growth is due to the increasing ICT spending, rising government initiatives, the growing trend of big data and analytics, and technological advancement across these regions. For instance, the government of GCC countries is focusing on pursuing pioneering national development projects, such as the UAE’s Vision 2021 and Saudi Arabia’s Vision 2030. These projects help to improve cloud-based services and boost economic diversification through the expansion of the IT infrastructure.


KEY INDUSTRY PLAYERS


Leading Market Players Are Focusing On Strengthening the Market Positioning  


Companies operating in the market such as Fujitsu Ltd., Cisco Systems Inc., IBM Corporation, AT&T Inc., Microsoft Corporation, NOKIA Corporation, Deutsche Telekom AG, Verizon Communications Inc. 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.



  • April 2021 - RACKSPACE TECHNOLOGY, announced a strategic investment in Platform9, a pioneer in SaaS Managed Kubernetes provider, to launch Rackspace Managed Platform for Kubernetes (MPK). Both companies aim to align on products, technology, and go-to-market efforts, driven by a unified multi-cloud vision.

  • March 2020 – Infosys, a leader in digital transformation, collaborated with IBM Corporation to help companies accelerate their digital transformation journey. The collaboration aims to help businesses operating in insurance, healthcare, and financial services transform their enterprise workloads using the IBM public cloud.


LIST OF KEY COMPANIES PROFILED:



  • Fujitsu Ltd. (Tokyo, Japan)

  • Microsoft Corporation (Washington, U.S)

  • NOKIA Corporation (Espoo, Finland)

  • Deutsche Telekom AG​ (Bonn, Germany)

  • Verizon Communications Inc. (New York, U.S)

  • Rackspace Inc.​ (Texas, U.S.)

  • Citrix Systems Inc. (Florida, U.S.)

  • Telefonaktiebolaget LM Ericsson (Stockholm, Sweden)

  • Capgemini SE (Paris, France)

  • Atos SE (Bezons, France)


KEY INDUSTRY DEVELOPMENTS:



  • March 2021 - Amazon Web Services, Inc., a leading technology company, announced AMS Accelerate, a new operations plan to AWS Managed Services (AMS), which provides operations assistance for clients that have existing workloads, are planning new workloads, or are transitioning to AWS. AMS Accelerate helps with day-to-day operations management by monitoring, security, incident management, and backup services.

  • May 2021 – IBM Corporation, a leading technology company, acquired Catalogic ECX, a copy data management company. With this acquisition, IBM aims to offer customers cloud data protection and data security solutions, including CloudCasa, a recently launched data protection service on Kubernetes and cloud.


REPORT COVERAGE


An Infographic Representation of Managed Services Market

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The global managed services market report provides an in-depth analysis of the market. It focuses on key aspects such as leading companies, product Industry, and leading product applications. Besides this, the report offers insights into the managed services 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 over recent years.


Report Scope and Segmentation


















































  ATTRIBUTE



  DETAILS



Study Period



  2017 – 2028



Base Year



  2020



Forecast Period



  2021 – 2028



Historical Period



  2017 – 2019



Unit



  Value (USD billion)



Segmentation



  By Services, Function, End-user, Region



By  Services




  • Voice Service

  • Non-Voice Service

  • IT Managed Service

    • Managed Communication Services

    • Managed Networks & Infrastructure

    • Managed Security

    • Managed Wireless & Mobile Computing

    • Managed Cloud Infrastructure

    • Managed Software as a Service​

    • Others (Managed Print Services, Managed Support Services, Data Analytics, and others.)





By Function




  • Finance & Accounting (F & A)

  • Marketing

  • Procurement

  • Supply Chain

  • Human Resource

  • Information Technology (IT)



By End-user




  • Medical

  • Financial

  • Government

  • Audit & Consulting

  • Corporate

  • Telecom

  • Insurance & Re-insurance



 



By Region



  • North America (By Services, Function, End-user, and Country)

    • U.S. (By End-user)

    • Canada (By End-user)



  • Europe (By Services, Function, End-user, and Country)

    • U.K. (By End-user)

    • Germany (By End-user)

    • France (By End-user)

    • Italy (By End-user)

    • Spain (By End-user)

    • Rest of Europe



  • Asia Pacific (By Services, Function, End-user, and Country)

    • China (By End-user)

    • Japan (By End-user)

    • India (By End-user)

    • Southeast Asia (By End-user)

    • Rest of Asia Pacific



  • The Middle East & Africa (By Services, Function, End-user, and Country)

    • GCC (By End-user)

    • South Africa (By End-user)

    • Rest of Middle East & Africa



  • Latin America (By Services, Function, End-user, and Country)

    • Brazil (By End-user)

    • Mexico (By End-user)

    • Rest of Latin America





Frequently Asked Questions

According to Fortune Business Insights, the global market is expected to reach USD 557.10 billion by 2028.

Fortune Business Insights says that the market stood at USD 219.59 billion in 2020.

The market is expected to grow at a CAGR of 12.6% during the forecast period (2021-2028).

Based on service, the IT managed services is expected to lead the market during the forecast period.

The growing adoption of Bring Your Own Device (BYOD) among organizations is one of the key drivers for market growth.

Fujitsu Ltd., Cisco Systems Inc., IBM Corporation, AT&T Inc., Microsoft Corporation, NOKIA Corporation, Deutsche Telekom AG, Verizon Communications Inc. are the top companies in the market.

The corporate holds the major market share.

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