Global Managed Services Market By Solution (Managed Data Center, Managed Network, Managed Mobility, Managed Infrastructure, Managed Backup and Recovery, Managed Communication, Managed Information, and Managed Security), By Enterprise Size (Small & Medium Enterprises and Large Enterprises), By Managed Information Service (Business Process Outsourcing, Business Support Systems, Project & Portfolio Management, and Other Services), By Deployment, By End-Use, By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032

Report Overview

The global managed services market is valued at USD 278.9 Bn In 2022 and is expected to reach USD 834.7 Bn in 2032, with a CAGR of 11.9% from 2023 to 2033.

The term “managed services market” describes the process of outsourcing out specific business or IT operations to a different service provider. These services are normally offered via subscription, and the supplier is in charge of their continuing administration and upkeep. A broad range of IT operations, such as data backup and recovery, network and security management, software as a service (SaaS) offerings, and helpdesk and support services can be included in managed services.

AI, machine learning and IoT technologies have played a pivotal role in increasing adoption of managed services across industries. As organizations strive to enhance operational efficiencies while streamlining IT infrastructures, managed services demand is expected to experience dramatic expansion. Increased data management and security challenges are fuelling the rise in adoption of managed security services across various sectors, while outsourcing of management functions to cloud service providers and managed service providers will continue to expand this market in coming years, particularly meeting SMEs’ evolving needs.

Note: Actual Numbers Might Vary In The Final Report

As the market shifts toward hosted deployment solutions and enterprise cybersecurity becomes an increasing focus for business operations, managed services are poised for significant development and transformation; making them an indispensable component for maintaining an edge in today’s digitalized environment.

Key Takeaways

• The Managed Services Market was valued at USD 278.9 billion in 2022 and projected to reach an expected total market size of USD 834.7 billion by 2032 – at a compound annual growth rate of 11.9% between 2023-2033.
• In 2022, the Managed Data Center segment held the highest revenue share within the Managed Services Market with 17.3% and projected compound annual growth rates of 10.6% during its forecast period.
• The Managed Security Solution segment is projected to experience the fastest compound annual compound annual growth between 2023-2033. It is projected to experience compound annual compounding rates of 11.2% annually.
• Large Enterprises dominate the market in terms of enterprise size, commanding 54.6% in 2022 with an anticipated compound annual growth rate of 10.4% over their forecasted period.
• Business Process Outsourcing (BPO) dominates the Managed Information Service segment with 37.4% market share as of 2022 and an expected compound annual growth rate of 10% during its forecast period.
• On-premise deployment represent the highest revenue share of the Managed Services Market at 67.2% in 2022 and an anticipated compound annual growth rate of 10.9% during its projected forecast period.
• BFSI (Banking, Financial Services and Insurance) holds the largest revenue share among End-Use segments for Managed Services Market, at 18% in 2022 with an expected compound annual compound growth rate of 11.6% over its forecast period.
• North America is estimated to be the most lucrative market in the global Managed Services Market, with the largest market share of 36.6% in 2022 and a projected CAGR of 10.6% during the forecast period.
• Asia-Pacific is expected to be the fastest-growing region in the Managed Services Market, with a projected CAGR of 11.2% during the forecasted period.
• Some of the key players in the market include International Business Machines Corporation, Accenture PLC, Alcatel-Lucent Enterprise, AT&T Inc., Avaya Inc., Ericsson, Fujitsu Limited, Lenovo Group Limited, BMC Software, Inc., CA Technologies, and Cisco Systems, Inc.

Driving Factors

The complexity of IT Environments, Cost Savings, and Focus on Core Competencies Drive the Managed Services Market.

One of the major forces driving the managed services market is the complexity of IT environments becoming ever-more complicated. Organizations frequently struggle to manage and maintain these complex settings as they adopt new technologies like big data, cloud computing, and the Internet of Things.

Organizations can get assistance from managed service providers in navigating these difficulties and making sure their IT systems are functioning properly. Additionally, managed services can help businesses save a lot of money. Organizations can save money by outsourcing specific IT tasks to a third-party source rather than hiring and training their in-house IT workers. The costs related to downtime and other IT difficulties can be decreased with the use of managed services.

Many businesses want to concentrate on their core capabilities while contracting out non-essential operations, including IT management, to outside companies. This enables businesses to concentrate on what they do best while leaving IT system maintenance to the professionals.

Restraining Factors

Data Security Concerns, Limited Control Over IT Systems, and Difficulty in Finding the Right Provider  Are the restraints In the Growth of the Market.

Data security is one of the main issues that organizations have while outsourcing IT activities. Data breaches and cyber-attacks are always a possibility, even though managed service providers frequently have a strong focus on security and compliance. Organizations can be more reluctant to outsource IT tasks that deal with sensitive data as data becomes more valuable.

Organizations may feel as though they are losing control of their IT systems when outsourcing IT services to a managed service provider. For organizations with stringent governance and compliance needs, this can be very worrisome. Finding the best-managed services provider can be challenging for businesses due to the number of available options.

The wrong provider selection can result in poor service, higher expenses, and other problems. Organizations may find it challenging to compare services and suppliers due to the lack of market standardization in the managed services sector. This may confuse and make it more difficult for businesses to choose the best-managed services.

By Solution Analysis

The Managed Data Center Segment Accounted for the Largest Revenue Share in Managed Services Market in 2022.

Based on the solution, the market is segmented into managed data centers, managed networks, managed mobility, managed infrastructure, managed backup and recovery, managed communication, managed information, and managed security. Among these types, the managed data center is expected to be the most lucrative in the global managed services market, with the largest revenue share of 17.3% in 2022 and a projected CAGR of 10.6% during the forecast period.

Managed data centers, provide businesses with a number of advantages such as lower costs, increased dependability, scalability, flexibility, security, compliance, and 24/7 support. Organizations can concentrate on their core business while leaving the management and maintenance of their IT systems to professionals by outsourcing their IT infrastructure and equipment to a third-party company that operates and maintains the data center facilities.

The Managed Security Segment is Fastest Growing Solution Segment in Managed Services Market.

The managed security segment is projected as the fastest-growing solution segment in managed services market from 2023 to 2033 forecasted to increase at a CAGR of 11.2%. Cyber risks are avoided, found, and remedied through managed security services, which actively monitor and manage an organization’s security posture.

Security solutions including threat detection and response, vulnerability management, compliance monitoring, and security consultancy are all provided by managed security services providers (MSSPs). MSSPs leverage cutting-edge technology like automation, machine learning, and artificial intelligence (AI) to detect risks promptly and take appropriate action.

Note: Actual Numbers Might Vary In The Final Report

By Enterprise Size Analysis

The Large Enterprises Hold the Significant Share of the Enterprise Size Segment in Managed Services Market.

Based on enterprise size, the market is divided into small & medium enterprises and large enterprises. Among these, the large enterprise segment is dominant in the enterprise size segment in the managed services market, with a market share of 54.6% in 2022 and a CAGR of 10.4% during the forecasted period.

Large businesses can benefit from managed services in a variety of ways, including cost savings, increased agility, and improved operational effectiveness. Large businesses frequently have complicated IT setups and wide-ranging data networks, which are difficult to properly manage without specialized knowledge and funding.

Network monitoring, help desk support, data backup and recovery, and cybersecurity are just a few of the services that managed services providers (MSPs) provide. These services can help major businesses optimize their IT operations and lighten the load on their internal IT teams.

Small & Medium Enterprises are Fastest Growing Enterprise Size Segment in Projected Period.

Small & medium enterprises are also important enterprise size segments in managed services market and it is expected to grow faster with a CAGR of 10.5% in 2022. SMEs often have constrained internal IT budgets and resources; therefore, managed services are a desirable choice for satisfying their technological requirements.

Managed services providers (MSPs) provide a variety of services, including network monitoring, data backup and recovery, help desk support, and cybersecurity, that can assist SMEs in managing their IT operations. SMEs can free up internal resources and concentrate on their main company operations by outsourcing these tasks to an MSP. The scalability and flexibility of managed services are also advantageous to SMEs. MSPs can quickly adjust to shifting business requirements, adding or eliminating services as needed to satisfy the needs of SMEs.

By Managed Information Service Analysis

The Business Process Outsourcing Holds the Largest Market Share in Managed Information Service Segment in Managed Services Market.

Based on managed information services, the market is divided into business process outsourcing, business support systems, project & portfolio management, and other services. Among this, the business process outsourcing segment is dominant in managed information service segment in the managed services market, with a market share of 37.4% and a CAGR of 10% in 2022.

BPO may include a number of procedures, including supply chain management, accounting, and customer service. BPO managed services providers (MSPs) can provide their clients with a variety of solutions to improve business processes and aid in the accomplishment of their strategic objectives. BPO MSPs frequently have specialized knowledge in particular industries or procedures. They can offer their clients specialized solutions that are tailored to their particular business demands thanks to their knowledge.

Project & Portfolio Management are Fastest Growing Managed Information Service Segment in Projected Period.

Project & portfolio management is expected to fastest growing segment in the managed services market with a CAGR of 10.2% in 2022. PPM services are often provided by managed services providers who specialize in project management approaches including Agile, Waterfall, and Scrum as well as project management tools and software. From the beginning to the end of a project, MSPs may support Organizations by assisting with planning, scheduling, budgeting, resource allocation, risk management, and quality assurance.

By Deployment Analysis

The On-premise Segment Accounted for the Largest Revenue Share in Managed Services Market in 2022.

Based on deployment, the market is segmented into on-premise and hosted. Among these types, the on-premise is expected to be the most lucrative in the global managed services market, with the largest revenue share of 67.2% and a projected CAGR of 10.9% during the forecast period.

A strategy for deployment known as “on-premise deployment” in the managed services sector comprises setting up and maintaining IT infrastructure and applications on a company’s actual premises. In this approach, the managed services provider (MSP) deploys and administers the hardware and software inside the business’s own data center or server room as opposed to using a cloud-based solution.

On-premise deployment may be a desirable solution for businesses with stringent security and regulatory requirements, significant levels of customization and control needed over their IT infrastructure, or both. With the help of an MSP’s knowledge and assistance, this deployment strategy enables Organizations to maintain total control over their data and IT infrastructure.

The Hosted Segment is Fastest Growing Deployment Segment in Managed Services Market.

The hosted segment is projected as the fastest-growing deployment segment in managed services market from 2022 to 2031 forecasted to increase at a CAGR of 11.5%. In the managed services sector, the term “hosted deployment” refers to hosting and managing IT tools and applications on a server or in the cloud.

Clients can access resources remotely because of the managed services provider (MSP), who manages and deploys hardware and software in their data center or cloud. Businesses that wish to keep control of their data and IT systems while avoiding the upfront expenditures and continuing maintenance requirements associated with on-premise implementation may consider hosted deployment. Businesses can take advantage of the scalability and dependability of cloud-based systems by using this deployment technique in conjunction with the knowledge and assistance of an MSP.

By End-Use Analysis

The BFSI Segment Accounted for the Largest Revenue Share in Managed Services Market in 2022.

Based on end-use, the market is segmented into BFSI, government, healthcare, IT & telecom, manufacturing, media & entertainment, retail, and other end-use industries. Among these types, the BFSI is expected to be the most lucrative in the global managed services market, with the largest revenue share of 18% and a projected CAGR of 11.6% during the forecast period.

The BFSI sector (Banking, Financial Services, and Insurance), is one of the largest end-users in the IT industry. BFSI is always implementing new technologies to stay ahead of the competition, given the growing need for reliable and secured financial services. Managed services are a great solution for the BFSI sector. They offer solutions such as infrastructure and network management, security management, and application management.

These services help the BFSI industry operate more efficiently, spend less money and provide better customer service. Managed services also provide 24/7 supervision and assistance which is vital for the BFSI sector to ensure uninterrupted customer service.

The Retail Segment is Fastest Growing End-Use Segment in Managed Services Market.

The retail segment is projected as the fastest-growing end-use segment in managed services market from 2022 to 2031 forecasted to increase at a CAGR of 10.3%. Another big end-user of managed services in the IT sector is the retail sector.

Retailers are looking for ways to enhance their business operations and customer experience while cutting costs as a result of the growth of e-commerce and rising competition. Supply chain management, inventory management, customer relationship management, and point-of-sale management are just a few of the issues that managed services may help the retail sector with.

These services support merchants in streamlining their operations and enhancing their general effectiveness. Managed services also offer data analytics and insights that support retailers in making defensible choices regarding their business plans.

Key Market Segments

Based on Solution

• Managed Data Center
• Managed Network
• Managed Mobility
• Managed Infrastructure
• Managed Backup and Recovery
• Managed Communication
• Managed Information
• Managed Security

Based on Enterprise Size

• Small & Medium Enterprises
• Large Enterprises

Based on Managed Information Service

• Business Process Outsourcing
• Business Support Systems
• Project & Portfolio Management
• Other Services

Based on Deployment

• On-premise
• Hosted

Based on End-Use

• BFSI
• Government
• Healthcare
• IT & Telecom
• Manufacturing
• Media & Entertainment
• Retail
• Other End-Use Industries

Growth Opportunity

Cloud-based Managed Services, Cybersecurity, and Data Protection are some Opportunities in the Managed Services Market.

Solutions like threat detection and response, vulnerability management, and identity and access management are all included in managed security services. The need for managed services is being driven by the growing complexity of IT systems and the talent gap in the field. Organizations are seeking ways to reduce expenses and downtime while improving the efficiency of their IT operations. A variety of solutions, such as network and infrastructure management, application management, and service desk support, are offered by managed services.

The growing desire for digital transformation is another factor driving the demand for managed services. To stay up with changing business requirements and maintain their competitiveness in the market, Organizations are attempting to modernize their IT systems and processes. Industry-specific solutions are being developed by managed service providers to meet the particular needs and problems of various industries. This is fueling the demand for managed services in particular sectors including banking, retail, and the healthcare industry.

Latest Trends

AI and Automation, Multi-Cloud Management, and Managed Security Services are Some Latest Trends in the Managed Services Market.

Managed service providers are increasingly using automation and AI to enhance their offerings and better serve their clients. Automation may eliminate manual processes and increase efficiency, while AI-powered tools can assist discover and fix problems more quickly. Managed services providers are creating solutions that can manage and optimize workloads across several cloud platforms in response to the increasing usage of multi-cloud settings.

By doing this, businesses can minimize their spending on cloud services and avoid vendor lock-in. The rise in cyber risks and data breaches has increased the demand for managed security services. Solutions including threat detection and response, vulnerability management, and identity and access management are offered by managed security services. Edge computing is becoming more and more significant as a result of the development of IoT and the requirement for real-time data processing.

To increase productivity and lower latency, managed services providers are creating systems that can control edge devices and process data there. DevOps practices are becoming more widely used, and managed service providers are now providing DevOps services to assist businesses in streamlining their software development and deployment procedures. This aids businesses in enhancing the timeframe and caliber of their software supply.

Regional Analysis

North America Accounted for the Largest Revenue Share in Managed Services Market in 2022.

North America is estimated to be the most lucrative market in the global managed services market, with the largest market share of 36.6%, and is expected to register a CAGR of 10.6% during the forecast period. Due to the widespread use of cloud-based services and the demand for cybersecurity solutions, North America is the region with the greatest market for managed services. Major players’ presence in the area also aids in its development.

Asia-Pacific is Expected as Fastest Growing Region in Projected Period in Managed Services Market.

Asia-pacific is expected as the fastest growing region in the forecasted period for the managed services market with a CAGR of 11.2%. The usage of digital technologies is expanding, there is a growing requirement for cybersecurity solutions, and there is an expanding need for IT optimization.

Note: Actual Numbers Might Vary In The Final Report

Key Regions and Countries Covered in this Report:

• North America
  • The US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Russia
  • Netherland
  • Rest of Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • New Zealand
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

Key Players Analysis

With several big and small suppliers offering a wide range of services, the managed services market is extremely competitive. Some of the key players in the market, in addition to several smaller vendors and startups, include IBM, Accenture, Hewlett Packard Enterprise, Cisco Systems, and Microsoft. To diversify their service portfolios and geographic reach, bigger providers frequently acquire smaller businesses in the market.

Market Key Players

• International Business Machines Corporation
• Accenture PLC
• Alcatel-Lucent Enterprise
• AT&T Inc.
• Avaya Inc.
• Ericsson
• Fujitsu Limited
• Lenovo Group Limited
• BMC Software, Inc.
• CA Technologies
• Cisco Systems, Inc.
• Other Key Players

Recent Developments

• In January 2023, IBM disclosed that it had purchased Turbonomic, a cloud management tool. Through the acquisition, IBM will be able to offer more cloud management services and manage hybrid cloud settings better.
• In November 2022, Lixto, a provider of data analytics, was bought by Accenture, according to an announcement. Accenture will be able to improve its analytics skills and give its clients better insights thanks to the acquisition.

Report Scope