Managed Services Industry Overview
The global managed services market size was valued at USD 239.71 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 13.4% from 2022 to 2030.
The outbreak of the COVID-19 pandemic, which has triggered the need for business automation as businesses aggressively resort to remote working, can be attributed to the growth. According to an IDG report commissioned by NTT Ltd., nearly 55% of companies are approaching managed service providers to opt for their value-added services and reduce security risks, which have multiplied since the pandemic's outbreak as employees work remotely and business partners and customers rely entirely on electronic communication. These trends are expected to create enormous growth opportunities for managed service providers in the short and long term.
Managed services help businesses improve operational efficiency and reduce operating expenses while allowing them to focus more effectively on core competencies. Managed services ensure optimal resource distribution and utilization and subsequently help in augmenting the overall profitability and improving operational efficiency. Scalable infrastructure and flexible managed services models are particularly making it easier for businesses to respond to technological advances. All such factors are expected to drive the market's growth over the forecast period.
Gather more insights about the market drivers, restraints, and growth of the Global Managed Services Market
Managed services involve outsourcing management functions to a third party to advance business operations. The introduction of cloud-based technologies and their technological proliferation have led to managed services. Managed services assist businesses in improving operational efficiency and cutting down companies' operating expenses. The growing preference for outsourcing management functions to cloud service providers and managed service providers is anticipated to drive the growth of the market over the forecast period.
The outbreak of the COVID-19 pandemic is particularly prompting businesses to put a strong emphasis on remote working. The adoption of cloud services has particularly increased as businesses remain keen on ensuring business continuity during the lockdowns imposed by various governments as part of the efforts to contain the spread of corona virus. Most companies are already renewing their contracts with managed cloud service providers in anticipation of cloud migration getting more common among enterprises, and in some cases, even gaining traction. Furthermore, businesses and organizations were putting a strong emphasis on adopting the latest technologies, such as machine learning and augmented reality, along with their existing IT infrastructure as part of the efforts to encourage digital transformation.
Adoption of the latest technologies such as Artificial Intelligence (AI), cloud management, and others is eventually helping organizations meet various functional business requirements while driving business process optimization. Managed services deliver effective functionalities at minimal costs without compromising on quality. Additionally, managed services also support and ensure the reliability and consistency of services offered for various business processes.
However, a lurking lack of knowledge and experience in integrating new technologies and implementing managed services is expected to limit the managed services market's growth over the forecast period. Other factors, such as concerns about the efficacy of managed services models, concerns about data security and privacy protection, and the need for skilled resources, among others, are expected to limit market growth to some extent.
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Market Share Insights
July 2021 - Accenture acquired Cloudworks, an Oracle Cloud implementation services provider in North America. The acquisition would help the former company expand its reach in Canada by providing Oracle solutions to the client.
November 2019: DXC Technology Company launched a new cloud solution named DXC Managed Multi-Cloud Services. The new solution is powered by VMware, which provides consistent service management and enables users to maximize investments in VMware to take a multi-cloud competitive advantage.
Key Companies profiled:
Some prominent players in the global Managed Services market include
- Accenture PLC
- Alcatel-Lucent Enterprise
- AT&T Inc.
- Avaya Inc.
- BMC Software, Inc.
- CA Technologies
- Cisco Systems, Inc.
- DXC Technology Company
- Ericsson
- Fujitsu Limited
- Hewlett Packard Enterprise Development LP
- International Business Machines Corporation
- Lenovo Group Limited
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