Managed Services Market by Service Type (Managed Security Service, Managed Network Service, and Managed IT Infrastructure and Data Center Service), Deployment Type (On-premises and Cloud) Vertical and Region - Global Forecast to 2028
The managed services market size is expected to grow from USD 275.5 billion in 2023 to USD 372.6 billion by 2028 at a compound annual growth rate (CAGR) of 6.2% during the forecast period. The managed services market has evolved significantly due to technological advancements, changing business needs, and the increasing complexity of IT environments. It encompasses a broad spectrum of services tailored to meet the demands of diverse industries and sectors. The growth of cloud computing, the need for robust cybersecurity measures, and the rise of remote work have all contributed to the expansion and relevance of the managed services market. As businesses seek efficient ways to manage their operations and leverage specialized expertise, the market for managed services is expected to continue its growth trajectory.
Managed services often involve service level agreements (SLAs) that outline the scope of services, performance metrics, response times, and other terms of the arrangement. These agreements ensure a clear understanding between the client and the MSP regarding the expectations and responsibilities associated with the managed services. Moreover, the key characteristic of managed services is that they offer organizations the opportunity to offload non-core tasks and operational duties to external experts. This allows the client organization to focus on its core competencies, strategic initiatives, and innovation. At the same time, the MSP handles day-to-day operations, maintenance, and support related to the outsourced services.
By vertical, the healthcare & life sciences segment holds the highest CAGR during the forecast period.
The managed services market by vertical is divided into BFSI, IT & telecom, manufacturing, retail & consumer goods, healthcare & life science, energy & utilities, government, media & entertainment, and other verticals. The healthcare & life sciences segment is estimated to grow at the highest CAGR during the forecasted managed services market. Managed services play a critical role in the healthcare and life sciences by offering tailored solutions to address this sector’s unique complexities and demands. Managed services provide several key benefits that enhance operational efficiency, patient outcomes, and data security in an environment characterized by rapid technological advancements, stringent regulations, and the imperative to provide quality patient care. Firstly, managed services enable healthcare organizations to focus on delivering medical services, research, and patient care while outsourcing non-core functions like IT management, data analytics, and compliance. Outsourcing IT services improves resource allocation, streamlined operations, and enhanced patient experiences. Secondly, data security and privacy are paramount in healthcare due to the sensitive nature of patient information. Managed security services offer robust solutions for HIPAA compliance, real-time monitoring, and rapid response to potential breaches, safeguarding patient data and maintaining the trust of patients and stakeholders.
Furthermore, the healthcare and life sciences industry is transforming digitally by adopting electronic health records (EHRs), telemedicine, and data-driven diagnostics. Managed services provide expertise in implementing and managing these technologies, ensuring seamless integration, data accuracy, and optimized clinical workflows. In an era of cost containment, managed services offer cost-effective solutions. Healthcare organizations can achieve greater operational efficiency and reduce overhead costs by outsourcing tasks like IT infrastructure management and system maintenance.
Based on managed security services, the managed IAM segment holds the largest market share during the forecast period.
The managed services market, by managed security service, is segmented into managed IAM, managed antivirus/antimalware, managed firewall, managed risk and compliance management, managed vulnerability management, managed SIEM, managed IDS/IPS, managed UTM, managed encryption, and other managed security services. The managed identity & access management (IAM) segment is expected to hold the largest market share during the forecast period. Managed identity and access management (IAM) plays a crucial role in managed security services by focusing on control and secured user access to various resources within an organization’s IT environment. It is a specialized segment that ensures the right individuals have appropriate access to suitable systems and data while enforcing security measures to prevent unauthorized access and potential data breaches. Managed IAM allows users access to specific resources based on their roles, responsibilities, and the principle of least privilege. Managed IAM services minimize the risk of unauthorized access to sensitive data and critical systems. IAM solutions manage user authentication, implementing secure and reliable methods such as multi-factor authentication (MFA) to verify users’ identities. This reduces the risk of unauthorized access resulting from stolen or compromised credentials.
Moreover, managed IAM handles user onboarding and offboarding, ensuring timely access for new employees and revoking access for departing ones. Managed IAM also helps maintain an up-to-date and secure access control environment. IAM is crucial in enforcing compliance with internal policies and external regulations. It allows organizations to track user activities, monitor access patterns, and maintain audit logs for compliance reporting.
Based on deployment type, the cloud segment holds the highest CAGR during the forecast period.
The managed services market, by deployment type, is segmented into on-premises and cloud. The cloud segment is estimated to grow at the highest CAGR during the forecasted managed services market. The cloud deployment type segment plays a pivotal role in the managed services market by offering organizations a flexible, scalable, and cost-effective approach to outsourcing their IT infrastructure, applications, and services to cloud service providers. Cloud deployment has revolutionized how businesses manage their technology needs, providing opportunities for efficiency, innovation, and adaptability while presenting unique challenges and benefits. Cloud deployment allows organizations to scale their resources up or down based on demand quickly, enabling agility and avoiding the constraints of fixed on-premises infrastructure. Cloud solutions eliminate the need for upfront investments in hardware and reduce ongoing maintenance costs. Organizations pay for what they use, leading to cost predictability and potential savings. Cloud-based managed services can be accessed from anywhere via an internet connection, facilitating remote work, collaboration, and real-time access to data and applications.
Moreover, cloud services can be provisioned quickly, reducing the time to deploy new applications or services. This agility accelerates innovation and time-to-market. Further, cloud providers often handle software updates, security patches, and maintenance, relieving organizations of managing these tasks themselves.
Breakdown of primaries
In-depth interviews were conducted with Chief Executive Officers (CEOs), innovation and technology directors, system integrators, and executives from various key organizations operating in the managed services market.
By Company: Tier I: 40%, Tier II: 25%, and Tier III: 35%
By Designation: C-Level Executives: 25%, Director Level: 37%, and Others: 38%
By Region: North America: 42%, Europe: 24%, Asia Pacific: 18%, Rest of World: 16%
Some of the significant managed services market vendors are IBM (US), Fujitsu (Japan), Accenture (Ireland), Atos (France), Cisco (US), DXC (US), TCS (India), Rackspace (US), AT&T (US), Verizon (US), Dimension Data (South Africa), Infosys (India), HCL (India), Ericsson (Sweden), and GTT Communications (US)NTT Communications (Japan), and Digital Reality (US).
The market study covers the managed services market across segments. It aims at estimating the market size and the growth potential across different segments, such as service types, managed security service, managed network service, managed IT infrastructure and data center service, managed communication and collaboration service, managed mobility service, managed information service, verticals, deployment types, and regions. It includes an in-depth competitive analysis of the key players in the market, their company profiles, key observations related to product and business offerings, recent developments, and key market strategies.
Reasons to buy this report:
The report will help the market leaders/new entrants with information on the closest approximations of the revenue numbers for the overall managed services market and the subsegments. This report will help stakeholders understand the competitive landscape and gain more insights to position their businesses better and plan suitable go-to-market strategies. The report also helps stakeholders understand the market pulse and provides information on key market drivers, restraints, challenges, and opportunities.
The report provides insights on the following pointers:
Analysis of key drivers (Increasing adoption of cloud-managed services contributes to market growth, Lack of skilled IT professionals, growth in adjacent markets such as cloud computing, Cost and risk reduction), restraints (Lack of IT security professionals may inhibit market growth, Increase in regulations and compliances), opportunities (Changing work environments, Surge in adoption of cloud), and challenges (Lack of sales and marketing staff, training, and cybersecurity to severely affect the Growth of MSPs, Increased competition can lead to pricing pressures) influencing the growth of the managed services market.
Product Development/Innovation: Detailed insights on upcoming technologies, research & development activities, and new product & service launches in the managed services market.
Market Development: Comprehensive information about lucrative markets – the report analyses the managed services market across varied regions.
Market Diversification: Exhaustive information about new products & services, untapped geographies, recent developments, and investments in the managed services market.
Competitive Assessment: In-depth assessment of market shares, growth strategies, and service offerings of leading players, including IBM (US), Fujitsu (Japan), Accenture (Ireland), Atos (France), and Cisco (US), among others in the managed services market.