Europe Managed Infrastructure Services Market - Growth, Trends and Forecasts (2020 - 2025)

Europe Managed Infrastructure Services Market - Growth, Trends and Forecasts (2020 - 2025)

The Europe Managed Infrastructure Services Market was valued at USD 17.18 billion in 2019, and it is expected to reach USD 32.65 billion by 2025, registering a CAGR of 11.2% during 20202025. Managed services are making steady progress in a conservative, traditionfocused channel landscape in Europe. The onpremise deployment model is typically favored by customers who are financial service providers, healthcare service providers, and government bodies. On the other hand, the onpremise services confer only maintenance costs. However, according to Spiceworks, 15% of the European businesses are investing in IT and expanding budgets, owing to the recent corporate tax cut. By 2020, 33% of the IT budget allocation in the region is expected to be for hardware and 15% for managed services. Whenever the data security is paramount for the client, the services are deployed onpremise.

Cost and operational efficiency realized through outsourcing are driving the market. One of the primary reasons for outsourcing is the cost benefits offered by MSPs in the market. MSPs help set up the infrastructure, which commands a lot of hidden costs, such as setting up costs, maintenance costs, and upfront expenditures. Further, the benefits offered by cloudbased managed services provide significant cost reductions for enterprises operating in different industries. For example, Quandry, a Manhattanbased financial services firm, opted for a private cloud solution from Unitas Global; after an internal ROI analysis, the firm found that after the completed buildout and with the infrastructure up and running, it saved 20% by not completing the task themselves.
Increasing focus on outsourcing of noncore IT Hardware Operations drives the market. A significant share of employees spends their time performing various noncore activities that could be utilized for business expansion and coreactivities. According to a study by AtTask and Harris Poll, employees spent nearly 40% of their day performing administrative tasks, a relatively large portion of their day performing repetitive tasks that could be easily outsourced. Also, according to the National Outsourcing Association, 70% of companies are planning to increase their outsourcing activity in 2020. None of the businesses are willing to reduce their scope of IT services, which is outsourced significantly. As a result, the demand for outsourcing noncore business activities, such as IT hardware operations, spearheads the growth of managed services.
Furthermore, as COVID19 is influencing the global economy, enterprises that provide technology solutions for severely impacted business verticals, such as travel, retail, entertainment, and hospitality, are seeing negative impact; whereas, businesses that offer remote working solutions are seeing significant growth. According to a study by TSIA, the forecast demand for remotely delivered services saw an increase of over 50% among the survey respondents. The early sentiment for managed services seems positive compared to other service offerings in the market.
Also, various cloudmanaged service providers offer easy migration and free services for specific periods to take advantage of the growing demand to expand their market presence. For instance, XenonStack is offering free three months managed IT support, migration, and application management as part of its COVID19 response plan program to businesses that are directly involved in critical industries, such as NGOs, healthcare, and government bodies.

Key Market Trends

Small and Medium Enterprises to Witness Significant Growth

Small and Medium Enterprises (SMEs) are shifting toward managed infrastructure service providers to get standardized and costefficient services, which allows them to focus on their core business while minimizing the risk, increasing infrastructure uptime, and gaining access to newer technologies.
Over the coming years, the adoption of cloudbased services among SMEs is expected to gain traction. The region is home to over 25 million SMEs, which are focusing on the digitalization of their operations and business process. Moreover, migration from private to the public cloud is expected to be a preferred choice amongst businesses due to lower costs and increased convenience. The usage of public cloud is expected to increase at a faster rate compared to private cloud usage.
Technology trends, such as analytics, Cloud, IoT, and Cognitive Computing, are creating new business imperatives. With the growing demand from enterprises, various companies, including HC (Host Color), in 2019, launched a managed cloud infrastructure service. The managed services are available with public cloud servers, hybrid cloud, and hosted private cloud. Managed clouds infrastructure include installation of Linux or Windowsbased operating system, regular maintenance and updates of software programs and applications, the configuration of the Public or a Private Cloud environment to the client’s settings, 24/7/365 security updates, antivirus, and antispam protection, reboots, Cloud instance recovery, and data backups.
Further, Xerox is increasingly spreading its presence in the European print services market, and it holds a prominent share of the market. However, its acquisition attempt of HP fell apart during the first quarter of 2020. The company has been aggressively moving in the region's print services market from the beginning of 2019. For instance, in January 2020, Xerox acquired the managed print service provider, Arena Group, to expand its market presence in the region. This is expected to enhance the company's position in the print services market and expand its offerings to SMEs.
Also, the UK government set the budget for technology. A portion of the budget is spent to support SMEs. Additionally, the UK government wishes the SMEs to benefit from 33% of the central government’s procurement budget, either directly or indirectly, via the supply chain, by 2022. However, in 2018, the total expenditure for SMEs was 23.7%.
Also, according to Eurostat’s report published in December 2018, the percentage of SMEs operating in EU28 in the five key sectors, such as wholesale/retail trade, manufacturing, business services, construction, and accommodation/food services, stood at 26.3%, 8.8%, 19.2%, 14.3%, 8%, and 23.1%, respectively.
Further, the outbreak of the pandemic virus across the region has enabled a few organizations to offer services at low prices. For instance, the French cloud infrastructure provider OVHcloud is providing access to its infrastructureasaservice (IaaS) platform for free to any companies that are working in solidarity with one another during the pandemic, offering remote working, collaboration, and healthcare hosting services. Such initiatives are anticipated to benefit the SMEs, as they have tight funds for deploying outsourced services.

Server and Storage Solutions Accounts for the Significant Market Share

Various countries in Western Europe are heading fast toward digitalization, with the increasing investment in the IT infrastructure aspect and cloud computing. With the advent of digital transformation in recent years, the use of hybrid cloud has become essential in driving businesses.
Organizations across Europe have embraced the cost benefits of cloud computing. They are increasingly using cloud technology to devise and implement new, innovative projects and approaches. For instance, in Europe, Porsche Holding is driving its digital initiatives at its workplaces by adopting Microsoft 365 productivity cloud.
Further, in October 2019, NTT Ltd, announced the launch of a new cloud platform in Paris, which is aimed at midsized enterprises in France that are pursuing a hybrid IT and multicloud strategy to run their chosen workloads in optimal environments. The new platform would deliver multinational corporations a truly global presence, including Europe, presenting significant advantages in advancing their digital transformation journeys.
Further, developments across SMEs and large enterprises are augmenting the demand for managed infrastructure services in Europe. The cloud adoption rate in the region is expected to affect the cloud deployment mode of the services. According to Eurostat, just 26% of the region's enterprises are using the cloud, and a significant share of it is large enterprises. ​
Furthermore, government initiatives have augmented the need for server and storage maintenance. For instance, the European Commission has adopted a new cloud strategy. This cloud strategy shapes the future of IT within an organization and is an essential milestone in the delivery of the European Commission Digital Strategy, adopted in November 2018. Additionally, this strategy elaborates on how the cloud affects digital solutions, data ecosystems, digital workplaces, and IT infrastructure, among others.
Fujitsu Ltd is one of the prominent vendors in the server and storage space, others being Cisco, Dell, etc. Fujitsu’s MultiCloud and Hybrid IT portfolio helps customers become highly connected and transformed. This is achieved through the simultaneous advancement of infrastructure, applications, and services.
Managed server solutions that include monitoring, patching and trouble resolution for the physical and virtualized servers continue to gain momentum as various businesses seek to handle their distributed data centers. In December 2019, HCE established its 21st point of presence (POP) in Europe. It has started provisioning Dedicated Server Hosting and Cloud services from the Barcelonabased data center.

Competitive Landscape

The Europe Managed Infrastructure Services Market is fragmented as various prominent players are increasingly innovating their solutions and have access to innovative hardware solutions that are developed inhouse. Also, the service providers in the market are increasingly launching new solutions which cater to the market growth. Key players are Fujitsu Limited, Dell Technologies Inc., etc. Recent developments in the market are

March 2020 Ricoh announced that it passed a new rigorous security validation testing program that was initiated by Keypoint Intelligence, Buyers Lab, the industry’s leading authority in hardcopy device testing and research. Primarily targeting the connected MFPs and printers, the program establishes industrystandard benchmarks in the areas of device penetration, policy compliance, and firmware resilience.
February 2020 Dell Technologies announced new advancements to Dell Technologies Cloud and additionally inclusion of subscription model for as low as USD 70/node per day thereby easing the process of buying and scaling of hybrid cloud deployments and is offered with its infrastructure services hence leveraging and accelerating its customers cloud deployments and simplifying IT operations.

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1 INTRODUCTION
1.1 Study Assumptions​ and Market Definition
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis​​
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Stakeholder Analysis
4.4 Impact of COVID-19 on the Market
4.5 Major Industry Regulations and Standards
4.6 Analysis of the Various Distribution Channels for MSP’s
4.7 Europe Managed Services – Market Outlook
4.8 MSP Deployment Trends
4.9 Market Drivers
4.9.1 Cost and Operational Efficiency Realized Through Outsourcing
4.9.2 Growing Adoption from SMEs
4.9.3 Increasing Focus on Outsourcing of Non-core IT Hardware Operations
4.10 Market Restraints
4.10.1 Operational and Regulatory Concerns Faced by MSP’s
4.11 Market Opportunities​
5 MARKET SEGMENTATION
5.1 Organization Size
5.1.1 Small- and Medium-scale
5.1.2 Large-scale
5.2 Service Type
5.2.1 Servers and Storage Solutions
5.2.2 Print and Document
5.2.3 Desktop
5.2.4 Other Services
5.3 Country
5.3.1 Germany
5.3.2 United Kingdom
5.3.3 France
5.3.4 Spain
5.3.5 Netherlands
5.3.6 Italy
5.3.7 Rest of Europe
6 COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 Fujitsu Limited
6.1.2 Dell Technologies
6.1.3 Canon Inc.
6.1.4 Hewlett Packard Enterprise
6.1.5 Toshiba Corporation
6.1.6 Ricoh Company Limited
6.1.7 Konica Minolta Inc.
6.1.8 Lexmark International
6.1.9 IBM Corporation
6.1.10 Hetzner Online GmbH
7 LIST OF MAJOR PURE-PLAY MSP’S IN EUROPE
8 MARKET OPPORTUNITIES AND FUTURE TRENDS

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