DUBLIN, July 26, 2021--(BUSINESS WIRE)--The "Managed Services Market with COVID-19 Impact Analysis, by Service Type (Managed Security, Managed Network, and Managed Data Center and IT Infrastructure), Vertical, Organization Size, Deployment Type, and Region - Global Forecast to 2026" report has been added to ResearchAndMarkets.com's offering.
The global Managed Services market size is expected to grow at a CAGR of 7.9% during the forecast period, to reach USD 354.8 billion by 2026 from USD 242.9 billion in 2021.
SMEs seek to adopt more managed services as the IT spending among SMEs is predicted to have a significant increase. Especially in Europe, according to a study, the CAGR for IT spend by SMEs in Europe, the Middle East, and Africa (EMEA) between 2018 and 2023 is expected to be 3.8%, compared with 2.7% for the market overall, these accounted for 35.8% of IT spending in EMEA in 2019.
The rise in IT spending by SMEs is expected to fuel the demand for MSPs, as they adopt cloud, automate services, and explore advanced digital technologies. These technologies have made the provision of managed services to smaller businesses much more cost-effective and efficient.
SMEs are more at risk of cybercrime than enterprises. According to the Verizon 2019 Data Breach Investigations Report (DBIR), 43% of cyberattacks target small businesses. SMEs face significant budget constraints and need to maintain compliance and data protection laws.
Another study shows that nearly 65%, 50%, 47%, and 30% of the enterprise consider the desire to reduce CAPEX and other costs, increase efficiency, overcome internal skills shortages, and address security concerns, respectively, are the drivers for managed services adoption among SMEs. Hence, they are reaching out to MSPs to tackle these challenges.
According to the Datto study, only 3 out of 10 SMEs in the UK, the Netherlands, Germany, France, and Australia are outsourcing some or all of their IT needs; thus, there is a huge untapped potential in the SMEs segment.
The managed IT infrastructure and Data Center segment is expected to hold a larger market size during the forecast period.
Enterprises are adopting digital technologies, such as cloud computing, mobility, IoT, Big data, and predictive analytics, at a high rate across the world. These disruptive technologies are driving the digital revolution by breaking the barriers between the physical and digital worlds.
These advancements empower almost all the verticals, including IT and telecom, healthcare and life sciences, retail and consumer goods, BFSI, manufacturing, among others, in terms of improved performance, faster time to market, and increased customer experience. However, managing an IT environment is a major concern for CIOs. Most IT enterprises are dedicating most of their time in the cycles of a plan, building, running, and maintaining IT with untrained IT employees.
The lack of IT skilled professionals is the major challenge faced by CIOs. MSPs can address this issue and provide cost-effective solutions while also keeping the security aspect in mind. Managed data center and IT infrastructure services are further divided into managed print services, managed disaster recovery, server management, storage and backup, technical support and maintenance, and others (application & middleware management and database management).
The Banking, financial services, and insurance vertical expected to hold the largest market share in 2020
BFSI enterprises need highly complex IT infrastructure to maintain and manage data from trading instruments to record-keeping, as well as reporting and calculations. Apart from this, there are multiple stringent regulations and compliance that BFSI enterprises are supposed to comply with. Enterprises are highly charged for violation of these regulations. Hence, to avoid fines, enterprises require managed services.
This is creating opportunities for MSPs. Financial transactions involve exchanging information with customers or internally; IT services are essential to their success. Hence, BFSI enterprises need MSPs to help provide services for ultra-low latency trading, market data, hosting, and infrastructure connectivity, and risk management solutions.
Data encryption and secure backup are highly demanded by these enterprises, along with a full range of Backup and Disaster Recovery (BDR) solutions to meet federal compliance regulations. MSPs specializing in BDR for financial services help these businesses protect sensitive information, mitigate downtime, and promote overall business continuity. Managed network, managed security, and managed IT infrastructure are the most popular managed services across the BFSI vertical.
North America to hold the largest market size and Asia Pacific (APAC) to grow at a higher rate during the forecast period
APAC is one of the fastest-growing regions in terms of technology adoption, and the demand for digitization is driven by various initiatives carried out by different governments and large enterprises in the region. Countries such as China, Japan, Australia, Singapore, India, and Indonesia are leading this technology adoption, which includes embracing new-age technologies such as AI, edge, IoT, analytics, and cloud.
The region houses a large number of enterprises related to manufacturing, energy and utilities, transportation and logistics, chemicals, and aerospace, which is further expected to drive the demand for managed services. Rapid advancements in telecommunications, cloud computing, and IoT have led several organizations to adopt cloud-based strategies.
Lack of Skilled It Professionals
Growth in Adjacent Markets Such as Cloud Computing
Rise in Demand for Secure It Infrastructure During the COVID-19 Pandemic
Organizations Embrace As-A-Service Capabilities
Cost and Risk Reduction
Increase in Regulations and Compliances
Concerns Over Privacy and Data Security
Surge in Adoption of Cloud
Changing Work Environment
Increase in Dependency of SMEs on Managed Services
Increase in Security Concerns
Lack of Sales and Marketing Staff, Training, and Cybersecurity to Severely Affect the Growth of Managed Service Providers
Big Data and Analytics
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