The managed services market is projected to expand at a Compound Annual Growth Rate (CAGR) of 6.9% during the forecast period, increasing from USD 365.33 billion in 2024 to USD 511.03 billion by 2029. Managed services involve outsourcing specific business operations or functions to third-party providers, known as Managed Services Providers (MSPs). These providers handle the daily management, monitoring, and optimization of outsourced services, allowing enterprises to concentrate on their core business activities. Managed services span multiple domains, including IT infrastructure management, cybersecurity, cloud computing, network monitoring, and data storage.
A key driver of market growth is the increasing adoption of cloud-based operations and applications by organizations. Businesses rely on MSPs to navigate cloud complexities, manage hybrid infrastructures, and secure cloud-stored data. Additionally, the rising frequency and sophistication of cyber threats have heightened the demand for cybersecurity services. MSPs play a crucial role in threat detection, incident response, regulatory compliance, and risk mitigation.
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Moreover, the rapid expansion of the Internet of Things (IoT) has introduced new challenges in managing and securing connected ecosystems. MSPs offer specialized services to oversee, control, and safeguard IoT devices and the vast amounts of data they generate. As enterprises continue to embrace digital transformation, the demand for managed services is expected to grow steadily.
The managed VOIP segment is expected to capture the highest CAGR during the forecast period by managed communication & collaboration service.
Managed Voice over Internet Protocol (VoIP) services are important for modern communication, equipping organizations with a dependable, cost-effective means to conduct voice communications over the internet. VoIP, uses the internet for voice transmission, which substantially reduces traditional phone service expenses, making it a more economical alternative for businesses of all kinds. Moreover, VoIP increases communication flexibility by allowing organizations to expand their phone solutions on demand and interface with other collaboration technologies such as video conferencing, messaging applications, and virtual conference rooms.
Managed VoIP services simplify call routing by offering useful insights on call volumes, peak times, and geographical patterns. Businesses utilize this data to adjust call management strategies, assuring more effective routing and avoiding unnecessary expenditures such as long-distance rates. This strategy not only saves money, but it also enhances the whole communication experience. Also, features like call forwarding, voicemail-to-email, call recording, and virtual phone numbers promote productivity and keep teams connected particularly in remote or hybrid work conditions. These services make it simple to work together across sites, ensuring that information flows smoothly regardless of where employees are located.
Based on the managed network services, the managed WAN segment is expected to hold the largest market share during the forecast period.
Managed wide area network (WAN) services are important to organizations which require a stable, secure infrastructure to link several locations. A wide-area network (WAN) connects numerous LANs to allow communication between sites such as branch offices and data centers. Managed WAN services deliver optimal data transfer by constantly altering routes depending on real-time network conditions, resulting in lower latency and rapid data transmission.
These services include developing and setting up WAN infrastructure depending on location, bandwidth needs, and connection types such as MPLS, Internet VPN, or SD-WAN. Traffic optimization techniques like as Quality of Service (QoS) and application-based routing prioritize vital data by assigning varying levels of priority, ensuring that high-priority applications, such as VoIP or video conferencing, obtain adequate bandwidth with minimal delay. This enables organizations to make better use of available bandwidth, decreasing congestion and increasing overall network efficiency. In addition, managed WAN services monitor network performance, resolving any faults and managing resources to ensure seamless operation. Encryption and firewalls are security methods that protect data privacy during transmission.
North America is projected to hold the largest market share during the forecast period.
The managed services market in North America is on the growth trajectory due to several factors such as cloud computing adoption, need for digital transformation and the need for enterprises to improve IT infrastructure. Enterprises are outsourcing IT management services such as network management, data protection and maintenance of the infrastructure enabling them to focus on core business activities. Increased need for cyber security solutions, complexities of IT systems and the transition to hybrid modes of working are other important factors. Managed services are also being utilized by small and large players across the healthcare, manufacturing, financial services, and retail industries for controlling expenses and increasing effectiveness while achieving compliance standards. Besides, the incorporation of artificial intelligence (AI) in managed services that is in addition to automation is also aiding the market in the active management of information technologies thus another factor that drives market expansion.
Recently there have been various developments in the market including Accenture’s acquisition of Navisite, finalized on January 30, 2024, which adds around 1,500 employees to enhance its managed services capabilities. In January 2024, Frontier Communications became the first service provider in North America to implement Nile’s network-as-a-service (NaaS) model, enabling customers to manage the network aspects without incurring large capital expenses beforehand. Additionally, in March 2024, SmartSource was included in CRN’s MSP 500 list as an organization with unique and robust solutions for the market, while in May 2024, NTT DATA was chosen by Salesforce to optimize its software applications provision. In addition, BlueVoyant announced the partnership with or signed an exclusive agreement to work with EY US aimed at promoting availability of Microsoft 365 E5 advanced security solutions to end-users affirms their commitment to innovative security technology. The above trends are indicative of a strong growth for managed services, reflective of the prevailing digitalization trends across sectors in the region.
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Unique Features in the Managed Services Market
Managed Services Providers (MSPs) offer continuous monitoring and proactive IT support, identifying and resolving potential issues before they escalate. This minimizes downtime, enhances operational efficiency, and ensures seamless business continuity.
Managed services are designed to scale with business growth. Organizations can easily expand or modify their IT infrastructure and services based on evolving needs, without the burden of managing additional in-house resources.
With the increasing prevalence of cyber threats, MSPs provide comprehensive security services, including threat detection, incident response, vulnerability assessments, and compliance management. These services help protect businesses from data breaches, ransomware, and other cyber risks.
Outsourcing IT functions to MSPs reduces operational costs by eliminating the need for large in-house IT teams, expensive hardware, and ongoing maintenance expenses. This cost-efficient model enables businesses to allocate resources more effectively.
Major Highlights of the Managed Services Market
As businesses shift to cloud computing, Managed Services Providers (MSPs) are playing a crucial role in managing hybrid and multi-cloud environments. Organizations rely on MSPs for cloud migration, optimization, and security to ensure seamless operations.
With the rising number of cyber threats and data breaches, cybersecurity services have become a key component of managed services. MSPs provide advanced security solutions, including threat detection, compliance management, and incident response, to safeguard critical business data.
Companies are increasingly outsourcing IT infrastructure management to MSPs to reduce operational costs and enhance efficiency. This includes server management, network monitoring, data storage, and help desk support.
AI-driven automation is transforming managed services by improving predictive maintenance, streamlining IT processes, and enabling real-time analytics. Automated solutions enhance service efficiency and reduce response times for issue resolution.
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Top Companies in the Managed Services Market
Some of the significant managed services vendors include IBM (US), Accenture (Ireland), Microsoft (US), Cisco (US), Fujitsu (Japan), TCS (India), Google (US), DXC Technology (US), Infosys (India),and Capgemini (France).
IBM
IBM is a major player in cloud platforms and AI solutions. Its main areas of operation include AI, business services, cloud technology, systems, and global financing. The company is focused on expanding its offerings by introducing new and advanced products in these fields. It helps customers streamline business processes and enhance data-driven decision-making capabilities. It offers a broad product portfolio that includes analytics, cloud computing, blockchain, intelligent automation, business operations, mobile technology, security, IT infrastructure, software development, and supply chain management.It helps customers streamline business processes and enhance data-driven decision-making capabilities. It offers a broad product portfolio that includes intelligent automation, analytics, cloud computing, blockchain, business operations, mobile technology, IT infrastructure, security, software development, and supply chain management.
It offers managed services, such as enterprise application, managed mobility, workplace, backup and recovery, network, security, and storage services.
IBM has expanded its managed cloud services, which encompasses Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS). It serves multiple industries, including automobiles, telecommunications, financial services, health, aerospace & the armed forces, life sciences, and retail. It fosters a network of worldwide business partners operating in over 170 countries. IBM Research is the world’s biggest industrial research group, with 12 laboratories on 6 continents, including the Americas, Europe, Middle East and Africa, and Asia Pacific.
Accenture
Accenture is a diversified technology and consulting organization. Accenture’s diverse portfolio spans various services, from hands-on delivery and installation to more specialized areas like application management, BPO, and technology consulting. The company also brings expertise in advanced fields such as blockchain, security, cloud services, and network transformation, ensuring comprehensive solutions tailored to the specific needs of its clients across various industries. It serves across multiple verticals: aerospace and defense, chemicals, healthcare, life sciences, software and platforms, automotive, communications and media, high technology, natural resources, travel, banking, consumer goods and services, industrial equipment, public services, utilities, capital markets, energy, insurance, and retail.
Accenture provides managed security, infrastructure, network transformation, and compliance services, helping businesses tackle operational challenges while maintaining security and efficiency in a fast-evolving digital world. With a presence in over 50 countries and the ability to serve clients in more than 120 nations, Accenture combines local expertise with a global reach. Its team of 774,000 professionals, working alongside 350+ strategic partners, drives innovation and collaboration. As of 2024, the company’s commitment to progress is reflected in its impressive portfolio of more than 7,400 pending patents.
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