Cloud Managed Services Market Size, Share & Segmentation By Service type (Managed Business Services, Managed Network Services, Managed Security Services, Managed Infrastructure Services, Managed Mobility Services, Managed Communication and Collaboration Services), By Organization Size (Large Enterprises, Small and Medium-Sized Enterprises), By Deployment Model (Private Cloud, Public Cloud), By vertical (Telecom & ITES, Government, BFSI, Retail & Consumer, Healthcare, Manufacturing & Automotive, Others), By Region and Global Forecast for 2024-2032

Cloud Managed Services Market Report Scope & Overview:

Get more information on Cloud Managed Services Market - Request Sample Report

The Cloud Managed Services Market size was valued at USD 115.8 Billion in 2023 and is expected to reach USD 401.03 Billion by 2032 and is growing with a CAGR of 14.8% over the forecast period 2024-2032.

Cloud Managed Services is an outsourcing function in which a company's in-house functions are outsourced to be managed by a managed service provider (MSP) in the cloud. A cloud-managed service provider's offerings often include managed data center solutions, managed network solutions, and others. The increasing demand from companies for cloud managed services to reduce operating and infrastructure costs to streamline business processes is a key factor that helps to the growth of this market. Outsourcing cloud resources to third parties enhances organizational competitiveness, enabling companies to focus on their core strengths. The growing field of Big Data has created a significant need for managed cloud computing and analytical services.

Outsourced services assist businesses in becoming more competitive by bringing in capabilities that they lack. Managed cloud services also assist business owners in replacing costly functions. Furthermore, the introduction of cloud-managed services has aided firms in lowering their in-house information technology costs. The service also enables a company to improve its productivity and focus on its core tasks.

Market Dynamics:

KEY DRIVERS:

• Customers are attracted to MSPs because they provide 24x7 monitoring.

• Growing demand for business applications to drive market.

• Customer acceptance of cloud approach to streamline IT operations drives demand for Cloud Managed Services.

Organizations are migrating their IT applications to cloud servers, functions such as accounting, finance, customer relationship management, and more. The rapid growing of cloud solutions for deploying and managing business operations is reshaping the landscape of cloud adoption. Leading providers understand that the cloud delivery model offers more than cost savings. They have developed comprehensive service portfolios that cater to business needs and deliver enhanced customer value. With a shared objective of leveraging cloud technology for technological advancement, the cloud presents a valuable model for companies to efficiently manage their business operations.

RESTRAINTS:

• The consistently increasing number of data breaches, and concerns related to security.

• Lack of integrated workforce management and data management

One of the primary obstacles that restrain the market growth is the shortage of IT and cybersecurity professionals. This deficiency poses a significant threat to organizations as it hampers their ability to meet their IT security requirements effectively. Without a skilled workforce in place, companies are vulnerable to cyber threats such as hackers and malware infiltrating their IT systems, leading to potential data breaches and resource loss. Addressing this issue is crucial for businesses to safeguard their valuable assets and maintain a secure IT environment.

OPPORTUNITY:

• The emphasis on decreasing IT costs and the necessity to focus on business functions.

• The development of cloud automation, which helps in meeting business needs with IT by enhancing service delivery speed for end users.

• Rising adoption of cloud managed services among small and medium enterprises (SMEs).

CHALLENGES:

• Challenges related to infrastructure and connectivity in developing regions.

• Understanding and analyzing cloud invoicing for various cloud services can be complex.

• The structure of billing is completely unclear, the invoicing for the hybrid cloud configuration becomes more difficult.

• Rising regulations and compliance requirements have become more prevalent in recent years. This trend has necessitated a greater focus on ensuring adherence to legal and industry standards.

Impact of Russia-Ukraine War:

The global IT infrastructure has undergone significant transformations. The Russia-Ukraine crisis has particularly affected cloud managed services and data centers, which play a central role in delivering these services. Both direct and indirect repercussions have been observed, with a noticeable surge in demand for leased data center spaces. This uptick is attributed to their superior energy efficiency compared to enterprise data centers, offering a more sustainable and cost-effective solution during these challenging times. The war between Russia and Ukraine has contributed to escalating operational costs for data center operators, including providing cloud managed services. A major factor driving these costs is the increased expenses associated with power consumption, which forms a substantial portion of data center operational expenditure. The situation is further compounded by shortages of natural gas, leading to elevated power costs across Europe. This, in turn, adds strain to the already complex operations of data centers and, consequently, impacts cloud managed services. The cloud managed services market is grappling with challenges posed by operational disruptions. This market, covering various services such as business services, network services, security services, data center services, and mobility services, is experiencing shifts in response to changing dynamics in data center operations and the broader IT infrastructure landscape.

Impact of Economic Downturn:

Because of ongoing economic slowdown, the market for cloud managed services is anticipated to sustain growth. This growth is propelled by factors such as the growing need for regulatory compliance, a concerted effort to minimize overall ownership costs, and an increasing reliance on IT operations to enhance business productivity. An analysis using the Ansoff Matrix within the cloud managed services sector indicates that strategic growth approaches like market development, penetration, product development, and diversification are crucial for effectively navigating the economic slowdown. Implementing these strategies becomes imperative for companies seeking to enhance their market position in the face of economic challenges. The demand for cloud services is high, particularly in the Small and Medium-sized Enterprises (SMEs), driven by the cost-efficiency and business flexibility offered by cloud services. This trend holds significant promise for the continued growth of the cloud managed services market in the future.

Market Segmentation

By Service type

• Managed Business Services

• Managed Network Services

• Managed Security Services

• Managed Infrastructure Services

• Managed Mobility Services

• Managed Communication and Collaboration Services

The managed network services segment has dominated the market, with more than 25% market share. This growth is primarily driven by the increasing adoption of cloud managed services by businesses to efficiently manage network-related services and the overall administration of their networks. Cloud-based network managed services offer companies a comprehensive platform to establish remote data networks, including WAN/LAN/WLAN. The adoption of these services has seen huge growth in recent years due to the range of applications they provide, such as high-quality network solutions, IT network management and monitoring services, equipment maintenance, and ICT systems maintenance services. The Managed Communication and Collaboration Services are projected to experience a higher CAGR during the forecast period. Communication and collaboration having a variety of communication tools, including voice, IP telephony calling, instant messaging, desktop sharing, telepresence, web conferencing, audio conferencing, and video conferencing, all of which are essential for seamless interaction. This categorizes the managed communication and collaboration services segment into managed voice over internet protocol (VoIP), managed email services, and managed unified communication as a service (UCaaS).

By Organization Size:

• Large Enterprises

• Small and Medium-Sized Enterprises

By Deployment Model:

• Private Cloud

• Public Cloud

By Vertical

• Telecom & ITES

• Government

• BFSI

• Retail & Consumer

• Healthcare

• Manufacturing & Automotive

• Others  

The ITES and Telecom segment held the highest revenue share of more than 18%. The increasing digital transformation is driving the industry’s growth. IT and telecom companies are increasingingly adopting cloud managed services to better maintain their services across a variety of applications. Cloud migration will minimize internal computing needs and decrease surplus expenses. IT and telecom companies are the early adopters of efficient technologies such as Bring Your Own Device (BYOD), Machine Learning, and others that have further contributed to the market growth.

The healthcare segment also holds a huge share of the market. The increased cloud adoption in the healthcare industry helps to drive the demand for cloud managed services. The government segment is expected to be growing at the fastest CAGR of 15% during the forecast period of 2024-2032. Cloud technologies allow governments to optimize their IT infrastructure, streamline processes, and decrease the expenses.

Regional Analysis:

North America region dominates the market, holding a share of more than 30%. The NA region is experiencing a surge in customer demand for managed cloud services due to the growth and profitability they offer. Various end-user verticals are turning to cloud services as a cost-effective IT delivery model to address the shortage of skilled IT professionals needed to manage business operations. North America is leading in the adoption of cloud technology early in the US Army, Air Force, the United States Department of Justice (DOJ), and other government agencies.

The European countries are focusing their information technology and cloud computing spending on digitalization efforts. The use of hybrid cloud solutions is important in driving industries towards digital transformation. Cloud infrastructure is being leveraged to spearhead innovative projects and approaches, with the major players in the region investing in research and development to provide businesses with advanced multichannel cloud strategies to navigate the ever-evolving digital landscape.

The Asia Pacific region is expected to grow with highest growth rate during the forecast period. Information and Communication Technology (ICT) applications play a crucial role in driving socio-economic development in this region, which is known for its significant expertise in the ICT field. The Asia Pacific Tele community, an international organization, provides affordable ICT and telecommunications services to the people in the region. Their efforts focus on issues related to increasing efficiency, improving productivity, and bridging the digital divide within countries.

The growth of 5G infrastructure in the APAC region is expected to drive the adoption of cloud services. Major players like IBM and Google are increasing their investments in cloud-managed services, driving the growth of the market. Regional governments are making huge investments in managing cloud infrastructure, contributing to the overall growth of the market.

Need any customization research on Cloud Managed Services Market - Enquiry Now

REGIONAL COVERAGE:

North America

• US

• Canada

• Mexico

Europe

• Eastern Europe

  • Poland

  • Romania

  • Hungary

  • Turkey

  • Rest of Eastern Europe

• Western Europe

  • Germany

  • France

  • UK

  • Italy

  • Spain

  • Netherlands

  • Switzerland

  • Austria

  • Rest of Western Europe

Asia Pacific

• China

• India

• Japan

• South Korea

• Vietnam

• Singapore

• Australia

• Rest of Asia Pacific

Middle East & Africa

• Middle East

  • UAE

  • Egypt

  • Saudi Arabia

  • Qatar

  • Rest of the Middle East

• Africa

  • Nigeria

  • South Africa

  • Rest of Africa

Latin America

• Brazil

• Argentina

• Colombia

• est of Latin America

KEY PLAYERS:

The major key players are Cisco, Atos, NTT Data Corporation, IBM Corporation, Fujitsu, Accenture, Ericsson, Alcatel Lucent, AWS, Infosys & Others.

Recent Developments:

• In June 2023, Samsung Electronics and NAVER Cloud joined forces to introduce a cutting-edge 5G network for Hoban Construction. This groundbreaking network marks a significant milestone in the Korean construction industry, enabling companies to seamlessly integrate a variety of 5G applications to boost efficiency and safety at construction sites.

• In May 2023, Serviceaide, Inc., a leading US-based provider of IT and service management solutions, unveiled its state-of-the-art AI-powered solutions, including the revolutionary AI-Everywhere Luma Virtual Agent. Luma 3.0, incorporating Generative AI technology, represents a major leap forward in productivity, efficiency, cost reduction, and business process innovation. This advancement is designed to enhance all service management functions, providing users and staff with highly interactive experiences that cater to their needs by delivering relevant information without the need for manual searching.

• In April 2023, VMware, Inc., a leading cloud computing company, introduced VMware Cross-Cloud managed services. These comprehensive services are designed to benefit partners and customers alike, empowering skilled partners to expand their managed services practices. The launch of VMware Cross-Cloud managed services not only promotes growth, profitability, and recurring revenue for providers but also addresses the challenge of talent and skills gaps in multi-cloud environments. The goal is to deliver faster time to value and bridge the IT expertise gap for customers.