The managed services market to grow at 7.9% CAGR and reach USD 354.8 billion by 2026

The market size of the managed services market is expected to grow at a Compound Annual Growth Rate (CAGR) of 7.9% by 2026 and reach USD 354.8 billion from USD 242.9 billion in 2021. The managed services market in the APAC is expected to grow at the highest CAGR from 2021 to 2026. Enterprises in the APAC are demanding more managed services than other regions for handling the technology and business challenges.

Marketsandmarkets surveyed prominent managed services providers like IBM, Cognizant, Infosys, TCS, CISCO, Accenture, Fujitsu, and a lot more organizations across the globe, analyzed the findings based on different verticals, service types, deployment model, organization size, and regions and published its report forecasting the managed services market revenue. In this post, we shall see the major factors that are expected to affect the growth of the managed services market.

The Covid-19 pandemic It is known that the Covid-19 changed the traditional work culture with most organizations choosing a hybrid work model post the pandemic. This period also saw a shift in the cloud adoption – from private cloud to public cloud. The changes have increased the demand for cybersecurity, low latency, and high bandwidth creating various new opportunities for managed services.
By increasing their security offerings post-pandemic like continuous monitoring, identity, and access management, Managed Service Providers (MSPs) have been able to accommodate changes in work style and provide the best services.
Privacy and data security The shift from private cloud to public cloud and from on-premises to the cloud has raised various concerns over the privacy and data security of enterprises. By ensuring advanced protection to organizations from data breaches and privacy challenges, MSPs will be able to offer effective services, thereby increasing their market size.
Lack of sales and marketing staff, training, and cybersecurity According to the report, marketing and sales are the top challenges for 53% of MSPs, while about 41% and 28% of MSPs believe staffing and training and ransomware and cybersecurity as critical challenges.
Cloud adoption Although almost 70% of enterprises work in a multi-cloud environment, improving customer engagement is a challenge for most enterprises. MSPs with DevOps experience and those offering consumption-based pricing models can view this as an opportunity to grow their market. Cloud adoption has opened an array of opportunities for MSPs in areas like managed security, managed network, managed data centers, and IT infrastructure, managed mobility, managed information and managed communication and collaboration services.