Managed Services Market to Reach USD 990,611.47 Million by 2032, Growing at a CAGR of 14.5%: Credence Research
PUNE, India, July 21, 2025 /PRNewswire/ -- The Managed Services Market is poised for substantial growth, with its value projected to increase from USD 335,320 million in 2024 to USD 990,611.47 million by 2032, registering a CAGR of 14.5%. This robust expansion is driven by the growing need for businesses to optimize IT operations, reduce operational costs, and enhance cybersecurity resilience. As digital transformation accelerates across industries, organizations are increasingly outsourcing IT infrastructure, cloud management, network monitoring, and security services to managed service providers (MSPs) to focus on core business functions while ensuring scalability and operational efficiency.
The surge in remote work models, cloud adoption, and complex IT environments further amplifies demand for managed services that offer 24/7 monitoring, compliance management, and disaster recovery solutions. Enterprises are also leveraging MSPs to bridge the IT skills gap and gain access to cutting-edge technologies like AI, automation, and analytics. The market outlook remains favorable, with rising investments in managed security services, data center outsourcing, and hybrid cloud management expected to create new growth opportunities through 2032.
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Key Growth Determinants - Managed Services Market
The global managed services market is witnessing robust expansion, projected to reach substantial figures in the coming years. This growth is primarily fueled by the evolving technological landscape, increasing operational complexities, and a strategic shift in business priorities.
Increasing Complexity of IT Infrastructure and Operations:
As businesses adopt advanced technologies like cloud computing (multi-cloud and hybrid cloud environments), Artificial Intelligence (AI), Machine Learning (ML), and the Internet of Things (IoT), their IT environments become increasingly complex. Managing these intricate systems, ensuring seamless integration, and maintaining optimal performance requires specialized expertise that many organizations lack in-house. Managed Service Providers (MSPs) offer this specialized knowledge, making them indispensable for effective IT infrastructure management.
Growing Demand for Cost Optimization and Operational Efficiency:
Organizations are constantly under pressure to reduce operational expenditures while maintaining high service quality and scalability. Outsourcing IT operations to MSPs allows businesses to convert capital expenditures (CapEx) into predictable operational expenditures (OpEx), leading to significant cost savings. MSPs help streamline processes, reduce downtime, and improve overall operational efficiency, enabling businesses to allocate their internal resources more strategically.
Heightened Cybersecurity Threats and Regulatory Pressures:
The escalating sophistication and frequency of cyber threats (e.g., phishing, ransomware, data breaches) necessitate robust and proactive cybersecurity measures. Simultaneously, stringent data privacy regulations (e.g., GDPR, HIPAA) impose significant compliance burdens on businesses. Managed Security Services (MSSs) offered by MSPs provide end-to-end protection, including threat intelligence, incident response, firewall management, and compliance adherence, mitigating risks and ensuring data security.
Shortage of Skilled IT Professionals:
There is a persistent global shortage of skilled IT professionals, particularly in specialized areas like cybersecurity, cloud management, and AI. This talent gap makes it challenging for organizations to build and maintain in-house teams capable of managing modern IT infrastructures. MSPs bridge this gap by providing access to a pool of certified experts, allowing businesses to leverage high-level technical skills without the overhead of hiring and training.
Focus on Core Business Functions:
By offloading non-core IT operations to MSPs, businesses can redirect their internal teams and resources to focus on strategic initiatives, innovation, and core business objectives. This allows companies to enhance their competitive advantage and drive growth in their primary domains.
Key Growth Barriers - Managed Services Market
1. Cybersecurity and Evolving Threats:
-- The constant evolution of cyber threats (ransomware, phishing, DDoS,
APTs) poses a significant challenge. MSPs must continuously update their
security measures and knowledge to protect client data and systems,
which can be resource-intensive.
-- MSPs are high-value targets for cybercriminals as a breach of an MSP can
grant access to multiple client networks. This puts immense pressure on
MSPs regarding liability and reputational damage in case of a breach.
-- Some MSPs may offer inadequate security services or operate with
fragmented security tools and siloed data, leading to vulnerabilities
and inefficiencies.
2. Talent Shortages and Skill Gaps:
-- There's a persistent shortage of skilled IT professionals, especially in
specialized areas like cybersecurity and AI. This makes it difficult for
MSPs to attract, hire, and retain top talent, impacting their ability to
handle complex IT infrastructures and scale operations.
-- Many MSPs experience employee churn, losing skilled technicians to
in-house IT departments of end-user organizations.
3. Maintaining Profit Margins and Pricing Pressures:
-- The MSP market is increasingly saturated, with many providers offering
similar services. This intensifies competition and leads to price
pressure, making it challenging for MSPs to maintain profitability while
offering competitive pricing.
-- In the quest to win contracts, some MSPs may undervalue their services
or construct pricing models that don't drive maximum profit, making it
difficult to raise prices later.
-- Unexpected costs like cyber insurance premiums, compliance requirements,
and the need for additional services or hardware upgrades can impact
margins.
4. Scalability and Resource Management:
-- Smaller MSPs, in particular, struggle to expand services without
overwhelming resources or compromising service quality. Rapid client
growth can strain MSP resources.
-- Managing a variety of solutions across different clients increases
complexity. Integrating new IT services with existing legacy systems can
lead to compatibility issues, disruptions, and additional expenses.
-- Failure to effectively forecast demand and allocate resources can lead
to being swamped, delayed responses, and a decline in service quality.
5. Regulatory Compliance and Data Sovereignty:
-- Compliance with various data privacy regulations (GDPR, CCPA, HIPAA) is
non-negotiable and constantly evolving. MSPs face a continuous challenge
to ensure client compliance, which can be resource-intensive and incur
hefty fines for non-compliance.
-- Mandates requiring localized data processing can force providers to
duplicate infrastructure in each jurisdiction, reducing economies of
scale and complicating global service delivery.
Key Market Opportunities - Managed Services (IBC) Market
1. Cybersecurity and Evolving Threats:
-- The constant evolution of cyber threats (ransomware, phishing, DDoS,
APTs) poses a significant challenge. MSPs must continuously update their
security measures and knowledge to protect client data and systems,
which can be resource-intensive.
-- MSPs are high-value targets for cybercriminals as a breach of an MSP can
grant access to multiple client networks. This puts immense pressure on
MSPs regarding liability and reputational damage in case of a breach.
-- Some MSPs may offer inadequate security services or operate with
fragmented security tools and siloed data, leading to vulnerabilities
and inefficiencies.
2. Talent Shortages and Skill Gaps:
-- There's a persistent shortage of skilled IT professionals, especially in
specialized areas like cybersecurity and AI. This makes it difficult for
MSPs to attract, hire, and retain top talent, impacting their ability to
handle complex IT infrastructures and scale operations.
-- Many MSPs experience employee churn, losing skilled technicians to
in-house IT departments of end-user organizations.
3. Maintaining Profit Margins and Pricing Pressures:
-- The MSP market is increasingly saturated, with many providers offering
similar services. This intensifies competition and leads to price
pressure, making it challenging for MSPs to maintain profitability while
offering competitive pricing.
-- In the quest to win contracts, some MSPs may undervalue their services
or construct pricing models that don't drive maximum profit, making it
difficult to raise prices later.
-- Unexpected costs like cyber insurance premiums, compliance requirements,
and the need for additional services or hardware upgrades can impact
margins.
4. Scalability and Resource Management:
-- Smaller MSPs, in particular, struggle to expand services without
overwhelming resources or compromising service quality. Rapid client
growth can strain MSP resources.
-- Managing a variety of solutions across different clients increases
complexity. Integrating new IT services with existing legacy systems can
lead to compatibility issues, disruptions, and additional expenses.
-- Failure to effectively forecast demand and allocate resources can lead
to being swamped, delayed responses, and a decline in service quality.
Segmentation
By Service Type
-- Managed Network Services
-- Managed Security Services
-- Managed Data Center Services
-- Managed Infrastructure Services
-- Managed Mobility Services
-- Managed Communication and Collaboration Services
-- Managed IT Support Services
-- Managed Cloud Services
-- Managed Application Services
-- Managed Backup and Disaster Recovery Services
By Deployment Model
-- On-Premise
-- Cloud-Based
By Organization Size
-- Small and Medium-Sized Enterprises (SMEs)
-- Large Enterprises
By End-User Industry
-- BFSI (Banking, Financial Services, and Insurance)
-- IT and Telecom
-- Healthcare
-- Manufacturing
-- Retail and E-commerce
-- Government and Public Sector
-- Energy and Utilities
-- Education
-- Media and Entertainment
-- Transportation and Logistics
By Region
-- North America
-- The U.S.
-- Canada
-- Mexico
-- Europe
-- Germany
-- France
-- UK.
-- Italy
-- Spain
-- Rest of Europe
-- Asia Pacific
-- China
-- Japan
-- India
-- South Korea
-- South-east Asia
-- Rest of Asia Pacific
-- Latin America
-- Brazil
-- Argentina
-- Rest of Latin America
-- Middle East & Africa
-- GCC Countries
-- South Africa
-- The Rest of the Middle East and Africa
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Regional Analysis - Managed Services Market
1. North America
-- Market Dominance: North America currently holds the largest share of the
global managed services market in terms of revenue. This dominance is
attributed to the early adoption of cloud computing, robust IT
infrastructure, and high IT spending by enterprises.
-- Key Drivers:
-- Cloud Adoption: Widespread adoption of cloud computing, including
hybrid and multi-cloud strategies, fuels the demand for managed
cloud services, migration support, and optimization.
-- Cybersecurity Regulations: Stringent cybersecurity regulations and
the increasing frequency of cyber threats drive significant demand
for managed security services (MSSPs), including managed detection
and response (MDR/XDR) and compliance management.
-- Digital Transformation: Ongoing digital transformation initiatives
across various industries, from BFSI and healthcare to government,
necessitate outsourced IT management for efficiency and innovation.
-- AI and Automation: Early integration and investment in AI and
automation technologies by businesses and MSPs enhance service
delivery and operational efficiency.
-- Presence of Key Players: The region benefits from the strong
presence of major global MSPs, fostering a competitive and
innovative market.
-- Trends: A shift towards more specialized and outcome-based services,
with a focus on delivering measurable business results.
2. Asia Pacific (APAC)
-- Fastest Growing Market: APAC is projected to be the fastest-growing
region in the managed services market, exhibiting a high Compound Annual
Growth Rate (CAGR).
-- Key Drivers:
-- Rapid Digital Transformation: Emerging economies like China, India,
and Southeast Asian countries are undergoing rapid digital
transformation, leading to increased adoption of IT outsourcing.
-- Increasing Investments in Data Security: Growing awareness of
cybersecurity risks and increasing investments in data security
solutions are boosting the demand for managed security services.
-- Cloud Adoption: Rising adoption of cloud-based solutions across
various organizations, including SMEs, drives the need for managed
cloud services.
-- Government Initiatives: Government initiatives promoting digital
public services and economic diversification through IT
infrastructure expansion contribute to market growth.
-- Cost Optimization: Businesses in the region are increasingly looking
to managed services to reduce capital expenditure and optimize
operational costs.
-- Trends: Significant opportunities in managed data center and IT
infrastructure services, as well as managed security services. India and
China are key growth markets within the region.
3. Europe
-- Significant Market Share: Europe holds a substantial share of the global
managed services market.
-- Key Drivers:
-- Cloud Platform Adoption: Rising adoption of cloud platforms and a
high demand for managing confidential enterprise data are key
drivers.
-- Data Privacy Regulations: Strict data privacy regulations like GDPR
necessitate robust managed services for compliance and data
protection.
-- SME Investments: An increasing number of small and medium-sized
enterprises (SMEs) are investing in advanced technologies and
seeking managed services to support their IT needs.
-- Focus on Cost-Effectiveness: Businesses are looking to managed
services to minimize capital expenditure and optimize IT budgets.
-- Trends: Managed security is a highly lucrative and fast-growing segment.
Countries like Germany, the UK, and France are expected to show strong
growth. There's also a growing interest in nearshore services for cost
efficiency and collaboration.
4. Middle East & Africa (MEA)
-- Considerable Growth Rate: The MEA region is estimated to grow at a
considerable rate in the managed services market.
-- Key Drivers:
-- Government Development Projects: Governments in GCC countries (e.g.,
UAE's Vision 2021, Saudi Arabia's Vision 2030) are focusing on
national development projects that involve significant IT
infrastructure expansion and cloud-based services.
-- SME Adoption: Small and Medium Enterprises (SMEs) are increasingly
adopting managed services, driven by the need for cost-effective IT
solutions and the challenges of managing on-premises hardware.
-- Cybersecurity Talent Shortages: Chronic cybersecurity talent
shortages are prompting enterprises to outsource advanced protection
stacks to MSPs.
-- Digital Transformation: Growing digital transformation efforts
across various sectors contribute to the demand for managed
services.
-- Trends: Managed data center and hosting services hold a significant
share, while managed security services are experiencing rapid growth due
to heightened attack frequencies.
5. Latin America
-- High Growth Potential: Latin America is also expected to exhibit a
strong CAGR in the managed services market.
-- Key Drivers:
-- Digital Transformation: Businesses are increasingly leveraging
managed services to support their digital transformation journeys.
-- Cost Optimization: The desire to reduce IT maintenance costs and
operational expenses drives the adoption of managed services.
-- Adoption of Emerging Technologies: The need for specialized
expertise to deploy, maintain, and secure emerging technologies like
cloud and cybersecurity solutions fuels demand.
-- SME Market: SMEs are increasingly relying on managed network service
providers to decrease capital expenditure and focus on core
competencies.
-- Trends: Managed security services are a fast-growing segment, and Brazil
is expected to be a key growth country within the region.
Credence Research's Competitive Landscape Analysis - Managed Services Market
Credence Research's Competitive Landscape Analysis of the Managed Services Market highlights the dominance of global IT and cloud leaders such as IBM, Microsoft, Cisco, and Google Cloud, who command significant market share due to their extensive service portfolios, technological expertise, and global delivery capabilities. These players offer a comprehensive range of managed services including infrastructure management, cloud migration, cybersecurity, and application support. Strategic partnerships, AI integration, and end-to-end digital transformation services further strengthen their competitive positions in both mature and emerging markets.
Alongside global leaders, the market features strong competition from specialized and regional players like Secureworks, Lumen Technologies, and MetTel, who focus on niche segments such as cybersecurity, network services, and industry-specific solutions. These firms differentiate through deep customer engagement, localized service delivery, and tailored offerings that meet regulatory and operational requirements. According to Credence Research, competition in the managed services market is shaped by the ability to deliver scalable, secure, and cost-effective solutions while adapting quickly to evolving technology demands and client expectations.
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Key Player Analysis
-- Accenture
-- ARYAKA NETWORKS, INC.
-- AT&T Inc.
-- Atera Networks Ltd.
-- BMC Software, Inc.
-- Broadcom
-- Cisco Systems, Inc.
-- DXC Technology Company
-- Fujitsu
-- HCL Technologies Limited
-- HP Development Company, L.P.
-- International Business Machines Corporation
-- Lenovo
Recent Industry Developments
-- April 2025: Accenture Federal Services secured a USD 1.6 billion task
order to enhance the U.S. Air Force Cloud One environment, focusing on
automation and financial governance.
-- March 2025: Arrow Electronics introduced an AI platform for North
American channel partners, expanding its portfolio with managed AI
deployments across security and cloud services.
-- December 2024: Accenture reported USD 17.7 billion in Q1 FY2025 revenue,
with managed services contributing USD 8.6 billion, reflecting 11%
growth.
-- November 2024: Dell broadened its edge and 5G ecosystem through expanded
collaborations with Ericsson and Nokia to strengthen its edge-management
capabilities.
-- September 2024: IBM unveiled new services integrating generative AI and
Oracle cloud applications to support Oracle clients' digital
transformation.
-- September 2024: IBM and NTT DATA launched SimpliZCloud, a fully managed
cloud platform for financial institutions built on IBM LinuxONE,
enabling AI/ML adoption and improved infrastructure performance through
a subscription-based model.
-- September 2024: TCS introduced two AI-powered cybersecurity
offerings--Managed Detection and Response (MDR) and Secure Cloud
Foundation--in partnership with Google Cloud to improve hybrid cloud
security posture.
-- June 2024: DXC Technology and Dell launched Enterprise Intelligence
Services (EIS), combining AI, data analytics, and cloud to deliver
advanced multi-cloud managed services for operational optimization.
-- June 2024: Telefónica Tech partnered with IBM to advance
enterprise-level AI, data analytics, and data management solutions.
-- May 2024: Lenovo collaborated with Cisco to offer integrated
infrastructure and networking solutions aimed at accelerating enterprise
digital transformation.
-- May 2024: Elitery, an Indonesian cloud services provider, was recognized
as a Google Cloud Managed Services Provider, enabling it to deliver
generative AI solutions to local governments.
-- May 2024: Dell Technologies and CrowdStrike expanded their partnership
to deliver Managed Detection and Response (MDR) services using the
CrowdStrike Falcon XDR platform.
-- March 2024: Cognizant extended its partnership with Pon IT to continue
delivering cloud managed services and optimizing cloud platforms across
Pon Holdings' subsidiaries.
-- January 2024: Accenture acquired NaviSite to bolster its managed
services capabilities in application and infrastructure management for
North American clients.
-- January 2024: Kyndryl and Cisco collaborated on a new security edge
service designed to strengthen customers' cybersecurity posture and
response capabilities.
-- January 2024: GTT partnered with JOVO to provide inspection,
maintenance, repair, and engineering consultancy through two new
technical services.
-- October 2023: Logicalis introduced its Intelligent Connectivity
suite--featuring SASE, SSE, SD-WAN, and Private 5G--powered by Cisco and
supported by the Logicalis Digital Fabric Platform.
-- September 2023: Cloud5 Communications launched a managed services
division targeting IT needs across hospitality, student housing, and
senior living sectors.
-- May 2023: Alfar Capital and Walter Capital Partners acquired MSP Corp in
Canada and merged it with Groupe Access to enhance IT and cybersecurity
offerings.
-- January 2023: Rackspace Technology launched Modern Operations, a managed
public cloud service for Azure, AWS, and GCP, offering 24/7 support and
cloud optimization capabilities.
Reasons to Purchase this Report:
-- Gain a comprehensive understanding of the market through qualitative and
quantitative analyses, considering both economic and non-economic
factors, with segmentation and sub-segmentation details provided in
terms of market value (USD Billion).
-- Identify regions and segments expected to experience the fastest growth
or dominate the market, with a detailed analysis of geographic
consumption patterns and the factors driving or hindering market
performance in each region.
-- Stay informed about the competitive environment, with rankings of major
players, recent product and service launches, partnerships, business
expansions, and acquisitions from the past five years.
-- Access detailed profiles of major market players, including company
overviews, insights, product benchmarking, and SWOT analysis, to
understand competitive advantages and market positioning.
-- Explore the present and forecasted market landscape, with insights into
growth opportunities, market drivers, challenges, and constraints for
both developed and emerging regions.
-- Benefit from Porter's Five Forces analysis and Value Chain insights to
evaluate various market perspectives and competitive dynamics.
-- Understand the evolving market scenario, including potential growth
opportunities and trends expected in the coming years.
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