North America Managed Security Services Market Outlook, 2029

Businesses across North America are investing heavily in digital transformation to enhance operational efficiency and gain competitive advantages by adopting cloud services, IoT, big data analytics, and AI. The need for expertise in managing advanced technologies fuels the demand for managed services providers (MSPs) that offer comprehensive IT solutions and support. Rising cybersecurity threats and stringent data protection regulations have heightened the focus on robust security measures, leading organizations to turn to MSPs for advanced cybersecurity services, including threat detection, response, and compliance management, ensuring their digital assets are well-protected.

The market faces challenges such as the scarcity of skilled IT professionals, which poses a significant challenge for the North American market, as organizations struggle to find and retain talent capable of managing complex IT infrastructures. The challenge increases reliance on MSPs but also pressures these providers to continuously recruit and train qualified personnel to meet client demands. Navigating the complex regulatory environment in North America, with varying requirements across states and industries, is another significant challenge. MSPs must stay updated with regulatory changes and ensure their services help clients achieve and maintain compliance, which requires substantial resources and expertise.

Companies are increasingly adopting multi-cloud strategies to enhance flexibility and avoid vendor lock-in, with managed services evolving to support multi-cloud environments, providing seamless management, integration, and optimization across different cloud platforms. The trend ensures businesses can leverage the best of each cloud service. There is a growing trend towards outcome-based managed services, where MSPs are compensated based on the achievement of specific business outcomes rather than just service delivery. The shift drives MSPs to offer more value-driven, customized solutions aligned with clients' business goals, enhancing overall satisfaction and effectiveness.

For instance, a leading healthcare provider in North America recently partnered with an MSP to overhaul its IT infrastructure amid rising cyber threats and regulatory complexities. The MSP implemented a multi-cloud strategy, integrating advanced cybersecurity measures and ensuring compliance with healthcare regulations. The partnership not only enhanced the provider’s operational efficiency but also fortified its data security, demonstrating the pivotal role of managed services in navigating the digital landscape. The North American Managed Services market, characterized by strategic investments in innovation and sustainability, is witness significant growth and transformation.

According to the research report, the North America managed services market was valued at more than USD 11 Billion in 2023. One notable growth trajectory is the increasing demand for robust cybersecurity solutions. As cybersecurity threats continue to escalate, propelled by the rise in digital transformation and stringent data protection regulations, managed services are becoming critical for providing advanced security measures. The need for comprehensive threat detection, response, and compliance management is prompting organizations to rely heavily on managed service providers (MSPs), ensuring their digital assets are well-protected.

The demand for enhanced security is part of a broader trend where businesses are heavily investing in digital transformation. Companies are adopting cloud services, IoT, big data analytics, and AI to enhance operational efficiency and gain competitive advantages, creating a need for expertise in managing these complex technologies and fueling demand for MSPs that can offer comprehensive IT solutions and support. Simultaneously, the market faces significant challenges, such as the scarcity of skilled IT professionals.

Organizations struggle to find and retain talent capable of managing sophisticated IT infrastructures, increasing reliance on MSPs and pressuring these providers to continuously recruit and train qualified personnel to meet client demands. There is also a growing emphasis on outcome-based managed services, where MSPs are compensated based on the achievement of specific business outcomes rather than just service delivery. This shift encourages MSPs to offer more value-driven, customized solutions aligned with clients' business goals, enhancing overall satisfaction and effectiveness.

Market Drivers:

• High Labor Costs and Advanced IT Needs: North American companies face significant expenses in hiring and maintaining skilled IT professionals due to the high cost of labor. This financial burden drives organizations to outsource IT services to managed service providers (MSPs) that can offer top-tier expertise and state-of-the-art technology solutions at a fraction of the cost. Additionally, the complexity and sophistication required for IT infrastructure in North America necessitate professional management to ensure systems are efficient, secure, and capable of supporting business operations effectively.
• Focus on Core Competencies: Companies in North America are increasingly outsourcing non-core IT functions to focus on their primary business operations, innovation, and strategic growth. By delegating IT management to MSPs, businesses can streamline their operations, allocate resources more effectively, and concentrate on areas that directly contribute to their competitive advantage and revenue growth. This is particularly beneficial for small and medium-sized enterprises (SMEs) and startups that need to optimize their limited resources.

Market Challenges:

• Data Security and Privacy: Data security and privacy remain critical concerns in North America due to the high incidence of cyber threats and data breaches. Regulations such as the California Consumer Privacy Act (CCPA) further complicate the landscape, requiring businesses to implement stringent data protection measures. MSPs must provide robust security solutions to address these issues, ensuring compliance with regulatory requirements and safeguarding sensitive information from cyber-attacks.
• Integration with Legacy Systems: Many North American businesses operate with legacy IT systems that can be difficult to integrate with modern managed services. These older systems often lack the flexibility and compatibility needed for seamless integration, posing significant challenges for MSPs. Providing customized solutions that can work with existing infrastructure without disrupting business operations is essential, but it requires careful planning and execution.

Market Trends:

• High Adoption of Cloud-Based Services: North America is at the forefront of cloud adoption, with businesses increasingly migrating to cloud environments for better scalability, flexibility, and cost efficiency. Cloud-based managed services have become the norm, offering remote management and monitoring capabilities that allow businesses to optimize their IT operations while reducing infrastructure costs. This trend is driven by the need for agility and the ability to quickly adapt to changing market conditions
• Advanced Technologies (AI, ML, IoT): there is a strong uptake of advanced technologies such as artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT) in managed services across North America. These technologies are driving automation, predictive maintenance, and enhanced analytics, enabling businesses to operate more efficiently and make data-driven decisions. The integration of AI and ML in managed services is particularly notable in sectors like healthcare, finance, and manufacturing.

In North America, Intrusion Prevention Systems (IPS) and Intrusion Detection Systems (IDS) are leading in the managed services market due to their vital role in addressing the region's high incidence of sophisticated cyber threats and ensuring compliance with stringent data protection regulations.

IPS and IDS are indispensable because they provide a comprehensive security framework that monitors, detects, and responds to potential threats in real-time. IDS focus on identifying suspicious activities and alerting security teams about potential breaches, thereby enabling swift action to mitigate risks. Conversely, IPS takes a proactive approach by not only detecting threats but also automatically blocking harmful traffic, thereby preventing cyber-attacks from compromising network security. This dual-layered approach is essential for maintaining the integrity and security of IT infrastructures in North America. The primary drivers for the adoption of IPS and IDS in North America are the stringent regulatory environment.

Regulations such as the Health Insurance Portability and Accountability Act (HIPAA), the Sarbanes-Oxley Act (SOX), and the California Consumer Privacy Act (CCPA) impose strict requirements on data protection and privacy. Organizations must implement robust security measures, including IPS and IDS, to comply with these regulations and avoid substantial fines and legal repercussions. Managed service providers (MSPs) play a crucial role in helping businesses navigate these regulatory complexities by providing expert management of IPS and IDS systems, ensuring continuous compliance, and offering the necessary documentation for regulatory audits.

MSPs offer a cost-effective solution by providing access to cutting-edge IPS and IDS technologies and skilled security professionals. This outsourcing model allows businesses to focus on their core operations while ensuring their networks are protected by the latest security advancements. The rapid pace of technological advancement in North America means that cyber threats are continuously evolving. Attack vectors are becoming more sophisticated, requiring advanced detection and prevention mechanisms.

IPS and IDS systems in the region are increasingly leveraging artificial intelligence and machine learning to enhance their capabilities. These technologies enable the systems to learn from previous incidents, predict future threats, and adapt to new attack patterns. This adaptive intelligence is crucial in staying ahead of cybercriminals who constantly refine their tactics to bypass traditional security measures.

Large enterprises in North America are leading the managed services market due to their advanced IT infrastructure, high technological adoption rate

Large organizations in North America have a substantial edge in the managed services market because of their advanced IT infrastructure. This enhanced infrastructure enables these businesses to successfully use managed services, improving operational efficiency and driving business growth. Another important element is these companies' high level of technological adoption. They are constantly looking for novel technology to acquire a competitive advantage, and managed services provide them with the required tools and resources. North America has a very tight regulatory framework, with strict data protection and privacy rules.

Large corporations, with their resources and experience, are better suited to complying with these laws through managed services. These services employ strong security safeguards to ensure data integrity and regulatory compliance. The digital transformation wave has hit North America hard, with organizations quickly shifting to cloud-based solutions.

Large organizations are at the vanguard of this transition, using managed services to handle the difficulties of cloud migration and management. North America has a very tight regulatory framework, with strict data protection and privacy rules. Large corporations, with their resources and experience, are better suited to complying with these laws through managed services. These services employ strong security safeguards to ensure data integrity and regulatory compliance.

Cloud technology leads the managed services market in North America due to its capacity to offer scalable, cost-effective, and flexible IT solutions

Cloud services offer a unique advantage in the regard by allowing businesses to scale their IT resources up or down based on demand, thereby optimizing costs and improving operational efficiency. The significant drivers of cloud adoption in North America is the need for agility in leveraging advanced technologies such as artificial intelligence (AI), machine learning (ML), and big data analytics. The technologies require significant computing power and storage capabilities, which cloud platforms can provide more effectively and economically than traditional IT infrastructures.

Managed service providers (MSPs) offer cloud solutions that integrate these advanced technologies, enabling businesses to harness insights from data, automate processes, and innovate continuously. Cost management is another crucial factor influencing cloud adoption in the region. Cloud services operate on a subscription-based model, eliminating the need for large capital expenditures on IT infrastructure. The model allows companies to convert what would have been significant upfront costs into manageable operational expenses, making it particularly attractive to both startups and established enterprises aiming to optimize their IT budgets.

The reduced maintenance and operational overhead associated with cloud services further contribute to overall cost savings. The widespread adoption of remote work, particularly in the wake of the COVID-19 pandemic, has also accelerated the shift to cloud-based solutions in North America. Cloud technology supports remote work by providing seamless access to applications and data from any location, ensuring that employees can collaborate effectively and maintain productivity regardless of their physical location. The capability is essential for modern businesses that prioritize flexibility and resilience in their operations. The regulatory environment in North America, which includes stringent data protection and privacy laws such as GDPR, HIPAA, and CCPA, is well-supported by cloud services that offer robust security and compliance features

The BFSI (Banking, Financial Services, and Insurance) sector leads the managed services market in North America due to its need for robust, secure, and scalable IT solutions

The BFSI sector operates in a highly regulated environment, where compliance with stringent regulations such as the Sarbanes-Oxley Act, Dodd-Frank Act, and various state-specific laws is mandatory. Managed service providers (MSPs) offer specialized expertise in navigating these complex regulatory landscapes, ensuring that financial institutions can maintain compliance while focusing on their core business activities. Cybersecurity is a paramount concern for the BFSI sector. Financial institutions are prime targets for cyberattacks due to the sensitive nature of the data they handle, including personal customer information and financial transactions.

MSPs provide advanced cybersecurity solutions, including threat detection and response, encryption, and continuous monitoring, which are essential for protecting against data breaches and cyber threats. By leveraging the expertise of MSPs, BFSI companies can enhance their security posture and safeguard their critical assets. The BFSI sector also requires scalable IT solutions to manage the vast amounts of data generated daily. From transaction records to customer interactions, the data volume in the BFSI sector is immense and constantly growing. Cloud-based managed services offer the scalability needed to handle this data efficiently, allowing financial institutions to expand their IT infrastructure as their data needs grow.

This scalability is particularly important for supporting big data analytics and artificial intelligence (AI) initiatives that drive innovation and improve decision-making processes within the sector. Customer experience is another crucial aspect driving the adoption of managed services in the BFSI sector. Financial institutions are increasingly focused on enhancing customer interactions and providing personalized services. MSPs offer solutions that integrate advanced technologies such as AI, machine learning, and customer relationship management (CRM) systems to deliver a seamless and personalized customer experience.

The technologies enable BFSI companies to analyze customer data, predict trends, and tailor their services to meet individual customer needs, thereby enhancing customer satisfaction and loyalty. The rapid pace of technological change necessitates that BFSI institutions remain agile and innovative. The adoption of managed services allows these institutions to quickly implement new technologies and stay ahead of industry trends without the delays and costs associated with building and maintaining in-house IT capabilities. MSPs provide access to the latest technology and expertise, ensuring that BFSI companies can rapidly adapt to market changes and technological advancements.

The United States leads the managed services market in North America due to its advanced technological infrastructure, and large economy

As businesses move their operations to the cloud to boost scalability, flexibility, and cost-efficiency, the demand for managed cloud services has increased. Managed service providers (MSPs) in the United States provide a variety of cloud-based solutions, including infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS), to meet the varying demands of organizations across industries. Cybersecurity is a factor fueling the growth of the managed services market in the United States. With the rising frequency and sophistication of cyber threats, enterprises are prioritizing cybersecurity solutions to protect their sensitive data and key infrastructure.

Managed security services, including threat detection, incident response, and compliance management, are in great demand among US organizations. MSPs use innovative technologies and skills to deliver complete security solutions that assist enterprises in reducing risks and ensuring regulatory compliance. The United States' reputation as a worldwide technology leader is bolstered by its thriving ecosystem of technology corporations, startups, and research institutes. Silicon Valley, in particular, acts as a magnet for innovation and entrepreneurship, propelling the creation of cutting-edge technologies and solutions. The environment promotes collaboration between MSPs and technology providers, allowing for the implementation of new managed services that match the changing demands of organizations.

• In January 2023, Rackspace Technology, a multi-cloud technology solutions provider, launched Rackspace Technology Modern Operations, a managed service for public cloud for customers across Azure, AWS, and GCP. The service will provide benefits including 24x7x365 managed support, cloud expertise, cloud resiliency, and innovation with cloud services
• In March 2023, Tech Mahindra Limited announced a strategic partnership with Indosat Ooredoo Hutchison to support its first digital platform with managed services for enhanced customer service. The collaboration is helping Indosat improve its customer experience and enhance its digital growth.
• In May 2023, Alfar Capital and Walter Capital Partners completed the acquisition of MSP Corp, a managed IT service provider in Canada.

Years considered in this report:

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in the report:

• Managed Security Services market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendations

By Service Type:

• IPS and IDS
• Endpoint security
• DDOS
• Others(Threat Management, Firewall Management, Secured Information and Event Management and Others)

By Organization Size:

• Large Enterprise
• SMBs

By Deployment:

• Cloud
• On Premise

By End User:

• BFSI
• IT/ITES
• Healthcare
• Government
• Others

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases.

After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. After this, the analysts made primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once they acquired the primary data, they started verifying the details obtained from secondary sources.

Intended audience:

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Managed Security Services industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.