Cloud Managed Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The cloud-managed services market is expected to grow at a CAGR of 16% over the forecast period. The increasing need for businesses to cut down operational and infrastructural costs involved in business processes is anticipated to drive the cloud-managed services demand.

Key Highlights

• Outsourcing cloud services to third-party enables the organizations to focus on their core competencies, thereby enhancing overall productivity. The expanding data space created a higher demand for managed analytical and cloud storage services. Also, the increasing demand for reliability and scalability further elevates the need for these services, enabling enterprises to scale up their operations by providing custom-made offerings to the available services.
• As various organizations, such as American Red Cross, Netflix, and Rovio, are increasingly utilizing a wide array of Software-as-a-Service (SaaS) applications and various other cloud-based services, the demand for cloud-based managed security services is set to increase. Increasing penetration of mobile devices and the trend of BYOD in multiple organizations are also likely to drive the demand for this market, to manage these devices for utilization and security need. Around 67% of the workforce is expected to adopt their own devices, which may further drive the cloud-managed services market growth. However, concerns regarding cloud privacy are estimated to challenge the market's growth.
• The rapid adoption of cloud services drives cloud-managed services by enterprises across the world. Higher flexibility and the introduction of a 'pay as you go' model have enabled small & medium enterprises to emerge as the most promising consumers of cloud services. As a result, the cloud-managed services market is set to register high growth with the continually increasing cloud services adoption.
• Cloud-managed services involve numerous third parties outsourcing their skills, including infrastructures for web applications, virtualization, mobility, networks, endpoints, and databases. Thus, corporations may choose the cloud because sensitive business information may be exposed. MSPs assist companies in maintaining appropriate security and privacy protections for the data they deploy over the cloud. They guarantee consumers complete network security and encryption for added safety.
• Globally considered, COVID-19 altered how company operations function. The COVID-19 outbreak highlighted flaws in business models across industries, but it also provided chances for cloud-managed service providers to grow their clientele among businesses. Due to the pandemic's forced global lockdown and remote working, small and large businesses were compelled to prioritize digital transformation and heavily employ cloud services. Organizations find that switching to the cloud is more affordable and flexible.

Key Market Trends

BFSI Sector is Expected to Drive Growth in the Market

• The BFSI sector, a pioneer in adopting computer and networking systems to curtail large, space-intensive repositories and databases, is expected to have a substantial share in the cloud-managed services market during the forecast period. The BFSI sector assesses the risks accurately using big data solutions, thus, enabling firms to make informed decisions by analyzing transactional data to determine risks based on market behavior, scoring customers, and potential clients. Banks, such as BNY Mellon, Morgan Stanley, Bank of America, Credit Suisse, and PNC, are already working on strategies around big data in banking, further increasing the growth prospect for cloud-managed services.
• Banks are putting plans in place now to help them prepare for the future as they deal with shifting consumer expectations, evolving technologies, and alternative business models. Leaders in banking and capital markets are beginning to understand that the cloud is more than just a technology. It is where banks and other financial services companies may store their data and applications and access cutting-edge software online.
• The top public cloud providers provide a wide range of cutting-edge products-as-a-service that are accessible on their platforms and assist banks in implementing business and operating models to enhance revenue generation, increase customer insights, control costs, deliver market-relevant products quickly and efficiently, and assist in monetizing enterprise data assets. Additionally, the cloud presents a significant potential to integrate the business and eliminate information and operational silos across risk, finance, regulation, customer service, and other areas. Massive data sets can be combined in one location, at which point the company can use advanced analytics to gain comprehensive insights.
• Financial businesses have been forced to reevaluate their control processes due to the rise of the 'work from anywhere' concept. Also, financial institutions have felt a need to control productivity across their workforce in light of altered working conditions. Financial institutions will use the cloud to build a seamless framework for efficiency in the upcoming years. The cloud will be used to examine user online behavior trends. BFSI organizations must rely on the cloud to respond to shifting market conditions and build an office that efficiently connects international teams and clients. Lastly, to facilitate hassle-free cooperation across the enterprise, it will be advantageous to replace time-consuming control processes with easy yet safe processes using the cloud.

North America is Expected to Occupy Substantial Market Share

• North America’s strong financial position enables it to invest heavily in advanced solutions and technologies, which provides regional organizations with a competitive edge in the market. Moreover, the region includes the presence of several critical cloud-managed services vendors, such as IBM Corporation (US), CenturyLink Inc. (US), and Cisco Systems Inc. (US), among others.
• The increasing deployment of big data solutions by major IT enterprises, such as Google and Microsoft, to enhance efficiency and streamline their business operations is driving the adoption of the cloud-managed services market in this region. Companies in this region, such as IBM Corp, have invested USD 1 billion in Watson, which focuses on big data and artificial intelligence. It, in turn, is expected to drive the cloud-managed services market growth.
• Effective management remains a primary priority for most firms as cloud adoption spreads across many industrialized nations. American-based businesses have selected several methods for managing their cloud infrastructure to address this problem. Others employ a managed cloud service provider to take on the broader goal with a clear strategy for managing hybrid environments and resources. In contrast, others still manage it themselves or hire a Cloud MSP to assist with the immediate difficulties.
• In June 2022, AWS Managed Services launched Accelerate. Regardless of where customers are in their cloud journey, AWS Managed Services (AMS) Accelerate is a new cloud operations product that aids clients in achieving operational excellence. Accelerate may manage all workloads operating on AWS, and customers have full access to all AWS services. Accelerate uses AWS services like AWS Systems Manager, Amazon CloudWatch, Amazon GuardDuty, and AWS Config for operations and security. These services can be integrated with existing business processes and are more affordable than other commercial solutions. Customers can now become production-ready in a matter of days.
• Cloud-managed services have been widely adopted in North America across various industries, including manufacturing, IT, and healthcare. The North American market led to adoption of cutting-edge technical innovations, such as blending mobile, cloud, and AI technologies into a traditional cloud-managed service. The unusually high internet penetration in North American nations is one of the leading causes. There, it is anticipated that company usage of managed services will increase even further. It is important to remember that service providers who focus on client involvement should expect to benefit more from the recurring revenue model.

Competitive Landscape

The cloud-managed services market is fragmented and fiercely competitive due to a sizeable number of large and small market players. Strategic initiatives like partnerships, agreements, and acquisitions have been some of the prominent features of this market. Some major players in this market are Ericsson Inc., Accenture plc, Accenture plc, International Business Machines Corporation, Huawei Technologies Co., Ltd., and NEC Corporation, among others.

• February 2022 - LEAN, Kuwait's top national cloud solutions provider, announces introducing its cloud-managed services. The recently introduced service presents a unique option for businesses to concentrate their IT resources on attaining their goals. LEAN provides its clients with an integrated, optimized capability to manage their virtual data centers, disaster recovery, and backup & data protection services, reducing their capital and operational costs, improving security and compliance, and reducing risk with unheard-of speed and dependability. LEAN leverages its national cloud and professional services experience.

Additional benefits of purchasing the report:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

This product will be delivered within 2 business days.