North America Cloud Managed Services Market Outlook, 2029

The cloud managed services sector in North America has a long history, highlighted by significant technical breakthroughs and changing business requirements. This industry arose in the early 2000s alongside the rise of cloud computing, driven by the need for enterprises to manage more complex IT infrastructures effectively. Initially, the emphasis was on basic infrastructure management; however, as cloud technology advanced, services extended to include network management, security, and application optimization. The cultural shift within firms toward digital transformation has been a crucial catalyst, with businesses realizing the strategic advantage of outsourcing cloud management to specialized providers.

The shift is strongly entrenched in the desire for agility, scalability, and the capacity to remain competitive in a fast-paced market. Environmental issues have been essential to the growth of cloud managed services in North America. As data centers consume large amounts of energy, there is a rising emphasis on sustainability. Green practices are becoming more common among service providers, such as the use of renewable energy sources, increased energy efficiency, and the implementation of carbon offset plans. The effort is consistent with broader corporate social responsibility programs and governmental requirements to decrease carbon footprints.

Innovations in cooling technology and server workload management also help to reduce environmental effect, demonstrating a dedication to more sustainable operational methods. Artificial intelligence, automation, and edge computing innovations have all had a substantial impact on the growth of cloud managed services in North America. AI and machine learning are transforming service delivery by allowing for predictive maintenance, improved security through anomaly detection, and automated resource management. Automation tools improve operations by minimizing human error and operating costs.

Edge computing, which moves data processing closer to the source, reduces latency and facilitates real-time analytics, hence improving the capabilities of managed services. The business still confronts numerous obstacles. Security remains a top priority, as the sophistication of cyber-attacks grows, necessitating powerful, scalable security solutions.

Compliance with various regulatory frameworks across industries adds another level of complexity. The rapid growth of technology produces an ongoing demand for highly skilled personnel, resulting in a skills gap that may impede service delivery. Service providers continue to face issues in managing operational expenses and delivering a clear return on investment to clients.

According to the research report, the North America cloud services market was valued at more than USD 31 Billion in 2023. Understanding the evolving preferences and trends among enterprises and organizations is crucial for success in the cloud services market. Factors such as service offerings, security, scalability, and branding play significant roles in shaping customer purchasing decisions. Cloud service providers must adhere to stringent regulatory and compliance standards to ensure that their services meet or exceed security and data protection requirements, including regulations related to data privacy, cybersecurity, and industry-specific standards.

Cloud services must be reliable and flexible to accommodate the dynamic needs of businesses and their growing digital transformation initiatives. Cloud service providers that prioritize high availability, ease of integration, and practical features such as auto-scaling and managed services are favored by enterprises. As for key players in the North American cloud services market, there are numerous providers catering to various segments of the market. Amazon Web Services (AWS) specializes in a comprehensive range of cloud services, known for its extensive product portfolio. Microsoft Azure is popular for its extensive global presence and enterprise-grade offerings.

Google Cloud Platform, part of Alphabet Inc., provides diverse cloud services and solutions for businesses of all sizes, while IBM Cloud, another prominent player, offers a range of cloud services, including hybrid and multi-cloud solutions. Affordability is a key consideration for many enterprises when adopting cloud services. Cloud service providers that offer a balance between quality and cost, along with flexible pricing models and occasional promotions or discounts, can attract cost-conscious customers. Cloud service providers need to continuously innovate and differentiate their offerings to stand out in a crowded market.

Major Drivers:

• Data Protection and Privacy Regulations: GDPR compliance is paramount in Europe, leading businesses to choose cloud managed service providers that offer robust data protection measures and adherence to European data privacy regulations.
• Hybrid Cloud Adoption: Many European businesses adopt a hybrid cloud approach due to data sovereignty concerns. Cloud managed services that facilitate seamless integration between on-premises and cloud environments are in demand.

Major Challenges:

• GDPR Compliance: Compliance with the General Data Protection Regulation (GDPR) is a major challenge for cloud managed service providers in Europe. Ensuring that data processing activities comply with GDPR requirements, including data protection, privacy rights, and cross-border data transfers, requires significant investment in resources and technology.
• Data Localization Laws: Some European countries have strict data localization laws requiring data to be stored and processed within national borders. Cloud managed service providers must navigate these laws while offering scalable and cost-effective cloud solutions

Market Trends:

• GDPR Compliance and Data Privacy: The enforcement of the General Data Protection Regulation (GDPR) continues to drive cloud adoption trends in Europe. Companies are increasingly seeking cloud managed services that offer robust data protection measures and compliance with GDPR regulations to ensure the security and privacy of their data.
• Sustainability and Green Cloud: Environmental sustainability is gaining prominence in Europe, leading to the rise of green cloud solutions. Cloud managed service providers are investing in renewable energy sources and energy-efficient data centers to reduce carbon emissions and meet the growing demand for eco-friendly cloud services.

The Managed Network Services is leading the cloud managed services market in North America due its ability to provide comprehensive and scalable network solutions tailored to the evolving needs of businesses.

Several reasons contribute to Managed Network Services' dominant position in North America's cloud managed services market. For starters, the increasing complexity of IT infrastructure and the growing requirement for reliable network connectivity have prompted enterprises to seek specialist knowledge and outsourced solutions. Managed Network Services companies provide complete network management, including design, installation, monitoring, and maintenance, reducing the workload on in-house IT teams and allowing businesses to focus on their core operations. The rising adoption of cloud computing and the transition to distributed workforce models have mandated dependable and secure network access.

Managed Network Services companies have made significant investments in developing and maintaining resilient network infrastructures, employing modern technologies such as software-defined networking (SDN) and network function virtualization (NFV). These technologies offer seamless integration with cloud services, allowing enterprises to reap the benefits of cloud computing while maintaining optimal network speed and security. Managed Network Services companies give scalable and adaptable solutions that can meet the changing needs of enterprises. As firms grow or embark on digital transformation efforts, their network requirements change.

Managed Network Services providers can dynamically adapt network resources, bandwidth, and security measures to account for these changes, assuring continuous operations and reducing downtime. Managed network service providers contribute to their market dominance. These providers employ teams of highly skilled network engineers and specialists who have a thorough understanding of several business verticals, allowing them to create specialized solutions that match the specific needs of diverse sectors such as healthcare, banking, and manufacturing.

The Large Enterprises are leading the cloud managed services market in North America is due to their ability to leverage economies of scale and capitalize on the extensive resources and expertise offered by cloud managed service providers

Cloud managed service providers offer comprehensive services tailored to meet the demanding requirements of Large Enterprises, including advanced security measures, high-performance computing capabilities, and seamless integration with existing systems. Large Enterprises often operate in multiple geographic locations and across different industries, necessitating a high degree of flexibility and agility in their IT infrastructure. Cloud managed services enable these enterprises to quickly adapt to changing business needs, scale up or down their IT resources on-demand, and maintain a consistent level of service across all their operations.

This flexibility is particularly crucial in today's rapidly evolving business landscape, where companies must respond swiftly to market changes and new opportunities. Large Enterprises have substantial IT budgets and resources, allowing them to invest in cutting-edge technologies and services offered by cloud managed service providers. These providers continuously invest in research and development, staying ahead of the curve in terms of technological advancements and industry best practices. By partnering with cloud managed service providers, Large Enterprises can leverage these innovations without the need for substantial in-house IT expertise or capital expenditure.

Cloud managed services offer significant cost savings and operational efficiencies for Large Enterprises. Cloud managed service providers have robust security protocols, industry-specific certifications, and dedicated compliance teams to ensure that their clients' IT infrastructures and operations adhere to the strictest standards and regulations.. The factor contributing to the adoption of cloud managed services by Large Enterprises is the ability to access a vast pool of highly skilled IT professionals.

Cloud managed service providers employ teams of experts with diverse specializations, enabling them to provide comprehensive support and customized solutions tailored to the unique needs of each client. This access to specialized expertise is particularly valuable for Large Enterprises that require advanced IT services but may face challenges in attracting and retaining top talent in-house.

The main reason private cloud deployment models are leading the cloud managed services market in North America is the need for enhanced data security, and control

Private cloud deployment models offer a heightened level of security and control, as the cloud infrastructure is dedicated solely to a single organization and hosted either on-premises or in a secure, remote data center. The approach minimizes the risks associated with multi-tenancy models found in public clouds, where resources are shared among multiple organizations.

By deploying private clouds, enterprises can ensure that their data remains isolated and protected from potential vulnerabilities introduced by other tenants. The models enable enterprises to maintain complete control over the physical location of their data and IT infrastructure, ensuring compliance with data sovereignty and localization regulations.

The private cloud deployment models offer greater flexibility and customization capabilities compared to public clouds. Enterprises can tailor the cloud environment to their specific workloads, applications, and business processes, ensuring optimal performance and efficiency. This level of customization is particularly important for enterprises with unique or legacy applications that may not be compatible with public cloud environments. Private cloud deployment models provide enterprises with greater control over resource allocation and scalability.

This control is crucial for enterprises with dynamic workloads or seasonal demand fluctuations, as they can quickly provision or decommission resources based on their specific needs, optimizing costs and ensuring efficient resource utilization. While public cloud solutions offer cost savings and scalability benefits, many enterprises in North America prioritize data security, control, and compliance over cost considerations, especially in highly regulated industries. The private cloud deployment models have emerged as the preferred choice for cloud managed services, enabling enterprises to leverage the benefits of cloud computing while maintaining the highest levels of security, control, and regulatory compliance.

The main reason why the Telecom & IT-Enabled Services (ITES) sector is leading the cloud managed services market in North America is due to the need for scalable, secure, and reliable IT infrastructure

Cloud managed services providers offer the flexibility and scalability required to quickly provision or decommission IT resources, enabling telecom and ITES companies to respond swiftly to market changes, launch new services, and accommodate fluctuations in demand. The Telecom & ITES sector handles vast amounts of sensitive data, including customer information, financial transactions, and proprietary business data. This data must be safeguarded against cyber threats, ensuring compliance with stringent data protection regulations and industry standards.

Cloud managed services providers offer robust security measures, advanced threat detection and response capabilities, and dedicated compliance teams to help telecom and ITES companies meet these critical security and regulatory requirements. Downtime or service disruptions can lead to significant financial losses, customer dissatisfaction, and reputational damage. Cloud managed services providers offer highly redundant and resilient IT infrastructures, ensuring business continuity and minimizing the risk of service outages or data loss. The Telecom & ITES sector is at the forefront of emerging technologies such as 5G, Internet of Things (IoT), and cloud computing.

These technologies require specialized expertise and advanced IT infrastructure to support their implementation and operation. Cloud managed services providers possess the necessary skills and resources to design, deploy, and manage these cutting-edge technologies, enabling telecom and ITES companies to stay ahead of the curve and deliver innovative services to their customers. The factor behind the adoption of cloud managed services in the Telecom & ITES sector is the need for cost optimization and operational efficiency.

By outsourcing their IT infrastructure management to specialized providers, telecom and ITES companies can reduce the overhead costs associated with maintaining an extensive in-house IT team and infrastructure. Cloud managed services providers leverage economies of scale and optimized resource utilization, enabling them to offer cost-effective solutions without compromising on quality or performance.

The primary factor driving the US's dominance in the North American cloud managed services market is its status as a major international center for technological innovation and investment

The United States boasts a thriving ecosystem of technology hubs, including Silicon Valley, Seattle, and Boston, which serve as epicenters for innovation, entrepreneurship, and investment in the tech sector. These regions are home to a vast network of leading technology companies, startups, research institutions, and venture capital firms, fostering a culture of innovation and collaboration that drives the development and adoption of cutting-edge technologies, including cloud computing. The US has a long history of pioneering breakthroughs in information technology, with many of the world's most influential tech giants, such as Amazon, Microsoft, Google, and IBM, originating from the country.

These companies have played a pivotal role in shaping the evolution of cloud computing, introducing groundbreaking cloud services and platforms that have revolutionized how businesses manage their IT infrastructure and services. US benefits from a robust ecosystem of tech-savvy talent, including skilled engineers, developers, data scientists, and cybersecurity experts, who contribute to the continuous advancement and innovation of cloud managed services. The country's renowned universities and research institutions produce a steady stream of top-tier talent, while its open immigration policies attract highly skilled professionals from around the world, further enriching the talent pool.

The US government has been supportive of the tech industry, implementing policies and initiatives to foster innovation, entrepreneurship, and digital transformation. Initiatives such as the Cloud First policy, established in 2010, have encouraged federal agencies to prioritize cloud-based solutions, driving demand for cloud managed services across the public sector.

• In July 2021, Tata Consultancy Services (TCS) launched its Cloud Exchange platform to help businesses manage their hybrid and multi-cloud environments more effectively.
• In March 2021, Accenture acquired Cloudworks, a Brazil-based cloud services provider, to expand its cloud migration and management services in South America.

Years considered in this report:

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

Aspects covered in the report:

• Cloud Managed 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:

• Managed Business Services
• Managed Network Services
• Managed Security Services
• Managed Infrastructure Services
• Managed Mobility Services

By End-user:

• SMEs
• Large Enterprises

By Cloud Deployment:

• Public
• Private

By Verticals:

• Telecom & ITES
• BFSI
• Retail & Consumer
• 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 cloud managed 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.