The cloud managed services market is expected to grow at a Compound Annual Growth Rate (CAGR) of 10.1 percent during the forecast period, from USD 86.1 billion in 2021 to USD 139.4 billion by 2026. Large enterprises and SMEs are rapidly adopting innovation management solutions due to a variety of benefits, including increased digitization and the emerging trend of workplace transformation, lower costs, more efficient collaborations, and shorter time to market for new products.
COVID-19 has an impact on the cloud managed services market.
The COVID-19 has had a variety of effects on the global cloud-managed business service market, including direct effects on production and demand, disruption of supply chains and marketplaces, and a financial impact on businesses and financial markets. Because of the COVID-19 pandemic, there has been an increase in the use of cloud, AI, and big data. Many businesses have implemented new policies and regulations regarding remote working.
Dynamics of the cloud managed services market
Drivers: A preventative maintenance strategy
A business owner has no or little time to consider IT infrastructure and its functions. However, IT system maintenance is critical for business continuity. This necessitates the use of Managed Service Providers (MSPs), who can proactively resolve any issues that arise in IT systems. Most MSPs offer round-the-clock monitoring, which entices customers to use their services. Security solutions monitor IT systems for potential threats or disruptions. Bugs and issues are frequently troubleshooted and resolved before they become a major concern for the company. This allows business owners to concentrate on their core competencies rather than worrying about IT systems and maintenance.
Restriction: Data security and privacy
Cloud managed services entail several third parties outsourcing their skills, which can raise security and confidentiality concerns. Infrastructures in mobility, networks, endpoints, databases, cloud, web applications, and virtualization are all included. With this, any cloud MSP can easily expose critical business details. As a result, for businesses, security and privacy concerns remain the primary impediments to adopting cloud managed services. MSPs, on the other hand, assist organisations in maintaining proper security and privacy measures for the data that they deploy in the cloud. Customers are provided with end-to-end network protection and encryption for added security. However, due to the increasing number of data breaches, organisations are hesitant to provide sensitive business data to MSPs.
Growth in anything-as-a-service technologies provides opportunities.
Anything-as-a-Service is another name for XaaS. Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS) are the three pillars of cloud computing that support a wide range of services. As end users realise the benefits of XaaS and cloud computing, they are growing at a faster rate. Organizations are even using various technologies, such as network-as-a-service and IoT-as-a-service, as a managed service. MSPs can easily provide these because they have the necessary infrastructure and expertise in place. These services can be used in core business functions by organisations on a pay-per-use basis. This, in turn, ensures that their IT budgets are used to their full potential. The primary advantage is the shift from Capital Expenditure (CAPEX) to Operational Expenditure (OPEX), resulting in a lower Total Cost of Ownership (TCO). For these cloud managed services, the most recent software updates can also be easily deployed over the cloud.
Cloud invoices and multiple accounts pose difficulties.
Cloud invoices are frequently difficult to comprehend and analyse. The billing structure is almost completely ambiguous. Multi-cloud services bring together multiple systems and services under one roof. If not properly planned, consolidating, managing, and monitoring the use of statistics for billing is a significant challenge. Frequently, billing from the original cloud providers does not match billing from MSPs, which irritates customers and harms the relationship. Furthermore, billing for the hybrid cloud setup becomes more complicated. SaaS is typically priced on a monthly basis, whereas IaaS resource usage is charged on a per-use basis. Customers want to know the specifics of their consumption. Customers will abandon services if MSPs do not provide well-structured and clear billing.
During the forecast period, the Managed Infrastructure services segment is expected to have the largest market size.
Data centre hosting, colocation, or a cloud-based Data Center as a Service (DCaaS) platform can all be used to obtain managed infrastructure. Managed infrastructure services assist organisations in lowering the costs associated with cooling requirements and power consumption, as well as simplifying resource and data management. MSPs provide comprehensive hosting services, including secure hosting of web or other application servers, as well as related internet connectivity.
Large enterprises are increasingly embracing cloud-managed services.
On the basis of organisation size, the Cloud Managed Services Market is divided into SMEs and large enterprises segments. Cloud managed services are critical for all organisations, regardless of size, to grow. A general market scenario involves enterprises that can afford to outsource their services due to cost, but with dynamically changing business frontiers, MSPs around the world are offering specialised services even to SMEs by offering appealing subscription models. Large enterprises preferred to have dedicated IT staff and only used other providers for broadband. Recently, these businesses have begun to use their IT personnel for core activities while outsourcing support services; as a result, managed services are gaining traction in large enterprises. Because of the affordability of resources and the high economies of scale, these organisations can reap the benefits of managed services.
Banking, financial services, and insurance are expected to have a larger market share.
The cloud managed service gives users more options, simplifies banking, and creates a more positive customer experience. Because the BFSI industry vertical is highly customer-centric, improving customer experiences is of the utmost importance. MSPs ensure needs-based customization, which can improve the overall functionality of the core business. Outsourcing assists banks in reducing costs and increasing efficiency. It also allows for greater focus on core competencies, risk reduction, improved customer relations, and regulatory compliance.
