Overview:
Cloud managed services market is set to reach US$ 41.92 Bn by 2026 up from US$ 22.87 Bn in 2017, growing with a CAGR of 7.0% during the forecast period from 2018 to 2026. In recent years, cloud managed services market has witnessed an accelerated growth due to advancements in big data, mobility services and cloud computing. Cloud computing has gained immense significance for delivering IT-enabled business services and storage platforms, thereby creating immense opportunities for related managed services. Cloud managed services help organizations to replace functions including managing IT infrastructure and security & compliance needs of the organizations that incur significant recurring costs and affect their core competencies. Increasing use of cloud-based applications has stimulated businesses to outsource their operations to third-party managed service providers, thereby achieving better focus on their core business processes.
Cloud managed services market is highly driven by the rapidly growing penetration of cloud services across the world. Due to higher flexibility and introduction of ‘pay as you go’ model, small & medium enterprises have emerged as the most promising consumers of cloud services. Outsourcing cloud services to third-party enables the organizations to focus on their core competencies, thereby enhancing the overall productivity. Subsequently, cloud managed services market is set to register high growth with continually increasing adoption of cloud services. Adoption of cloud services has gained tremendous popularity in small & medium sized enterprises and is helpful in reducing costs with regards to IT resources, power and energy. Additionally, adoption rates of cloud technology in SMEs is very strong, making it a promising segment for these services. For instance, in 2016, India had over 32% adoption of cloud services, followed by Brazil with 29%, China having 22% and the U.K. with 18% adoption rate. Similarly, the U.S. currently holds 37% adoption of cloud services and is expected to reach 78% by 2020, doubling the country’s SME businesses as they are fully adapting to cloud computing technology.
"Growing usage of mobile devices to impel the adoption of cloud managed mobility services"
Amongst all services type, mobility services contributes to the largest market share, followed by security services. With growing adoption of bring your own devices (BYOD) concept and growing usage of mobile devices, business organizations are more inclined to outsource cloud managed services. Organizations use mobility services for marketing and advertising purposes, which is gaining high traction in the cloud managed services market. In addition, emergence of e-commerce (across food, travel and retail) has surged the need for mobility services. Subsequently, mobility services segment is presumed to grow incrementally during the forecast period. Further, managed cloud security services segment is also anticipated to grow significantly due to growing concerns related to cloud security. With the advent and adoption of IoT and big data, the requirement for security and data management has emerged as a key concern. As a result, security has become an inseparable part of cloud operations, making it a promising segment in the market.
"Healthcare to emerge as the fastest growing segment"
Cloud managed services help organizations reduce their IT costs and enables them to scale-up/scale-down their business operations with ease and flexibility. Currently, the market is led by the BFSI and IT & Telecom segments collectively accounting for nearly 48% of the total market value. This is primarily due to high usage of cloud services across these sectors. Further, healthcare segment is expected to grow with the fastest rate during the forecast period. With increasing efforts towards enabling healthcare IT interoperability, healthcare facilities are increasingly looking up to cloud computing as a viable storage platform. This is expected to trigger strong demand for cloud services in the following years. Acceptance of digital healthcare technology is gaining traction in the global healthcare industry. According to Forbes, around 80% of doctors used medical apps and smartphones; while over 72% regularly access the drug information on the smartphones, as of 2017. Patients are able to access their test results 24/7 online as hospitals and clinics are now storing the medical records on cloud. As a result, healthcare segment is expected to demonstrate the highest growth rate in the overall cloud managed services market.
"North America to continue its supremacy on the market, followed by Asia Pacific and Europe"
North America currently holds the largest share in cloud managed services market due to high adoption of cloud services in the region. Rapid adoption of cloud platform and cloud applications is helping the cloud managed services market to grow incrementally. In addition to this, presence of some major players such as International Business Machine Corporation (IBM) and Cisco Systems, Inc. further supports the regional market growth.
Further, Asia Pacific have major growth opportunities due to the growing cloud service adoption and government initiatives towards boosting the adoption of cloud services. For instance, Digital Japan Creation Project and Digital India are some of the government initiatives that are spurring the adoption of cloud services, thereby driving the demand for related managed services. The cloud market in Asia Pacific is accelerating as enterprises are embracing cloud services with an intention of enhancing IT operation and reduced overheads.
During 2018, over 70% enterprises in Asia Pacific are expected to adopt multi-cloud strategy, which enables greater choice, operational impact and flexibility for companies adapting to the needs of modern day business. Furthermore, Europe is expected to witness robust growth due to increasing penetration of cloud-based services. Moreover, in Western Europe, over 64% of small & medium enterprises are already using cloud-based services. Thus, the small and medium enterprises market in Europe is expected to emerge as major driving sector during the forecast period.
Inorganic growth to remain the key strategy
The cloud managed services market is highly fragmented due to the presence of large number of players. The market comprises numerous small scale as well as international tech giants. In order to serve the cloud managed services market in a better way, these market players have adopted several key strategies such as mergers & acquisitions, partnerships, collaborations and new product development. For instance, in October 2017, IBM launched two new cloud deployment and migration services namely IBM Cloud Deployment and IBM Cloud Migration. The new cloud services are intended to make it more straightforward for businesses to move their information and packages to the cloud.
Similarly, in May 2017, IBM entered into an agreement to acquire Verizon’s cloud and hosting business. IBM will be working on the strategic initiatives involving cloud and networking services. The acquisition has helped IBM to expand its cloud business, which continues to be a major source of company’s overall growth. Some of the prominent players profiled in the cloud managed services market include International Business Machines (IBM) Corporation, Cisco Systems, Inc., Ericsson AB, Accenture PLC, NTT DATA Corporation, Fujitsu Ltd., CenturyLink, Inc., Huawei Technologies Co., Ltd., Nokia Corporation, NEC Corporation, Civica Group Ltd. and DXC Technology Company.
Historical & Forecast Period
This study report represents analysis of each segment from 2022 to 2032 considering 2023 as the base year. Compounded Annual Growth Rate (CAGR) for each of the respective segments estimated for the forecast period of 2024 to 2032.
The current report comprises of quantitative market estimations for each micro market for every geographical region and qualitative market analysis such as micro and macro environment analysis, market trends, competitive intelligence, segment analysis, porters five force model, top winning strategies, top investment markets, emerging trends and technological analysis, case studies, strategic conclusions and recommendations and other key market insights.
Research Methodology
The complete research study was conducted in three phases, namely: secondary research, primary research, and expert panel review. key data point that enables the estimation of Cloud Managed Services market are as follows:
Market forecast was performed through proprietary software that analyzes various qualitative and quantitative factors. Growth rate and CAGR were estimated through intensive secondary and primary research. Data triangulation across various data points provides accuracy across various analyzed market segments in the report. Application of both top down and bottom-up approach for validation of market estimation assures logical, methodical and mathematical consistency of the quantitative data.
| ATTRIBUTE | DETAILS |
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| Research Period | 2022-2032 |
| Base Year | 2023 |
| Forecast Period | 2024-2032 |
| Historical Year | 2022 |
| Unit | USD Million |
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Region Segment (2022-2032; US$ Million)
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Key questions answered in this report
