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The Global Market For Managed IT Services Reached $149.1 Billion In 2016

NEW YORK, Jan. 3, 2018 /PRNewswire/ -- • The global market for managed IT services reached $149.1 billion in 2016. This market is estimated to reach $256.5 billion in 2021 from $166.7 billion in 2017 at a compound annual growth rate (CAGR) of 11.5% for 2017-2021.

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  • The United States market will grow from $62.0 billion in 2017 to $94.5 billion in 2021 at a CAGR of 11.1% for 2017-2021.
  • Infrastructure services constitutes the largest segment of the managed IT services market at 47.1% of total sales followed by network services and security services.

Chapter 1: Introduction
BCC Research's goal in performing this study was to determine the global market size and future demand growth for managed IT services. Of particular interest is characterizing and quantifying the market potential for managed IT services by geography and product (i.e., infrastructure services, network services, security services and other services).

The report also evaluates the market by segments such as infrastructure services, network services, security services and other services. Opportunities in lucrative segments have been discussed in detail.

Drivers, restraints and trends that affect the market have been discussed. The key objective was to present a comprehensive discussion of the managed IT services market and forecast the future potential for the key market segments/geographies.

This discussion provides a basis for companies to make strategic choices about developing new products and markets or decide which segments to enter based on the current dynamics.

The study will benefit managed IT service providers, new entrants, MSP software vendors, users of managed IT services, and cloud service providers.

Study Goals and Objectives

  • To calculate the global managed IT services market size, both historic and forecast.
  • To estimate the growth rate of the global and USA managed IT services market. 
  • To segment the market.
  • To provide a geographical breakdown of market numbers.
  • To identify major drivers and restraints on the market.
  • To identify key trends and technology updates in the field.

Reasons for Doing This Study
Changes such as increasing digitization and migration to the cloud infrastructure led to increase in demand for managed IT services and changed the market dynamics globally. This means that market participants need to adjust to a new market reality, which is described in this report.

Global industry leaders and large organizations see an increasing trend of outsourcing across various industries to drive the managed IT services market.

Some of the major trends to be noted are as follows:
Increasing demand from cloud based services from the banking, financial services and insurance, technology, and healthcare industries is expected to drive this market. Many companies are expanding their geographical presence inorganically through mergers and acquisitions.

Moreover, there is increasing government support for IT initiatives and use of technology in their processes. These factors are expected to drive the global managed IT services market.

The global managed IT services market is concentrated with the leading three players collectively having more than 50% of the market. Major players in the market include IBM, DXC Technology, Fujitsu and Atos and others.

Scope of Report
This research report covers the overall global managed IT services market and categorizes it by geographies and by service type. Service types include infrastructure services, network services, security services and other services.

Information Sources

  • Public information via annual reports to shareholders as well as other government reports that are available for public review.
  • Company marketing information, advertising, company press releases, state and local news sources, and subscription-based information.
  • Online research including third-party references.
  • Trade associations, directories and publications.
  • Telephone interviews with both top industry experts, service providers, software providers and others (see Appendix for interview summaries)
  • Various private proprietary data sources.

The research methodology followed in this report is a top-down approach. The sources listed above were used to arrive at the total market figure, which was broken down into various services and sub markets based on primary and secondary data.

Both quantitative and qualitative approaches were used to derive the market size and growth rates. Many secondary sources were reviewed and extensive primary research was conducted with key opinion leaders, marketing managers, product managers and end users. All data points and assumptions are sourced through end note references.
Market numbers have been calculated in constant US dollars based on 2016 exchange rates.

Geographic Breakdown

In this report, the geographic regions considered for market analysis include, and only include:

  • United States
  • Europe
  • Asia-Pacific
  • Middle East and Africa
  • Americas excluding USA

Managed IT Services, by Service Type
Managed Infrastructure Services
Managed Network Services
Managed Security Services
Other Manged IT Services

Chapter 2: Summary and Highlights
This report analyzes the market for global managed IT services. A managed IT service is any type of IT task or service offered by an outside contractor. A managed services provider (MSP), which is generally an information technology (IT) services provider, manages and assumes responsibility for providing a defined set of services to its clients based on their specific needs.
Managed IT services are classified based on the type of service being offered by an enterprise. It is segmented into infrastructure services, network services, security services and other services.

However, most of the managed IT service providers offer all these services and there is some overlap between segments. For instance, infrastructure tasks might be clubbed into network services as they are network- related infrastructure services.
The global managed IT services in 2016 is estimated to be around $149.1 billion. During 2017-2021 the global managed IT services market is expected to grow at a CAGR of 11.5%, to reach $256.5 billion by the year 2021. Increasing digitization and improving economic growth prospects are expected to drive the demand for managed IT services in the future. In particular to rising demand for managed IT services from small and medium enterprises and the emerging markets such as China and India.

Banking, financial services and insurance (BFSI) was the largest customer group for managed IT Services in 2016, accounting for 32% of the market. This was followed by the government and public, telecoms and IT, and healthcare segments. The total revenues from banking, financial services, and insurance were $48.5 billion in 2016. The market importance of the banking, financial services, and insurance segment can be attributed to those end users' focus on core competencies, risk reduction, improved cost reduction, customer relations, and improved regulatory compliance.

High share of government sector is due to its high reliance on outside contractors to maintain IT infrastructure to focus on its core competencies which has led to high growth in this customer segment.

In 2016, the US managed IT services accounted for 37.2% of the market, followed by Europe and Asia Pacific with23.7% and 20.0% of the market respectively. High share of USA market size can be attributed to demand for managed services such as dedicated cloud and data center services. This is also due to high adoption of technology and digitization compared to other regions across the world which has led to high growth in this region.

The global managed IT services market is concentrated, with the leading three players having more than 50% of the market. IBM was the largest company with 24% of the market, followed by DXC with 15%, Fujitsu with 14%, Atos with 8% and Deutsche Telekom with 6%.

Most companies operating in the mid-level range are exclusively from a managed IT services background, unlike large players which are operating in multiple categories in the IT industry and are leveraging their economies of scale to position themselves as top players.

To be successful, any managed IT service provider should partner with IT consulting companies and offer its services on a cloud platform to target a wider customer base. They should concentrate on managed security services, which is a highly profitable segment and should innovate and launch advanced products such as white label products which can be easily customized according to client needs to differentiate their service.

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