Outsourced IT Service Demand Driving Managed Services Market Growth

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The Managed Services Market is set to enjoy continuous growth in the next five years as reported in the new industry study by market research company, MarketsandMarkets. According to the report, the global Managed Services Market size is expected to reach $354.8 billion by 2026 from $242.9 billion in 2021 at a Compound Annual Growth Rate (CAGR) of 7.9% during the forecast period. The adoption of cloud technology, outsourcing of IT management, security, and lower ownership cost are some of the key factors that are driving the growth of the Managed Services market.

The major industries leveraging Manage Services include healthcare, BFSI, retail and consumer goods, telecom and IT, manufacturing, and energy and utilities. Meanwhile, North America and Europe are still the largest regions of the market but APAC is a high-growth region. As more SMEs in the APAC region flourish and scale up their operations in the major industries included in the report, the demand for Managed Services will also continue to rise.

Relying on MSPs for Agility, Cost Savings, and Other Business Benefits

Every company is a technology company. This statement has made its round in the business world for good reason. No business today can efficiently market, create, and sell its products or services without using technology.

But there’s a problem—technology doesn’t come cheap. Aside from investing in software and hardware, you’ll need to have a skilled team to maintain your IT assets. So what do businesses do? They turn to Managed Services Providers (MSP).

MSPs take the load off businesses when it comes to managing business IT services. MSPs can provide a packaged list of services or a customized one as determined by their client. MSPs are responsible for the maintenance of all services and equipment indicated and managed under a Service Level Agreement (SLA). Businesses or end-users only need to pay a monthly subscription for the service.

Outsourcing IT services and technical support to MSPs is not only a solution for current business needs. It’s also a very cost-effective and agile way to scale up operations when the need arises. For example, a company that has to immediately deploy a contact center in a new branch office can do so by leveraging the services of MSPs. The company can offload general tasks involved in setting up the IT backbone of the contact center onto the MSP instead of building everything in house. This approach can significantly reduce costs in tech investments and free their internal team to work on high-value tasks crucial to the project’s success.

Aside from addressing the financial and technical aspects of business expansion, relying on the expertise of MSPs is also an effective way to bridge the skills gap prevalent in the IT industry. Small and medium enterprises that are ready to expand their operations are often held back by the lack of the right talent. The ongoing IT talent shortage, especially of software developers, is an excellent use case for MSP.

Security is another important consideration for any business with IT assets and data to manage. Cyberattacks are not only costly but are also potentially damaging to business reputation. Leaving security in the hands of untrained end-user employees can be a recipe for disaster; thus, companies often enlist the expertise of MSPs to monitor endpoints, networks, and the entire enterprise tech stack.