Welcome to our blog post on the latest statistics and insights about the Managed Service Provider (MSP) industry. In this article, we will delve into the key trends, growth projections, and challenges facing the MSP industry in order to help you stay informed and make data-driven decisions. Let’s explore the fascinating world of managed service providers together.
The Latest Managed Service Provider Industry Statistics Explained
As of 2021, the Managed Services Market is forecast to reach $319.5 billion by 2024.
The statistic indicates that the Managed Services Market is projected to grow significantly, reaching a value of $319.5 billion by the year 2024 from the baseline data as of 2021. This forecast highlights a forecasted increase in demand for managed services over the next few years, suggesting that businesses and organizations are increasingly turning to managed services providers for outsourced IT services, cloud solutions, security services, and other technology-related support. This growth trajectory implies a notable market opportunity for companies operating in the managed services sector and suggests a shifting trend towards leveraging external expertise to support business operations and technology infrastructure.
The managed services market size is expected to grow at a CAGR of 10.8% in the forecast period of 2021–2026.
This statistic indicates that the managed services market is projected to experience a Compound Annual Growth Rate (CAGR) of 10.8% over the period from 2021 to 2026. A CAGR is a consistent rate of growth over a specified period of time, smoothing out fluctuations and providing a more accurate representation of growth trends. In this context, a CAGR of 10.8% suggests that the market is expected to expand steadily over the forecast period, highlighting the increasing demand for managed services and the potential for significant growth opportunities within the industry.
By service type, the Managed IT Services segment is forecast to reach USD 186.33 Billion by 2026.
This statistic indicates a projected financial value of USD 186.33 Billion for the Managed IT Services segment by the year 2026. This forecast encompasses the total revenue that is expected to be generated within the Managed IT Services sector, which includes various IT services such as infrastructure management, security solutions, cloud computing, and network monitoring, among others. The figure serves as an estimate based on market trends, growth projections, and current industry insights, suggesting a significant growth and demand for Managed IT Services over the coming years.
Nearly 70% of Small to Midsize Businesses (SMBs) hire IT service providers for IT solutions and consulting advice.
The statistic that nearly 70% of Small to Midsize Businesses (SMBs) hire IT service providers for IT solutions and consulting advice indicates a strong reliance on external expertise in the technology sector among SMBs. This high percentage suggests that SMBs recognize the complexity and importance of IT in their operations, and they are willing to seek specialized help to navigate technological challenges and opportunities. By turning to IT service providers for solutions and consulting advice, SMBs are leveraging external knowledge and resources to enhance their IT capabilities, improve efficiency, and stay competitive in a fast-paced digital landscape.
North America is expected to hold the largest Managed IT Services Market share due to the early adoption of technology.
The statistic that North America is expected to hold the largest share of the Managed IT Services Market due to early adoption of technology can be understood as a reflection of the region’s proactive approach towards embracing and integrating technological advancements into their business operations. North American businesses tend to be early adopters of new technologies, which positions them ahead of the curve in leveraging Managed IT Services to optimize their IT infrastructure, maximize efficiency, and drive business growth. This propensity for early adoption gives North America a competitive edge in the Managed IT Services Market, leading to a larger market share compared to other regions that may lag behind in technology adoption.
By 2023, the Managed Services Provider market will be 40% larger than the 2018 market.
The statistic is predicting that by the year 2023, the market for Managed Services Providers (MSPs) will have increased in size by 40% as compared to its size in 2018. This indicates a significant growth trend in the demand for MSP services over the specified time period. Such growth could be driven by various factors such as increasing adoption of cloud computing, cybersecurity concerns, digital transformation initiatives by businesses, and the need for efficient IT support and management services. This forecast suggests that businesses are increasingly recognizing the value and benefits of outsourcing their IT functions to specialized service providers, leading to a substantial expansion of the MSP market in the coming years.
The top five global Managed Service Providers hold approximately 25% of the total market share.
The statistic that the top five global Managed Service Providers (MSPs) hold approximately 25% of the total market share implies that there is a significant level of concentration within the MSP industry, with a small number of providers dominating a significant portion of the market. This suggests that these top players are well-established and preferred by a substantial number of clients, potentially due to a strong reputation, wide service offerings, competitive pricing, or other factors. The high market share held by these top providers also indicates that there may be barriers to entry for smaller or newer MSPs, as capturing market share in a highly concentrated market can be challenging.
Over 50% of businesses define their managed services as ‘a little’ or ‘somewhat’ advanced.
The statistic states that more than half of businesses categorize their managed services as either ‘a little’ or ‘somewhat’ advanced. This suggests that a significant portion of businesses do not perceive their managed services as highly sophisticated or cutting-edge but rather fall into a more moderate level of advancement. This can indicate that there may be room for improvement and further development in the managed services offered by these businesses. Understanding how businesses perceive the level of advancement in their managed services can inform strategies for enhancing and optimizing their operations to meet the evolving needs and expectations of their clients and stakeholders.
The managed security service segment is expected to garner a CAGR of 14.6% between 2020 – 2027.
This statistic indicates that the managed security service segment, within the broader field of cybersecurity, is projected to experience a Compound Annual Growth Rate (CAGR) of 14.6% between the years 2020 and 2027. The CAGR represents the average annual growth rate over a specified period of time, in this case, seven years. A CAGR of 14.6% suggests a strong and sustained growth trajectory for managed security services, likely driven by increasing cybersecurity threats, the growing importance of data protection, and the shift towards outsourcing security services to specialized providers. This forecast highlights the significant market opportunity and demand for managed security services in the coming years.
IT services outsourcing spending is expected to reach $397 billion by 2021.
The statistic indicates that the total expenditure on outsourcing IT services is projected to grow and reach $397 billion by the year 2021. This demonstrates the increasing trend among businesses and organizations to utilize external service providers to meet their IT needs. The rise in outsourcing spending suggests a reliance on third-party expertise, technological capabilities, and cost-efficiency benefits in managing and supporting IT functions. This statistic underscores the significant role that outsourcing plays in the IT industry and highlights the ongoing shift towards leveraging external resources for strategic and operational advantages in the digital age.
36% of companies suffer from a lack of resources and expertise to manage IT services.
The statistic ‘36% of companies suffer from a lack of resources and expertise to manage IT services’ indicates that a significant portion of businesses are facing challenges in effectively managing their IT services due to constraints such as limited financial resources and a shortage of skilled personnel. This could mean that these companies might struggle with issues such as outdated technology, inefficient IT operations, cybersecurity vulnerabilities, and an inability to adapt to changing technological trends. As a result, these companies may experience disruptions in their business operations, decreased productivity, and potentially compromised data security, highlighting the importance of addressing resource and expertise gaps in IT management to enhance overall operational efficiency and competitiveness.
66% of businesses use managed services to assist with their data center hosting.
The statistic ‘66% of businesses use managed services to assist with their data center hosting’ indicates that a significant portion of businesses rely on external services to manage and maintain their data center hosting infrastructure. This suggests that businesses are increasingly recognizing the benefits of outsourcing the management of their data center operations to specialized service providers in order to streamline processes, enhance security, improve efficiency, and reduce costs. By leveraging managed services for data center hosting, businesses can focus on their core activities while ensuring optimal performance and reliability of their IT infrastructure.
Nearly 64% of organizations use some form of managed IT services.
The statistic “Nearly 64% of organizations use some form of managed IT services” indicates that a significant majority of organizations rely on external providers to manage their information technology infrastructure and services. This suggests that businesses recognize the advantages of outsourcing IT functions, such as cost-effectiveness, access to specialized expertise, improved efficiency, and greater scalability. The high adoption rate of managed IT services highlights the increasing importance of technology in business operations and the need for organizations to leverage these services to stay competitive in a rapidly evolving digital landscape.
Europe’s managed services market is projected to grow at a CAGR of 11.4% between 2021 and 2026.
This statistic suggests that Europe’s managed services market is expected to experience robust growth over the period from 2021 to 2026, with a Compound Annual Growth Rate (CAGR) of 11.4%. This indicates that the market for managed services in Europe is forecasted to expand steadily at an average annual rate of 11.4% over the specified five-year period. This growth rate reflects an increasing demand for managed services across various industries in Europe, driven by factors such as the adoption of digital technologies, the need for cost-effective IT solutions, and the focus on enhancing operational efficiency. The projection highlights the potential opportunities for businesses operating in the managed services sector to capitalize on this growth trend and expand their market presence in Europe.
The cloud-based deployment mode for managed services grows at the highest CAGR and leads other modes of deployment.
The statement suggests that the growth rate (CAGR – Compound Annual Growth Rate) of cloud-based deployment mode for managed services is higher compared to other modes of deployment, such as on-premises or hybrid deployment. This indicates that more organizations are opting for cloud-based deployment to access managed services, likely due to the scalability, flexibility, and cost-efficiency offered by cloud computing. The trend showcases a shift towards the cloud as a preferred choice for deploying managed services, with organizations benefiting from the convenience and innovation that cloud-based solutions provide, thus leading the way in the deployment of managed services in the market.
The Asia-Pacific region is expected to see the fastest CAGR growth in the managed services market between 2021 and 2026.
The statement suggests that the Compound Annual Growth Rate (CAGR) for the managed services market in the Asia-Pacific region is projected to be higher than any other region from 2021 to 2026. This indicates that the demand for managed services, including IT, security, and cloud services, is expected to increase significantly in the Asia-Pacific region during this period. Factors contributing to this growth could include the digital transformation efforts of businesses, increasing adoption of advanced technologies, and the need for cost-effective and efficient solutions. As a result, businesses in this region are likely to invest more in managed services to enhance their operations, productivity, and competitive edge in the market.
Companies are expecting more than 25% of their IT budget to be allocated to managed services by 2023.
This statistic indicates that companies are increasingly shifting a significant portion of their IT budget towards managed services, with more than a quarter (25%) expected to be allocated to such services by the year 2023. Managed services typically involve outsourcing IT functions to third-party service providers who are responsible for maintaining, monitoring, and managing various aspects of a company’s IT infrastructure. This trend suggests that organizations are recognizing the benefits of leveraging external expertise and resources to optimize their IT operations, improve efficiency, and enhance their overall business performance. By allocating a substantial portion of their budget to managed services, companies are likely looking to streamline their IT processes, reduce costs, and focus on core business activities while relying on specialized providers for their IT needs.
The top 250 Managed Services Provider companies ranked by revenue, generate $89 Billion in 2020.
The statistic stating that the top 250 Managed Services Provider companies ranked by revenue generated $89 billion in 2020 highlights the significant financial impact of this sector within the technology industry. By identifying and ranking these companies based on their revenue, it provides valuable insights into the scale and growth of the Managed Services Provider market. The substantial revenue figure of $89 billion underscores the economic importance of these top companies in delivering managed services to businesses, showcasing their ability to meet the increasing demand for technology solutions and support services in the ever-evolving digital landscape.
The telecommunication and ITES segment dominated the managed services market by end-use and was worth USD 44.17 billion in 2019.
The statistic indicates that within the managed services market in 2019, the telecommunication and ITES (Information Technology Enabled Services) segment held the largest share in terms of end-use. This segment was valued at USD 44.17 billion, highlighting its significant contribution to the overall market value. The dominance of the telecommunication and ITES sector suggests that these industries have been major consumers of managed services, which may include services such as network management, IT infrastructure support, and security solutions. This information is important for stakeholders in the managed services market as it provides insight into the key players and areas driving growth within the industry.
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