A report by Mordor Intelligence approximates the value of the managed services market at £127 billion in 2018. This number is expected to balloon to £243 by 2024. This means a compound annual growth rate (CAGR) of 11.5% for a five-year period. These figures are in line with the optimistic outlook of the managed IT service experts at Omicron Solutions Ltd. This sector is experiencing a steady rise that is projected to continue over the new decade.
More demand from technology-oriented businesses
Industry observers attribute the relatively high growth rate of the managed services sector to the increasing shortage of technical expertise among enterprises that are becoming tech-oriented. At present, almost all companies make use of computers and the internet. This reliance on new technology has numerous advantages, especially with regard to efficiency. However, it also comes with the need to become tech-savvy to address new kinds of problems that target computers and online infrastructure.
Many businesses remain unprepared to handle cyberattacks, let alone have the capability to fix malware infections or the aftermath of a cybercrime. That’s why many are turning to managed services for the sake of convenience and reliability. It does not require them to spend on new equipment and the hiring and training of additional employees.
According to the Mordor report, much of the growth in the managed services market is in the Asia-Pacific region. This is primarily because of the increasing number of businesses that are in the process of moving from the traditional business models to cloud-based infrastructure. They are modernising their organisations and are undergoing digital transformation. Likewise, government offices in the region are computerising their operations to become more efficient.
Other relevant statistics
A separate study by Spiceworks estimates that small and mid-size businesses increased their capital expenditure by 25%. However, overall IT spending among SMBs experienced slower growth. Still, the study found that more businesses are willing to allocate funds for cloud services.
A report published by the Technology Services Industry Association (TSIA), on the other hand, showed that around 81% of managed service providers (MSPs) employed commercial off-the-shelf tools to provide customised solutions to their clients. The report also says that the managed service industry is gradually moving towards the standardisation of their services, with around 68% of MSPs offering standard solutions.
Moreover, high adoption rates have been observed in the case of managed security services (MSSs) along with advanced threat detection functions. More businesses are now relying on third-party solutions for their enterprise security. Rapid digitalization and the adoption of new technologies infer the need for companies to ceaselessly innovate and upgrade their infrastructure. They can’t become competitive if they refuse to use new technologies.
The growth of the managed services market is relatively healthy. It is not that different from the projected growth of the overall IT services sector, which is around 9%. Business owners and managers appear to acknowledge the advantages of managed solutions. It’s a good time to consider investing in MSPs or starting a business that specialises in managed services.