The market for Managed IT Services remains in healthy growth mode. Although the market is saturated with companies offering IT services, many new companies are still seeing growth and profitability in the industry.
Indeed, the global market for managed IT services will reach $256.5 billion in 2021, up from $166.7 billion in 2017, according to a BCC Research market forecast. That's a compound annual growth rate (CAGR) of 11.5 percent, the company says.
Within the United States, the market will grow $62.0 billion in 2017 to $94.5 billion in 2021 at a CAGR of 11.1 percent, the report found.
On a somewhat similar note, MSPs are expected to deliver 25 percent of the $4 trillion that SMBs and large enterprises will spend on IT products and services globally by 2021, a separate AMI-Partners report found.
BCC Research on Managed IT Services
BCC's Research's goal was to determine the global market size and future demand growth for managed IT services. The report covers the overall global managed IT services market and categorizes it by geographies and by service type.
The research was compiled using various resources including:
- 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.
Vertical Market Managed IT Services
The report shows that the industry providing the largest customer group for managed IT services in 2016 was companies in banking, financial services, and insurance (BFSI). These businesses accounted for 32% of the market.
Following the BFSI group, the second-ranked MSP vertical involved government, public service, and healthcare. No doubt, compliance and industry regulations are big drivers for MSP adoption in those verticals.
On a related note, ChannelE2E unveil the latest Top 100 Vertical Market MSP list and research report in February 2018.
Major Managed IT Services
According to BCC's report, infrastructure services constitute the largest segment of the managed IT services market at 47.1% of total sales -- followed by network services and security services. Businesses transitioning to the cloud are contributing to much of the growth within infrastructure services. As more companies rely on complicated cloud services to run their business, the demand to manage these services will continue to increase.
Security services will continue to be in high demand, as attackers constantly change their tactics, and develop new threats daily. We have seen major businesses face significant data breaches, like Target, Equifax, Uber, and more. These data breaches not only cost the affected company money, they cost the company in lost confidence with their customers, which is hard to quantify. Companies are eager to protect their business from these attacks and will continue to hire managed IT services providers to help them reduce their risk.
Recommendation
Finally, the report summarizes the findings in the data into a single recommendation, "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."
