Cloud Managed Services Market Size, Share & Trends Analysis Report By Service Type (Business, Network), By Cloud Deployment (Public, Private), By End-user, By Verticals, By Region, And Segment Forecasts, 2023 - 2030

Cloud Managed Services Market Trends

The global cloud managed services market size was valued at USD 102.19 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 14.7% from 2023 to 2030. The growing emphasis on mobility and the requirement to focus on core business functions will drive market growth. Also, increasing demand for scalability and reliability will further elevate the demand for the services, enabling enterprises to scale up and down their operations by offering custom-made offerings to the available services. Enterprises are more concerned with IT cost reduction, which will fuel the demand in the future. Services offered on the pay-as-you-go model, where enterprises are charged for using resources, will enable enterprises to save on costs and provide flexibility.

Cloud-managed services have several other benefits, such as enhanced IT functionality and customized IT services. The availability of robust infrastructure will remain a key concern for service providers as uninterrupted internet connectivity is required for service delivery. Simultaneous access from multiple users to the cloud might result in network congestion which can hamper the internet speed and lead to downtime. Massive loads from multiple client access on the server might result in a power failure, temporarily disrupting business operations.

Poor infrastructure and connectivity in developing regional markets such as India, Mexico, and MEA will remain the biggest challenge for the market to grow. Also, data privacy and data security over the cloud will restrain the market growth. Additionally, cost-sensitive enterprises may refrain from investing in these services owing to the initial high installation and maintenance cost.

Vendor lock-in is another primary concern for the service providers. Signing new contracts might include substantial charges along with application reconfiguration. In such cases, platform compatibility can be another concern, as applications developed on one platform might only be supported on one platform.

The COVID-19 pandemic had a positive impact on the cloud managed services market. The outbreak and subsequent restrictions imposed globally have accelerated businesses' digital transformation initiatives across various industries. It increased reliance on cloud-based solutions and services, driving demand for cloud managed services due to the shift towards remote work and the need for secure and scalable cloud infrastructure to support remote operations. As organizations transitioned their workforce to remote environments, there was a surge in demand for cloud managed services that provide robust connectivity, data storage, and collaboration tools.

Service Type Insights

The mobility services segment accounted for the largest revenue share of 37.9% in 2022. Increased trends such as Bring Your Own Devices (BYOD) and mobile workforce will compel enterprises to implement services to manage devices and data. Increasing the adoption of portable and mobile devices in enterprises will further drive the growth of this segment.

The security services segment is expected to grow significantly during the forecast period. This growth can be attributed to the adoption of cloud technologies. The data in the cloud becomes more vulnerable as the number of users with access to the cloud increases. It will drive the demand for security services.

The network services segment is expected to grow at the fastest CAGR of 18.2% during the forecast period. The increasing adoption of cloud computing and the proliferation of cloud-based applications and services drive the demand for robust network services. Organizations rely on secure, high-performance networks to connect their on-premises infrastructure with cloud environments and facilitate seamless data transfer, application access, and user connectivity.

Deployment Insights

The private segment accounted for the largest revenue share of around 86.4% in 2022. The private cloud offers several benefits to enterprises, such as increased data security and access control. This model further provides enterprises with benefits such as cost efficiency and reliability. However, the costs associated with the private cloud model are high.

The public segment is estimated to register the fastest CAGR of 19.3% over the forecast period. Unlike the private cloud, the public cloud requires a low cost of deployment, is easy to configure, and offers economies of scale to enterprises.

End-user Insights

The large enterprise segment held the largest revenue share of 80.6% in 2022. Large enterprises, typically characterized by their extensive operations and complex IT infrastructure, have increasingly embraced cloud-managed services to drive operational efficiency, enhance scalability, and optimize their IT investments.

Cloud managed services help enterprises to reduce IT costs. These services are offered based on the pay-as-you-go model. These services also enable enterprises to achieve economies of scale by collaborating with employees on the go. It increases enterprise capabilities regarding flexibility, communication, and reliability.

Cloud managed services have increased the operational efficiency of small- and medium-sized organizations by managing their IT infrastructure. They enable organizations to focus on their core business practices, further enhancing productivity.

The SMEs segment is expected to grow at the fastest CAGR of 18.0% over the forecast period. Customizations provided to organizations by service providers enable them to experience flexibility. These factors are expected to drive SMEs' adoption of cloud managed services.

Verticals Insights

The telecom & ITes segment held the largest revenue share of 19.1% in 2022. The rapid digital transformation in the IT and telecommunication industry is fueling the industry’s growth. As organizations within this sector strive to modernize their infrastructure, optimize operations, and enhance service delivery, cloud solutions offer scalability, flexibility, and cost-efficiency.

The healthcare segment held a significant revenue share in 2022. The increased cloud adoption in the healthcare industry drives the demand for cloud managed services. A significant amount of data has been generated due to research-related activities and healthcare operations in the recent past. Managing this data requires expertise in the cloud; hence, healthcare providers seek cloud-managed service providers. Cloud managed services help healthcare service providers to focus on their core processes.

The government segment is expected to grow at the fastest CAGR of 15.9% over the forecast period. Governments at various levels are increasingly adopting cloud technologies to enhance operations, improve service delivery, and drive digital transformation initiatives. Cloud technologies allow governments to optimize their IT infrastructure, streamline processes, and reduce costs. By leveraging cloud-managed services, government agencies can focus on their core functions while outsourcing the management and maintenance of cloud infrastructure to expert service providers.

The retail & consumer segment is another major segment that will witness significant growth during the forecast period. Tailor-made offerings from service providers enable retailers to scale up and down business operations.

Regional Insights

North America dominated the market and accounted for the largest revenue share of 31.9% in 2022, owing to the presence of technology giants such as IBM, Google, Cisco Systems, and Verizon Communications. Initiatives by the federal government are increasing the adoption of cloud managed services. In Europe, several governments are working with various organizations and other countries to increase cloud adoption. Government initiatives such as the UK government's G-Cloud framework enable the government to utilize cloud managed services.

Asia Pacific is expected to grow at the fastest CAGR of 19.1% during the forecast period, owing to the growing adoption of cloud managed services by small and medium-sized enterprises, which are expected to drive market growth. Increasing investments by prominent players such as IBM and Google bolster the growth of cloud adoption and the cloud managed services market.

Key Companies & Market Share Insights

The market is highly competitive, and the players are undertaking strategies such as product launches, acquisitions, and collaborations to increase their global reach. For instance, in September 2022, OrionVM, an Infrastructure as a Service (IaaS) provider and cloud computing company, partnered with Blaize, an innovative artificial intelligence (AI) computing company. This collaboration aims to introduce a new service called AI as a Service (AIaaS). By integrating Blaize's advanced AI applications with OrionVM's reliable, secure, and high-performing infrastructure, customers now have the opportunity to leverage Blaize's AI solutions on the industry's most efficient and flexible cloud platform. This joint offering allows customers to address industry-specific challenges across various verticals by deploying a combination of these cutting-edge technologies. The following are some of the major participants in the cloud managed services market:

• IBM Corporation

• Cisco Systems, Inc.

• Telefonaktiebolaget LM Ericsson

• Verizon

• Accenture

• NTT DATA Corporation

• Huawei Technologies Co., Ltd.

• Fujitsu

• CHINA HUAXIN

• CenturyLink

• Trianz

Recent Developments

• In June 2023, Samsung Electronics and NAVER Cloud collaborated to launch a 5G network for Hoban Construction. This innovative network is the first in the Korean construction sector, empowering companies to integrate diverse 5G applications to enhance efficiency and safety at construction sites.

• In May 2023, Serviceaide, Inc., a US-based of IT and service management solutions provider, unveiled its AI-powered solutions and the AI-Everywhere Luma Virtual Agent. Luma 3.0, incorporating Generative AI, introduced a significant advancement in productivity, efficiency, cost reduction, and business process innovation. This enhancement aims to improve all service management functions. With Luma 3.0, users and staff enjoy highly interactive experiences that effectively address their needs, providing relevant information without manual searching.

• In April 2023, Sinch, a computer software company, joined forces with Synoptek, an IT service provider and Microsoft Gold partner. This strategic partnership enables Sinch to provide professional and managed Microsoft Teams Phone System services seamlessly integrated with Operator Connect or Direct Routing. The collaboration enhances the capabilities and offerings of both companies, ensuring efficient and effective solutions for their customers.

• In April 2023, VMware, Inc., a cloud computing company, launched VMware Cross-Cloud managed services. These comprehensive offerings benefit partners and customers, empowering skilled partners to expand their managed services practices. The launch of VMware Cross-Cloud managed services facilitates growth, profitability, and recurring revenue for providers, while also addressing the challenge of talent and skills gaps in multi-cloud environments. It aims to deliver faster time to value and bridge the IT expertise divide for customers.

• In June 2022, Hewlett Packard Enterprise launched platform improvements and innovative cloud services for HPE GreenLake. This solution aims to support organizations in modernizing their applications and data by providing a private cloud experience that is automated, flexible, scalable, and suitable for enterprise use.

Cloud Managed Services Market Report Scope

Global Cloud Managed Services Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global cloud managed services market based on service type, cloud deployment, end-user, verticals, and region:

• Service Type Outlook (Revenue, USD Million, 2017 - 2030)

  • Business

  • Network

  • Security

  • Data Center

  • Mobility

• Cloud Deployment Outlook (Revenue, USD Million, 2017 - 2030)

  • Public

  • Private

• End-user Outlook (Revenue, USD Million, 2017 - 2030)

  • SMEs

  • Large Enterprises

• Verticals Outlook (Revenue, USD Million, 2017 - 2030)

  • Telecom & ITES

  • Government

  • BFSI

  • Retail & Consumer

  • Healthcare

  • Manufacturing & Automotive

  • Others  

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

  • Latin America

    • Brazil

    • Mexico

  • Middle East and Africa

    • Saudi Arabia

    • South Africa

    • UAE