Cloud Managed Services Market Size - By Services (Managed Infrastructure Services, Managed Security Services, Managed Network Services, Managed Data Center Services, Managed Mobility Services), By Cloud, By Organization Size, By End-User & Forecast, 2024 - 2032

Cloud Managed Services Market

Cloud Managed Services Market size was valued at USD 107.1 billion in 2023 and is projected to register a CAGR of 14% from 2024 to 2032. The integration of AI, machine learning, and automation within cloud services is a significant growth driver for the market.
 

AI and machine learning facilitate advanced analytics, natural language processing, and image and video analysis. These technologies offer deeper insights and enhance decision-making processes. These services allow businesses to build, train, and deploy machine learning models at a larger scale, eliminating the need for extensive in-house expertise or infrastructure. In addition, automation tools streamline operations by handling repetitive and manual tasks, while serverless computing platforms manage server resources automatically, thus optimizing utilization and reducing manual intervention.

Moreover, the adoption of cloud managed services leads to substantial reductions in operational costs for organizations. Migrating to the cloud reduces the need for expensive physical infrastructure and data center maintenance. Further, these services offer scalable and flexible solutions, allowing businesses to access benefits for the pay-per-use model and avoid the costs of over-provisioning. Additionally, major cloud services offering companies are collaborating to scale up their offering to support advanced IT solutions.

For instance, in August 2023, Kyndryl announced an expanded partnership with VMware as a VMware Cross-Cloud Managed Services Provider. This collaboration supports developing VMware Managed Services Specialization and offering Validated Service Offerings (VSO) for VMware Cloud on AWS. These services are aimed at scaling up customers' IT modernization. By providing consistent VMware Cloud environments across on-premises data centers and AWS, Kyndryl aims to reduce the total cost of ownership, simplify operations, and accelerate cloud migrations.
 

The market holds significant promise for the future. However, navigating the complex regulatory landscape and ensuring robust security measures to protect sensitive data in the cloud are some of the major challenges for the market players. Moreover, organizations must comply with a myriad of regulations that vary across regions and industries, which can complicate cloud adoption and management.  Further, safeguarding sensitive data in the cloud requires advanced security protocols and continuous monitoring to prevent breaches and unauthorized access. All these factors restrict the adoption of cloud managed services and hamper market growth.
 

Cloud Managed Services Market Trends

A growing trend in cloud managed services is the adoption of consumption-based pricing, where businesses pay only for the resources they use. This shift offers greater cost transparency, allowing businesses to predict cloud expenses based on actual usage and eliminate the uncertainty of fixed-fee plans. In addition, it incentivizes resource optimization, leading to potential cost savings and reduced waste.
 

Moreover, this model provides flexibility and scalability, thus enabling businesses to adjust cloud resources to meet fluctuating workloads without the limitations of fixed-cost plans. Moreover, for service providers, consumption-based pricing ensures recurring revenue streams and fosters trust by reflecting actual usage and delivered value.
 

Additionally, key market players are launching new cloud-based services through strategic partnerships with other companies. These collaborations enable the integration of advanced technologies, providing comprehensive solutions that enhance performance, scalability, and flexibility for customers.
 

For instance, In January 2024, Cisco Systems and Hitachi Vantara launched Hitachi EverFlex with Cisco Powered Hybrid Cloud, a collaborative effort focused on cloud-managed services. This offering integrates Hitachi Vantara's XaaS portfolio, encompassing storage, data protection, and managed infrastructure services, with Cisco's networking and computing capabilities. It aims to deliver consistent operational experiences across on-premises and cloud environments, emphasizing a consumption-based pricing model for infrastructure capabilities.
 

Cloud Managed Services Market Analysis

Based on cloud type, the market is divided into public, private, and hybrid. In 2023, the public cloud segment accounted for a market share of around 52%. This cloud type holds the maximum share of the market, owing to its cost-effectiveness, scalability, and flexibility. In addition, organizations prefer public cloud services as they eliminate the need for significant upfront capital investment in IT infrastructure, thus offering a pay-as-you-go model that aligns with operational expenses. It further offers robust scalability, allowing businesses to easily adjust resources based on demand, which is considered particularly beneficial for handling varying workloads.
 

Additionally, public cloud services provide a wide array of advanced features, security measures, and compliance certifications, making them an attractive option for organizations to modernize their IT infrastructure and rapidly deploy applications globally.
 

Based on organization size, the cloud managed services market is divided into large enterprises and SME. In 2023, the large enterprises segment accounted for a market share of around 60%. Large enterprises are leading the share in the market, owing to their extensive IT infrastructure needs, substantial financial resources, and the complexity of their operations. These organizations require scalable and robust cloud solutions to manage vast amounts of data, ensure business continuity, and support global operations.
 

Additionally, large enterprises can invest in advanced cloud technologies and managed services to enhance efficiency, reduce operational costs, and maintain competitive advantage. These enterprises have the resources to invest in advanced cloud technologies and managed services, allowing them to enhance efficiency, reduce operational costs, and maintain a competitive edge in the market.

North America leads with a substantial cloud managed services market share of 43% in 2023. North America leads in the market primarily, owing to the presence of a large number of established cloud service providers offering advanced technologies and solutions. Moreover, enterprises in the region are early adopters of cloud technologies, driven by the need for scalability, agility, and cost-efficiency in their IT operations. The presence of a robust digital infrastructure, including high-speed internet connectivity and data centers, further facilitates the widespread adoption of cloud managed services across its geographies.
 

Europe is rapidly growing in the cloud managed services market, driven by increasing digital transformation initiatives across industries and stringent data protection regulations such as GDPR. Enterprises in Europe are adopting cloud services to enhance operational efficiency, reduce IT costs, and improve scalability. The presence of a mature IT infrastructure and a strong focus on data privacy and security further bolster the adoption of cloud managed services in the region.
 

Asia is experiencing robust growth in the cloud managed services market, fueled by rapid economic development, increasing internet penetration, and rising adoption of digital technologies. Enterprises in Asia are leveraging cloud services to support their expansion initiatives, improve customer experience, and gain competitive advantage, which is expected to be opportunistic for the market.
 

Cloud Managed Services Market Share

IBM Corporation, Cisco Systems, Inc. and Accenture are leading companies in the market, collectively commanding a share of 26%. These companies focus on offering a wide range of managed services, including infrastructure management, security, compliance, and application management, to cater to diverse client needs. They invest heavily in R&D to innovate and enhance their service offerings, ensuring to are at the forefront of technology advancements such as AI, machine learning, and automation. Further, partnerships and acquisitions are key components of their strategy, allowing them to expand their capabilities and market reach. Furthermore, these leaders emphasize providing customized solutions and high-quality customer support to ensure client satisfaction and retention in a competitive market.
 

Cloud Managed Services Market Companies

Major players operating in the market are:

• Accenture PLC
• AT&T Inc.
• Cisco Systems, Inc.
• Fujitsu Limited
• IBM Corporation
• NTT Data Corporation
• Rackspace Technology, Inc.
• Tata Consultancy Services Limited (TCS)
• Verizon Communications Inc.
• Wipro Limited
   

Cloud Managed Services Industry News

• In March 2024, Sonata Software and Zones announced a strategic Go-to-Market partnership aimed at simplifying enterprise application delivery through comprehensive cloud managed services. This five-year agreement focuses on enhancing cost efficiency and data optimization for customers, leveraging Sonata Software's expertise in application services and Zones' capabilities in digital transformation. Further, the partnership aims to support clients across various industries in modernizing their technology footprint and achieving the benefits of cloud adoption.
   
• In March 2024, Cognizant extended its collaboration with Pon IT, a part of the Dutch multinational Pon Holdings, to continue providing cloud managed services. This strategy aims to enhance agility, intuition, and innovation across Pon IT's diverse operating companies. Moreover, Cognizant has transformed Pon IT's infrastructure with automation-driven optimizations, fostering a stable and efficient cloud platform.
   

The cloud managed services market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) from 2021 to 2032, for the following segments:

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Market, By Services              

• Managed Infrastructure Services
• Managed Security Services
• Managed Network Services
• Managed Data Center Services
• Managed Mobility Services   
• Others

Market, By Cloud

• Public cloud
• Private cloud
• Hybrid cloud

Market, By Organization Size

• SME
• Large Enterprises

Market, By End-user

• BFSI
• Healthcare
• Retail
• IT & Telecom
• Government & Public Sector
• Manufacturing
• Media & Entertainment
• Energy & Utilities
• Transportation & Logistics
• Education
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Southeast Asia
  • Rest of Asia Pacific 
• South America
  • Brazil
  • Argentina
  • Rest of South America
• MEA
  • UAE
  • South Africa
  • Saudi Arabia
  • Rest of MEA