Cloud Managed Services Market to hit USD 443.0 bn by 2033

Introduction

According to the Market.us, The Global Cloud Managed Services Market is projected to reach approximately USD 443.0 billion by 2033, up from USD 119.0 billion in 2023, with an expected compound annual growth rate (CAGR) of 14% during the forecast period from 2024 to 2033.

Cloud managed services involve the outsourcing of daily IT management for cloud-based services and technical support to automate and enhance business operations. Typically, this involves a third-party service provider managing the entirety or parts of a business’s cloud operations. The services can range from cloud security and storage solutions to monitoring and reporting, performance testing, and more. These services aim to free up internal IT staff to focus on more strategic tasks, ensuring that the cloud resources run efficiently and effectively.

The cloud managed services market encompasses the range of services provided by vendors that help organizations manage their cloud environments. The market is driven by the need for businesses to reduce complexities in cloud operations, enhance operational efficiencies, and minimize costs associated with in-house management of cloud infrastructures. Companies may opt for managed services for various cloud platforms, including public, private, and hybrid clouds. The market includes services such as infrastructure management, security and compliance, network operations, and application stacks management.

The demand for cloud managed services is primarily fueled by the increasing adoption of cloud technology across various sectors. As businesses move more of their operations to the cloud, the complexity of managing these services increases, driving the need for specialized expertise. This trend is particularly notable in industries that handle large amounts of data, require high levels of uptime, and have stringent compliance and security requirements. Additionally, the shift to remote work has amplified the need for robust cloud management to ensure accessibility, security, and scalability.

Several factors contribute to the growth of the cloud managed services market. Firstly, the ongoing digital transformation initiatives across businesses and the growing reliance on cloud technology for scalable and flexible IT solutions bolster the market. Secondly, the increasing complexity of cloud environments and the rising threat of cyberattacks make managed services essential for ensuring security and compliance. Moreover, the cost-efficiency of outsourcing cloud management, as opposed to maintaining an in-house team, also serves as a significant growth driver.

The cloud managed services market presents numerous opportunities for growth. There is a growing trend towards multi-cloud and hybrid cloud environments, which require more sophisticated management solutions. This complexity provides a ripe opportunity for managed service providers to offer integrated management across various cloud platforms. Furthermore, the ongoing innovation in cloud technology, such as the integration of AI and machine learning for more proactive management and security, also opens new avenues for service expansion. As organizations continue to adopt cloud solutions at an increasing rate, the need for expert cloud managed services is expected to grow, offering substantial market opportunities for providers.

Key Takeaways

• The Cloud Managed Services Market is expected to grow from USD 119.0 billion in 2023 to approximately USD 443.0 billion by 2033, with a Compound Annual Growth Rate (CAGR) of 14% over the forecast period from 2024 to 2033.
• In 2023, the Managed Mobility Services segment held a significant market share, accounting for over 35.8% of the Cloud Managed Services market.
• The Private Cloud deployment model dominated the market in 2023, capturing over 80.5% of the Cloud Managed Services market share.
• Large Enterprises were the most prominent market players in 2023, representing more than 77.3% of the Cloud Managed Services market share.
• The IT and Telecommunications sector led the industry segmentation, holding the largest market share at over 21.4% in 2023.
• North America was the leading region in the Cloud Managed Services sector, commanding more than 35.1% of the market share and generating approximately USD 41.9 billion in revenues in 2023.

Cloud Managed Services Statistics

• The Cloud Computing Market is projected to reach USD 2,974.6 billion by 2033, increasing from USD 629.5 billion in 2023, at a CAGR of 16.8% during the forecast period from 2024 to 2033.
• The Managed services market was valued at USD 278.9 billion in 2022 and is anticipated to grow to USD 834.7 billion by 2032, with a CAGR of 11.9% from 2023 to 2033.
• While cloud service providers (CSPs) like Amazon Web Services (AWS) claim 30% savings on infrastructure costs, these savings can only be fully realized if the cloud environment is optimized correctly.
• 80% of businesses are expected to completely abandon on-premises data centers by 2025.
• Cloud-based artificial intelligence services are anticipated to increase fivefold, reaching USD 15.7 billion by 2023.
• The Managed Security Services (MSS) Market is forecasted to be valued at USD 74.2 billion by 2032, up from USD 28.9 billion in 2023, growing at a CAGR of 11.4% during the forecast period from 2023 to 2032.
• 82% of companies fully achieving their cloud outcomes utilize managed services to a moderate or great extent.
• Approximately two-thirds of respondents are currently operating in a public cloud, with 48% planning to migrate at least half of their applications to the cloud within the next year.
• 80% of organizations are using multiple public or private clouds.
• The world generates 2.5 quintillion bytes of data every day.
• More than 90% of organizations are utilizing the cloud.
• Cloud-based workloads account for 75% of workloads in 1 out of 5 organizations.

Emerging Trends

• Cloud Complexity Management: As cloud services continue to expand, managing the complexity becomes a critical focus. Organizations are aiming to simplify their cloud environments through better management techniques and tools, leading to improved operational efficiency and reduced costs.
• Hybrid and Multi-Cloud Strategies: Businesses are increasingly adopting hybrid and multi-cloud environments to enhance flexibility and data sovereignty. These strategies allow organizations to distribute their workloads across multiple cloud platforms, optimizing performance and compliance based on the specific needs of each task.
• AI and Automation: Artificial intelligence (AI) and automation are becoming integral in managing cloud infrastructures. These technologies help in automating routine tasks, optimizing resource allocation, and improving security by predicting potential threats​.
• Edge Computing: This trend involves processing data closer to the source of data generation. Edge computing reduces latency, improves speed, and maintains data privacy by localizing data analysis and decision-making processes​.
• Sustainability in Cloud Operations: There is a growing emphasis on eco-friendly cloud services as organizations become more conscious of their environmental impact. Sustainable cloud practices include optimizing energy usage and selecting providers with green policies​.

Top Use Cases

• Disaster Recovery as a Service (DRaaS): Cloud managed services offer robust disaster recovery solutions that ensure business continuity by providing quick failover to cloud environments during IT outages​.
• Security and Compliance: Cloud providers are enhancing their services with advanced security measures such as multi-factor authentication and regular updates to protect against evolving cybersecurity threats​.
• Data Modernization: Migrating legacy systems to the cloud facilitates improved data analysis capabilities and operational efficiency. Cloud environments support big data technologies and real-time data processing​.
• Cost Management and Optimization: Managed cloud services help businesses control and predict their IT spending by offering scalable solutions that can be adjusted based on demand, thus avoiding over-provisioning and underutilization​.
• DevOps Automation: Integrating DevOps with cloud services allows for faster development cycles, higher operational efficiency, and continuous delivery, enhancing both product quality and customer satisfaction.

Major Challenges

• Cloud Security Concerns: As cyber threats become more sophisticated, ensuring robust security in cloud environments is a significant challenge. Organizations face difficulties in maintaining a secure cloud posture due to the complexities of hybrid and multi-cloud environments and the persistent shortage of cybersecurity professionals​.
• Cost Management and Optimization: Effectively managing and optimizing cloud costs remains a critical issue. Organizations struggle with unpredictable expenses due to complex pricing models, underutilized resources, and the need for continuous cost monitoring and optimization strategies​.
• Cloud Skills Gap: There is an ongoing challenge in acquiring the necessary cloud expertise. The rapid pace of cloud innovation demands specialized skills that are scarce, leading many companies to rely on managed service providers or invest heavily in training and upskilling initiatives​.
• Governance and Compliance: Managing governance and ensuring compliance with industry-specific regulations like HIPAA for healthcare or GDPR for data protection in Europe pose significant hurdles. Companies need to establish rigorous governance frameworks and compliance measures to mitigate risks associated with cloud deployments.
• Performance and Reliability: Maintaining high performance and reliability in cloud services is crucial, particularly as businesses rely more on cloud infrastructures for critical operations. Issues like latency, downtime, and the need for high availability across geographically dispersed data centers are major concerns​.

Top Opportunities

• Enhanced Cloud Security Solutions: As security remains a primary concern, there is a significant opportunity for developing advanced security solutions that simplify the management of cloud security postures, integrate seamlessly across multiple clouds, and offer automated threat detection and response capabilities​.
• FinOps and Cost Optimization Services: With cost management being a critical challenge, services that provide detailed cost analysis, budget forecasting, and resource optimization represent a growing market. These services help organizations reduce waste and improve their cloud ROI​.
• Specialized Cloud Training and Certification Programs: Given the cloud skills gap, there is a lucrative opportunity in offering targeted training programs that help professionals gain the required skills quickly and efficiently. These programs can be aligned with specific cloud platforms or focus on high-demand areas like cloud security and machine learning​.
• Automated Compliance Solutions: Automating compliance-related tasks through software that can continuously monitor and manage compliance standards could be a game changer. This helps businesses keep up with the evolving regulatory landscape and reduces the risk of non-compliance penalties​.
• Hybrid and Multi-Cloud Management Platforms: As enterprises increasingly adopt a multi-cloud strategy, there is a growing need for management platforms that can handle complex cloud environments. These platforms would offer integration, orchestration, and management capabilities across various cloud services, simplifying operations and improving efficiency​.

Recent Developments

• Deloitte has been actively enhancing its cloud capabilities. In 2023, Deloitte was recognized as a leader in Gartner’s Magic Quadrant for Public Cloud IT Transformation Services. Deloitte continues to focus on delivering comprehensive cloud services, emphasizing security, and infrastructure management, particularly in complex multi-cloud environments​.
• Infosys has been scaling up its cloud services through strategic partnerships and acquisitions. In 2023, Infosys expanded its Cobalt cloud services with new AI-powered solutions to enhance the management of multi-cloud environments. These developments are part of Infosys’s broader strategy to cater to the growing demand for cloud-native services.
• In March 2023, Cisco expanded its cloud security capabilities by acquiring Israel-based Lightspin Technologies, a leader in cloud security posture management (CSPM). The deal, valued between USD 200-250 million, aligns with Cisco’s strategy to enhance its cloud security offerings.
• In May 2023, IBM acquired Polar Security, integrating it into its Guardium unit to bolster cloud data protection. This acquisition is part of IBM’s broader strategy to enhance its cybersecurity and cloud security solutions​.

Conclusion

In conclusion, cloud managed services represent a rapidly evolving sector within the broader IT landscape, driven by the increasing complexity and adoption of cloud technologies across diverse industries. The demand for these services is fueled by businesses’ need to enhance operational efficiencies, manage compliance and security risks, and leverage advanced technological capabilities without significant capital expenditure.

The growth of the cloud managed services market is further supported by the trend towards hybrid and multi-cloud environments, requiring sophisticated management solutions. As businesses continue to integrate cloud-based solutions into their operations, the market for cloud managed services is poised to expand, offering substantial opportunities for providers to innovate and deliver comprehensive, scalable, and secure cloud management solutions. This evolution is crucial for businesses aiming to maintain competitive advantage and operational resilience in an increasingly digital world.

You May Also Like To Read

• “Managed Services Market: Optimizing IT Operations with Expert Solutions”
• “Managed Security Services Market: Enhancing Security Posture with Expert Protection”
• “Cloud Computing Market: Powering Digital Transformation with Scalable Solutions”

Discuss Your Needs With Our Analyst

Please share your requirements with more details so our analyst can check if they can solve your problem(s)

Request a Sample Download PDF