Global Managed Services Market to Exceed USD 1,314.9 Billion by 2035, Driven by AI and Digital Transformation

Managed Services Market

Managed services market surges as firms adopt cloud, security, and automation to boost agility, reduce costs, & growing IT infrastructure demands.

NEWARK, DE, UNITED STATES, August 5, 2025 /EINPresswire.com/ — The managed services market is undergoing a historic expansion, with the global market size expected to rise from USD 441.1 billion in 2025 to USD 1,314.9 billion by 2035, growing at a CAGR of 11.5%. This surge is being driven by the growing need for agile, secure, and scalable IT operations as businesses across sectors embrace digitization and automation.

Amid increasing demand for always-on infrastructure, managed service providers (MSPs) are stepping in to offer end-to-end support—from cloud and network operations to advanced threat monitoring and compliance. Key players such as IBM, Accenture, DXC Technology, and Cisco are doubling down on automation-first strategies, intelligent infrastructure management, and global delivery capabilities.

Managed Security Services Lead the Charge

With 24.5% market share, managed security services top the solution segment in 2025. Rising ransomware incidents, zero-day exploits, and compliance mandates are accelerating adoption. Providers like IBM, AT&T Cybersecurity, and Palo Alto Networks offer fully integrated threat intelligence, MDR, and 24/7 SOCs. Enterprises are dedicating 15–18% of their IT budgets to managed security, citing faster threat detection and lower internal risk.

IT & Telecom: Top Sector for Outsourced IT

The IT and telecom sector dominates the market with a 26.9% share, driven by high data volume, uptime requirements, and reliance on cloud platforms. Vendors including NTT Ltd., HCLTech, and Cognizant provide managed infrastructure, OSS/BSS stacks, and remote network services, enabling telcos to reduce internal IT costs by up to 28% while maintaining service quality.

Large Enterprises Drive Scale and Adoption

Enterprises with global footprints account for 60%+ of market demand, leveraging MSPs for cloud migration, SLA compliance, and cost optimization. Leaders like Capgemini, TCS, and DXC support complex hybrid environments with multi-region endpoint management and 98%+ SLA compliance. Strategic outsourcing reduces internal IT costs by 20–30%, positioning managed services as a core enterprise strategy.

Hosted Services Take Center Stage

By 2025, 58% of managed service contracts are cloud-hosted. Hosted models offer 30% lower total cost of ownership and 35–40% faster deployment compared to on-premise. Use cases like managed backup, email security, and network monitoring dominate, driven by the need for flexibility, lower CAPEX, and integrated visibility.

BPO Still Reigns in Managed Information Services

Business Process Outsourcing (BPO) leads with 41% of the information services market. Enterprises are offloading functions like HR, finance, and customer service to optimize resources and drive scale. Providers like TCS, Infosys BPM, and Genpact handle hundreds of millions of interactions annually, enhanced by automation and multilingual service models.

India and China Outpace Global Growth Curve

Among top growth regions, India (9.6%) and China (9.2%) are leading the shift toward full-stack managed services adoption. In India, Tier-II cities and startups are embracing MSPs for fintech, retail, and civic tech applications. China’s growth is driven by state-led cloud migration, industrial automation, and localized MSP ecosystems in smart cities.

U.S. and U.K. Redefine MSP Use Cases

The United States (7.4%) is witnessing managed services expansion in DevSecOps, 5G network optimization, and HIPAA-compliant healthcare systems. Meanwhile, the United Kingdom (7.8%) is emphasizing sovereign cloud architecture, MDR, and regulatory compliance under GDPR and FCA standards, particularly in finance and legal sectors.

Cloud-Native, Outcome-Based Models Are the Future

Procurement strategies are shifting from fixed retainers to consumption-based billing, SLAs, and modular services. Nearly 41% of H1 2025 contracts in North America included variable pricing models. MSPs now manage CI/CD pipelines, edge analytics, and AIOps, redefining IT outsourcing with real-time visibility and developer integration.

Talent Shortages Put Pressure on Mid-Tier MSPs

Rising demand for certified engineers, especially in security and cloud orchestration, is increasing costs across Southeast Asia and Tier-2 markets. Margin compression and contract churn are prompting mid-tier vendors to automate L1 support and exit low-margin infrastructure deals in favor of Kubernetes, zero-trust frameworks, and AI observability.

Market Leaders and Strategic Moves

IBM, with an 8% market share, is cementing its position through strategic acquisitions. The recent USD 6.4 billion acquisition of HashiCorp integrates Terraform and Vault into IBM’s hybrid cloud stack. In April 2025, IBM acquired Hakkoda Inc., enhancing AI-driven IT operations. These moves reflect the growing need for end-to-end automation, cloud-native control, and proactive incident management.

Other players like Cisco, HPE, Fujitsu, AT&T, and Ericsson are anchoring their offerings around network efficiency, cloud migration, and sector-specific compliance. Emerging vendors like Avaya, BMC Software, and Alcatel-Lucent Enterprise are innovating in narrow verticals and regions, but face high barriers due to onboarding complexity and regulatory challenges.

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Final Takeaway

The managed services market is evolving rapidly—powered by AI, cloud, and the need for digital agility. As businesses prioritize uptime, threat defense, and cost control, MSPs are becoming indispensable partners. With hosted models, modular services, and automation at the core, this market offers robust opportunities for manufacturers and service providers alike to scale, specialize, and lead.

Explore more insights in our related industry reports.

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https://www.futuremarketinsights.com/reports/managed-print-services-market

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https://www.futuremarketinsights.com/reports/managed-network-services-market

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https://www.futuremarketinsights.com/reports/managed-mobility-services-market

Editor’s Note:
This release showcases the fast-paced transformation of the managed services market. Its emphasis on hosted solutions, security outsourcing, and flexible contract models highlights how manufacturers and enterprise IT providers can capitalize on evolving customer needs and long-term growth potential.

Rahul Singh
Future Market Insights Inc.
+1 347-918-3531
email us here

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