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North America Managed Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

·6-min read

The North American managed services market (henceforth referred to as the market studied) was valued at USD 50. 72 billion in 2021, and it is expected to reach USD 95. 24 billion by 2027, registering a CAGR of 11.

New York, June 01, 2022 (GLOBE NEWSWIRE) -- announces the release of the report "North America Managed Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)" -
94% from 2022 through 2027 (henceforth, referred to as the forecast period).

Key Highlights
The North American market is growing due to the changing landscape of IT infrastructure, especially in small and medium enterprises (SMEs), who are continually focusing on outsourcing cybersecurity solutions. For instance, Kpaul Properties LLC, one of the emerging manufacturers and distributors of IT supplies in the United States, onboarded FUJITSU to replace a physical server with a virtualized environment. This has reduced the company’s cost by around 15% and delivered 95% uptime.
According to Solarwinds, in North America, Server and storage hardware, endpoint devices, and networking gear solution offerings dominate in MSP, especially in the US region. Though managed security offerings may be lacking, most solution providers are serving up security point products in the form of network and endpoint hardware and software.
In the region, companies are integrating IT solutions that are tailored to business needs by providing a full assessment of the IT environment and delivering the solutions needed to solve complex business challenges at every stage of the business lifecycle. For instance, Managed Solution, a US company, integrated technical skillsets and the right resources to discover challenges, diagnose problem areas, and custom design, deliver and execute on a comprehensive technology roadmap based on needs, which makes customers more secure, compliant, and efficient.
Although the managed services provide various benefits, the specific challenges, like the reliability concerns, may obstruct the growth of the market over the forecast period. The process of hiring an MSP to host critical business infrastructure involves the belief that the providers’ business may endure the relationship with them. In case of any failure by the providers to sustain the competition in the market, the enterprises relying upon them may have to entirely replace web hosting, emails, calendars, and other critical pieces of infrastructure, without which it is not possible to conduct business.
The COVID-19 pandemic outbreak in the US increased the number of organizations working remotely. According to ALM Media Properties LLC, an estimated 58% or more American knowledge workers are working remotely. This number is increasing by more than 30% from pre-COVID-19 averages and dwarfs previous figures that reported roughly 7% of the US’s 140 million civilian employees worked from home. For many organizations, this mass exodus from the conventional workplace has been a welcome shift in employer expectations and telework policies.

Key Market Trends

IT and Telecom Sector is Expected to Hold a Significant Market Share

The IT and telecom sector is a significant market for managed services due to the high rate of various technological adoptions, increased rate of adoption of the BYOD policy (in order to make business operations much more comfortable and controllable), and increased need for high-end security due to rapidly increasing data among organizations.
The telecom industry has observed increased growth during the past few years as telecommunication companies are encountering constant pressure to deliver innovative services at lower costs to retain their customers in the competitive market. In order to address a complex and competitive environment, managed services have become a widespread demand for operators.
Moreover, the majority of telecom carriers are expected to replace their network hardware with software (SDN & NFV) because of the compelling economic case offered by them. Major factors that drive the demand for SDN and NFV are improved time-to-market, reduction in CAPEX and OPEX, and opening up of new revenue streams from a business standpoint. All these are expected to drive the growth of the market studied. Such initiatives are driving demand for managed network services.
Many of the SD-WAN managed service providers in North America are differentiating themselves with a broad range of security offerings. For instance, Cato Networks offers a cloud-native platform that includes NGFW, Secure Web Gateway, Advanced Threat Prevention, Cloud and Mobile Access Protection, and a Managed Threat Detection and Response service. Colt offers Layer 7 firewall or a Layer 3/4 stateful firewall with DDoS protection, and CenturyLink offers a suite of security services that are referred to as Adaptive Network Security.

Canada is Expected to be the Fastest Growing Market

The market for managed services in Canada is growing mainly due to new product roll-outs, acquisitions, mergers, and partnerships, which are shaping the market landscape in overall North America. The accelerated growth of technology in Canada continues to reshape how businesses improve operational efficiencies, leverage massive amounts of data, collaborate internally, and interact between business and customers.
For instance, Starport is a Canada-based managed IT services provider that delivers the class IT design, implementation, and continuous network monitoring to mid-sized organizations, throughout Canada; most of its clients are concentrated in the Greater Toronto Area. It offers its services to clients from a variety of industries, including investment banking, manufacturing, and commercial real estate, among others.
Besides, Canada is witnessing high growth in the application of multi-cloud environments and increased adoption of automation. In the region, cloud, mobile, and social technologies demand that businesses take a proactive approach toward IT security, thus, boosting the demand for the deployment of robust managed services that would deliver in all security management layers.
Unified Communications as a Service (UCaaS) and related Contact Center as a Service (CCaaS) markets represent a business opportunity for managed service providers. This is because emerging players are offering innovative cloud-based solutions that require a minimum investment and are easy to deploy. Customers are also leaning toward consumption-based, pay-as-you-go models.
Rising cloud services in the country are expected to augment the demand for the managed MPLS market. For instance, the Government of Canada has a “cloud-first” strategy, whereby cloud services are identified and evaluated as the principal delivery option when initiating information technology investments, initiatives, strategies, and projects. The cloud is also expected to allow the Government of Canada to harness the innovation of private-sector providers to make its information technology more agile.

Competitive Landscape

The managed services market is consolidated, as major players dominate it. Some of the major players in the market are Cisco Systems Inc.?, IBM Corporation, Microsoft Corporation, Fujitsu Ltd, and Wipro Ltd.

May 2021: Fujitsu Ltd and Rakuten Mobile Inc. announced the signing of a Memorandum of Understanding (MoU), deepening collaboration on joint efforts to develop Open RAN solutions for the global market. Both companies will collaborate to develop 4G and 5G Open RAN solutions jointly.
November 2021: AT&T added a new offering to manage the Secure Access Service Edge (SASE) portfolio. AT&T SASE with Cisco is a converged network and security management system that uses software-defined wide-area networking (SD-WAN) technology and security capabilities to connect and protect businesses.
February 2022: Verizon Business announced the inclusion of VMware to Verizon’s Managed WAN Service’s global managed Software-Defined Wide Area Network (SD-WAN) service portfolio.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support
Read the full report:

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