IT managed services revenues are growing at three times the rate of overall IT spending according to a new Canalys report commissioned by Cisco (Channel partner opportunities and trends by region – an independent study by Canalys, Cisco, September 2023).
Global revenue for managed services is forecast to rise 12.7% in 2023, from $419 billion to $472 billion. Total IT spending is predicted to grow by 3.5%.
More than one third (35%) of channel partners surveyed in June said they were expecting growth of at least 20% in their managed services business this year – up from 27% of channel partners in last year’s survey.
Growth is being driven by rising demand for:
+ cybersecurity services and expertise, as organisations contend with greater threat levels and a global shortage of cybersecurity and IT talent. More than half (56%) of surveyed MSPs expect revenues from cybersecurity managed services to grow this year;
+ cloud infrastructure management and expertise, as organisations are challenged by complex cloud infrastructure spanning private and public clouds, along with distributed applications and services. Again, more than half (55%) of MSPs expect revenues from cloud infrastructure management to grow this year; and nrising demand for flexible consumption models, as organisations integrate more technology into their operations.
The study suggests managed services revenue will receive a further boost next year from emerging technologies like AI and the growing emphasis on sustainability. Nearly six in 10 partners (59%) believe AI presents a business opportunity (39% stating it will be significant); and 57% believe customers are willing to pay a premium for sustainability products and solutions.
In 2022, the UK’s 12,615 managed service providers increased managed services revenue by 11.4% year-on-year to $23.8 billion, contributing to year-on-year growth of 4.5%.
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