The global managed services market size is projected to grow at a 14.1 percent compound annual growth rate over the next five years, reaching $731.1 billion by 2030, according to a market forecast from Grand View Research, Inc.
According to the report, the largest segment of the managed services market is business process outsourcing (BPO), which accounted for 40 percent of managed services revenue in 2024. Enterprise IT customers also drove the most consumption of managed services, accounting for 60 percent of all revenue in 2024, according to the report.
The report also notes that the on-premises segment accounted for half of the revenues (51 percent) in 2024, with managed data center services contributing 16 percent of total revenues.
Overall, organizations in North America accounted for a third (33 percent) of all managed services revenue in 2024.
Adapting to the new managed services landscape
In general, the managed services market has undergone significant changes in the last several years. More vendors than ever are offering managed services that they sell either directly or via partners. Most managed service providers (MSPs) now offer a combination of services they have developed in-house alongside services provided by vendors that they resell.
The margins generated by reselling a managed service are generally smaller than those of self-developed offerings. However, this approach eliminates the need for an MSP to invest in building that capability from scratch. As a result, many MSPs choose to focus their investments on a core set of services while augmenting them with offerings from vendors, such as cybersecurity providers, who have more profound expertise in their specific platforms.
Regardless of approach, MSPs in the age of artificial intelligence (AI) may need to rebalance how they provide their services. IT vendors typically have more access to the data and expertise needed to train predictive, causal, and generative AI models, along with their associated AI agents. For that reason, it may be more practical for MSPs to rely on managed services provided by IT vendors. This approach offers easier access to advanced AI models without the need to develop them in-house.
AI is raising the stakes
However, each organization will need to customize those AI models using telemetry data that MSPs typically collect. That data will play a critical role in helping to fine-tune AI models in a way that generates more relevant suggestions and actionable insights.
Additionally, each IT vendor will inevitably release AI agents specifically trained to autonomously automate a narrow range of tasks. However, orchestrating those AI agents to automate an end-to-end process will still require significant IT expertise. This is the type of deep technical knowledge that MSPs typically bring to the table.
Exactly how IT services will be delivered in the years ahead remains to be seen. One thing is certain, though: it will soon be feasible to manage IT environments at unprecedented levels of scale. That’s critical because the same AI technologies are enabling the rapid development and deployment of more applications than ever before.
The good news is that there will be more applications than ever for MSPs to manage. However, to stay competitive and succeed, they must first master the AI technologies that are quickly becoming the next set of table stakes in the industry.
Photo: David P Baileys / Shutterstock
This post originally appeared on Smarter MSP.