Managed Network Services Market Scope: Mapping the Growth Trends

The growing demand for digital transformation in various enterprises is likely to boost the managed network services market growth. Businesses are rapidly embracing significant network technologies to support business initiatives and gain a competitive advantage. Managed network services are a major contributor to a robust IT infrastructure. The growing emphasis of organizations on creating a digital workplace with minimum network downtimes has become a major driving factor for product demand. Furthermore, the growing advancements in artificial intelligence technology and high penetration of mobility will further accelerate the growth of the managed network services market. The managed network services offer significant scope for SMEs to grow and realize business goals. IT spending among SMEs is predicted to increase significantly, as SMEs are under constant pressure to expand by implementing innovative and enhanced IT services. The US government had proposed an IT budget of US$ 109.4 billion for 2022. Thus, increasing demand for managed network services among SMEs and a rise in IT spending are the key factors propelling the market growth.

KYNDRYL HOLDINGS INC., CISCO SYSTEMS, INC., VERIZON COMMUNICATIONS, INC., COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION, AND HCL TECHNOLOGIES LTD– PROMINENT MARKET PARTICIPANTS IN THE MANAGED NETWORK SERVICE MARKET.

The managed network services market is segmented into type, deployment, organization size, and end-use vertical. Based on type, the market is segmented into managed LAN, managed network security, managed monitoring, managed VPN, managed WAN, and managed Wi-Fi. Based on deployment, the market is bifurcated into cloud and on-premise. Based on organization size, the market is divided into large enterprise and SMEs. Based on end-use vertical, the market is categorized into BFSI, government, IT & telecommunication, manufacturing, media & entertainment, retail & e-commerce, and others.

Digital transformation uses technologies to create new or modify existing business processes and customer experiences to meet the ever-changing business environment. Digital transformation has common goals, such as improving efficiency, adding value, and promoting innovation. As companies are increasingly adopting digital transformation to deliver better customer experiences and compete more effectively, there is a growing need for services that support such modernization of information technology (IT) within different enterprises. Additionally, while companies seek to adopt digital transformation, the availability of skilled personnel and the cost of retaining them become hindrances for most enterprises. Managed network service providers, often termed managed service providers (MSPs), strongly aid in overcoming such hindrances. Enterprises can easily avail of their digital transformation service without the requirement of managing or maintaining an IT department within their enterprise.

The rising digital transformation is also boosting certain other factors, such as migration to the cloud and rapid growth in data generation. For instance, in March 2021, Deloitte and Google Cloud launched a security analytics platform that uses Deloitte’s cyber risk quantification and risk management frameworks with Google products Looker, Chronicle, and BigQuery. Companies continually migrated their workloads to the cloud for better flexibility and portability. Hence, the public cloud is becoming an increasingly important asset for a company’s IT strategy. As such migrations are relatively complex, both large and small and medium enterprises (SMEs) seek MSPs for managed network services. By 2026, more than 85% of large enterprises are expected to seek assistance from managed network service providers for migrating applications to the cloud. Growth in data generation has paved the way for problems in managing such data. In 2021, enterprises contributed to creating, capturing, and replicating about 46 zettabytes of data. Most enterprises cannot derive valuable business insights from such huge amounts of generated data. Artificial intelligence (AI) and machine learning (ML) can be utilized for harnessing meaningful insights from such data; however, to do so, companies first need to address certain critical aspects, including multi-cloud data management, data privacy, and data governance. For all such requirements, MSPs can strongly aid businesses by offering cost-effective solutions without requiring huge investments.

The US, India, Brazil, France, Russia, Turkey, the UK, Argentina, and Colombia were among the worst-affected countries by the COVID-19 pandemic. The COVID-19 outbreak disrupted various industry verticals such as automotive, manufacturing, energy & power, aerospace & defense, and construction in 2020. Implementing containment measures such as trade bans, travel restrictions, and workforce limitations at workplaces negatively impacted various businesses’ manufacturing, supply, and sales. Such disruptions promoted work-from-anywhere trends and digital transformation adoption across the world, positively impacting the managed network services market growth. Almost 95% of enterprises increased real-time application traffic on their WANs during the pandemic, as many workers shifted to video, voice, and online meetings to compensate for the lack of traditional face time. Also, 60% of the enterprises accelerated their SD-WAN plans during the pandemic, with 59% expanding the scope of their SD-WAN plans by adding more sites. Not all network traffic is created equally; with the help of a centralized controller and the ability to securely and intelligently direct traffic across the WAN, SD-WAN has remained highly popular among enterprises. The adoption of managed network services has started to increase since then. With growing vaccination drives, businesses have started to return to their pre-pandemic state. Also, they are mostly enjoying the steps taken during the pandemic, with regards to IT infrastructure. Estimated impact of the COVID-19 outbreak on the growth of the global managed network services market in various countries/regions is described in the following figure.

The top five companies in the market are Kyndryl Holdings Inc., Cisco Systems, Inc., Verizon Communications, Inc., Cognizant Technology Solutions Corporation, and HCL Technologies Ltd. The above listing of key players is derived by considering multiple factors such as overall revenue, current well-completion equipment and services portfolio, new product launches, market initiatives, investment in technology up-gradation, mergers & acquisitions, and other joint activities. A few of the important market initiatives and product developments from the industry are mentioned below: