New York, Aug. 02, 2023 (GLOBE NEWSWIRE) -- The global managed network services market size is predicted to expand at ~10.50% CAGR between 2023 and 2035. The market is projected to garner a revenue of USD 207.55 billion by the end of 2035, up from a revenue of ~USD 62.63 billion in the year 2022.Market growth is largely driven by growing demand from small and medium-sized businesses for managed network services due to the need for cost optimization, improved network performance, and high-speed Internet connectivity.
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Additionally, the average small business spends 6.7% of its revenue on IT services. More and more companies are using managed SD-WAN services. These services give businesses the ability to scale their networks quickly and efficiently, while also offers improved reliability and performance. It also gives organizations better control over their network and applications, as their service provider manages the network and ensures Service Level Agreements (SLAs) are met. As more businesses rely on managed network services, increasingly sensitive customer and employee data is stored on these networks. This data is vulnerable to cyberattacks and data breaches, which can lead to reputational and financial losses for the companies involved. As a result, companies are increasingly concerned about the security and privacy of their data, which has led to a drop in demand for managed network services.
Managed Network Services Market: Key Takeaways
- Market in Asia Pacific to propel highest growth
- The managed IP/VPN segment to garner the highest growth
- Market in North America to grow at a highest rate
Increasing Adoption of Digitalization across the Globe to Boost Market Growth
Business engagement in digital initiatives is 90%, and 88% of senior business leaders say digitization is a priority for their organization. Global digital transformation spending is expected to reach $6.7 trillion by 2023. Digitization helps companies become more efficient and profitable. It also helps streamline processes, reduce manual errors, and increase productivity. As a result, organizations are increasingly turning to managed network services to better manage their networks and keep them running smoothly. Campus networks provide an interconnect between a LAN and a MAN, allowing for greater scalability and flexibility. This enables more efficient service delivery and better performance due to higher bandwidth and higher transmission speeds.
Additionally, the use of campus networks helps reduce operational costs, making them an attractive option for organizations looking to maximize their IT budgets. It is estimated that global consumer IP traffic will reach 330 exabytes per month by 2022, at a compound annual growth rate of 26%. Among all data centers, 96% of traffic was generated by cloud data centers in 2021. As companies and organizations move more and more operations to the cloud, there is a greater need for reliable and secure networks to transport data.
Managed Network Services Market: Regional Overview
The market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa region.
Expanding Digital transformation initiatives to Drive the Market Growth in Asia Pacific Region
The managed network services market in Asia Pacific region is estimated to garner the largest revenue by the end of 2035. Organizations in Asia Pacific are undergoing digital transformation to leverage emerging technologies such as the Internet of Things (IoT), big data analytics, artificial intelligence (AI), and machine learning (ML). These transformative initiatives require reliable and efficient network infrastructure to support the seamless integration of various technologies. Managed network services provide the expertise and support necessary to implement and maintain the network infrastructure for digital transformation projects.
With the expansion of 5G network services and the emergence of data centers, the region is seeing an increase in demand for MNS services. More than 960,000 5G base stations have been built in China, including 190,000 in the first half of 2021. SMEs are a significant contributor to the economic growth in the Asia Pacific region. These organizations often lack the resources and expertise to manage complex network infrastructure in-house. Managed network services market offer cost-effective solutions, enabling SMEs to leverage advanced network capabilities without heavy investments. The increasing number of SMEs and their growing reliance on digital technologies drive the demand for MNS in the region.
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Growing complexity of network infrastructure to Propel the Growth in the North America Region
The North America managed network services market region is estimated to garner the highest CAGR by the end of 2035. Organizations in North America are grappling with the increasing complexity of their network infrastructure due to the adoption of emerging technologies, such as cloud computing, IoT, big data, and AI. Managed network service providers offer expertise in managing and optimizing complex network environments, ensuring reliable connectivity, security, and performance.
The growing complexity of network infrastructure drives the demand for MNS in North America. With the rise in cyber threats and high-profile data breaches, organizations in North America are prioritizing cybersecurity. Managed network service providers offer robust security solutions, including firewall management, intrusion detection and prevention systems, vulnerability assessments, and incident response services. The increasing need for comprehensive network security measures drives the adoption of MNS in the region. Healthcare organizations in the region have implemented telehealth solutions to respond to the increased demand for healthcare services during the COVID-19 pandemic and improve service quality and patient outcomes. More than 77% of hospitals in the United States offer telemedicine services to their patients.
Managed Network Services, Segmentation by Component
- Managed LAN/WPN Networks
- Managed IP Telephony
- Managed IP/VPN
- Managed Wi-Fi
Amongst these segments, the managed IP/VPN segment in managed network services market is anticipated to hold the largest share over the forecast period. Network security is a top priority for organizations as they face increasing cyber threats and data breaches. Managed IP/VPN services offer robust encryption and secure tunneling protocols to protect data transmitted over networks. This helps organizations maintain the confidentiality and integrity of their data, making managed IP/VPN services a critical component of their overall security strategy.
The adoption of cloud computing and hybrid IT environments has led to the need for secure and reliable connectivity between on-premises infrastructure and cloud services. Managed IP/VPN services provide a secure and private network connection, enabling organizations to seamlessly integrate their on-premises and cloud environments. This integration drives the demand for managed IP/VPN services. Managed IP/VPN services offer scalability and flexibility, allowing organizations to easily expand their network capacity and adapt to changing business needs. As businesses grow and require additional network resources, managed IP/VPN services can accommodate increased traffic and provide the necessary bandwidth. The scalability and flexibility offered by managed IP/VPN services make them attractive to organizations of various sizes and industries.
Managed Network Services, Segmentation by Deployment Type
- On-Premise
- Cloud
Amongst these segments, the cloud segment in managed network services market is anticipated to hold a significant share over the forecast period. Organizations across industries are undergoing digital transformation to modernize their operations and leverage emerging technologies. Cloud computing plays a crucial role in enabling digital transformation by providing scalable infrastructure, on-demand resources, and flexible services. According to a report, worldwide spending on digital transformation technologies and services is forecasted to reach USD 2.3 trillion in 2023, indicating the importance of cloud computing in driving digital transformation.
Cloud computing offers cost savings and operational efficiency compared to traditional IT infrastructure. Organizations can avoid upfront investments in hardware and infrastructure, reduce maintenance and management costs, and pay for resources on a consumption basis. Cloud computing provides the ability to scale resources up or down based on demand, offering unprecedented scalability and flexibility. Organizations can quickly provision and deprovision resources, enabling them to adapt to changing business needs and handle peak workloads effectively. The ability to scale resources dynamically is a significant driver of cloud adoption.
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Managed Network Services, Segmentation by Enterprise Size
- Large Enterprises
- Small & Medium Enterprises
Managed Network Services, Segmentation by End User
- BFSI
- Communication
- Media & Services
- Healthcare Providers
- Manufacturers
- Retail & E-commerce
- Transportation
- Education
- Government
Few of the well-known market leaders in the managed network services market that are profiled by Research Nester are Midco, IBM Corporation, Fujitsu Ltd., Cisco Systems, Inc., Dell EMC, Alcatel-Lucent, Microsoft Corporation, Wipro Limited, and other key market players.
Recent Development in the Managed Network Services Market
- Amazon Web Services, Inc. (USA) announced its new managed wide area network (WAN) service, AWS Cloud WAN, which will simplify networks by connecting data centers, colocation facilities, branch offices and resources across the cloud.
- Midco Wi-Fi powered by Plume HomePass enables customers to have a better Internet experience at home.This next-generation WiFi service gives you access to even faster, smarter and more reliable WiFi throughout your home, powered by artificial intelligence, cloud and open source technologies.
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