One of the most frequently asked (and arguably least important) questions is "how big is the managed services market?" They ask this question because they are interested in managed services and want to develop a MSP program. The reason they have to have an answer is even more interesting, in my opinion. Vendors need data in order to justify to their superiors that chasing MSPs is really worth the investment. And yet, if you look at the enormity of the MSP community and how many vendors are already fully vested in managed services, it may seem odd that anyone would doubt that there is at least a huge party going on in the global managed services community.
Still, people like data. So, let's take stock in our industry and see exactly how big the managed services world really is. First, it is only in the last few years that analyst and research firms started to produce any meaningful market growth and size studies on managed services. Today, there are some decent studies that approximate where the market is in terms of revenue.
How Much Money is Being Spent on Managed Services?
According to Gartner, the 2013 IT spending forecast stands at around $3.7 trillion. Of that amount, approximately $926 billion is being spent on IT services. Now, because Gartner isn't providing a great deal of visibility into that IT services segment, we have to do a little deductive reasoning to figure out how much is being spent on managed services.
According to Markets and Markets the 2013 spending on managed services is around $142 billion; projected to grow to $256 billion by 2018 (CAGR of 12.4%). We see here that taking two different analyst reports the $142B in managed services spending is in relation to $926B of overall IT services. But, how do these firms define managed services?
Defining Managed Services
The problem with defining managed services, or put another way, with analysts defining a profession in which they are not providers of the services can present many problems. First, practitioners should be in charge of defining their profession. This has been a central theme of the MSPAlliance for many years. Second, because there are so many differing (often competing) definitions, it makes it more complex and challenging for the customer.
