The global managed services market is poised for rapid and sustained growth, with projections from Credence Research indicating a compound annual growth rate (CAGR) of 14.5% from 2024 to 2032. The market is expected to grow from USD 335.3 billion in 2024 to over USD 990 billion by the end of the forecast period, as organizations increasingly seek third-party expertise to manage complex IT operations, optimize costs, and strengthen cybersecurity defenses.
According to Credence Research, several converging trends are fueling this expansion. The growing intricacy of IT infrastructures – driven by technologies such as artificial intelligence (AI), cloud computing, machine learning (ML), and the Internet of Things (IoT) – has outpaced the capacity of many in-house IT teams. As a result, businesses are turning to managed service providers (MSPs) to help maintain performance, ensure seamless integration, and enable scalability across multi-cloud and hybrid environments.
Operational efficiency and cost optimization remain core drivers of demand. By partnering with MSPs, organizations can convert capital expenditures into more predictable operational costs, reduce internal workloads, and gain access to automation, analytics, and 24/7 monitoring services. Credence Research emphasizes that this shift allows companies to focus internal resources on innovation and core business priorities while relying on managed services to maintain IT agility and uptime.
Cybersecurity, Talent Shortages
The report also underscores the accelerating role of cybersecurity in driving managed services adoption. With cyberthreats like ransomware, phishing, and advanced persistent threats (APTs) on the rise, many organizations are prioritizing managed security services to protect sensitive data and maintain regulatory compliance. Credence Research notes that MSPs offering end-to-end security – spanning threat detection, incident response, firewall management, and data protection – are becoming indispensable as organizations grapple with an increasingly volatile threat landscape.
Talent shortages are compounding the issue. The demand for skilled IT professionals in AI, cybersecurity, and cloud management continues to outstrip supply, creating operational gaps that MSPs are uniquely positioned to fill. By outsourcing to MSPs, companies gain access to expert personnel without the long-term burden of recruitment and training – an especially appealing proposition in today’s tight labor market.
Challenges for MSPs
Despite the optimistic outlook, Credence Research highlights several ongoing challenges for MSPs. Chief among them is the need to stay ahead of evolving cyberthreats. Given that MSPs often manage multiple client networks, they are high-value targets for attackers. Any breach can have cascading consequences, amplifying both liability and reputational risk. The need for continual investment in advanced security tools, threat intelligence, and compliance controls is not only resource-intensive but critical to maintaining trust.
Pricing pressure is another concern. As more providers enter the managed services space, competition intensifies, often driving down margins. Some MSPs, in pursuit of market share, adopt unsustainable pricing models that limit future profitability and complicate contract renegotiations. Credence Research warns that unless pricing structures evolve to reflect value delivered, MSPs risk long-term financial strain.
Scalability is also a key hurdle, particularly for smaller providers. Rapid client growth, service diversification, and the need to integrate with legacy IT systems can strain technical and human resources. Poor demand forecasting and inefficient resource allocation can lead to slow response times and diminished service quality.
In terms of compliance, managed service providers must continually adapt to a shifting regulatory landscape. Regional and industry-specific mandates such as GDPR, HIPAA, and CCPA require MSPs to implement localized data storage and processing practices. This adds complexity and cost, especially for providers offering global services.
Strong Market Outlook
Despite these headwinds, Credence Research maintains a strong market outlook. The increasing reliance on managed services – particularly in areas such as hybrid cloud management, data center outsourcing, and managed security – offers long-term growth opportunities. Businesses that strategically partner with MSPs are likely to achieve better operational resilience, faster digital transformation, and improved focus on strategic initiatives.
For organizations navigating digital complexity and IT transformation, the managed services model presents a viable path forward. As Credence Research concludes, the ability of MSPs to offer scalable, secure, and cost-effective solutions will remain critical in helping enterprises adapt to the demands of a connected and data-driven world.
