A global study commissioned by Cisco and conducted by Canalys predicts substantial growth for IT channel partners specializing in managed services in 2023. Despite economic uncertainty, the sector is expected to expand by 12.7%, reaching a global value of US$472 billion, surpassing the estimated 3.5% growth in overall IT spending.
In the Asia Pacific Region (APAC), managed services revenue stands at US$95 billion, with an anticipated growth rate of 14%. Notably, in India, channel partners saw an impressive 16.1% increase in managed services revenue in 2022, totaling US$7.4 billion.
“In the digital era where technology plays an increasingly critical role across industries, customer expectations and requirements in the IT landscape are evolving significantly. Organizations are now turning to their partners for solutions that not only provide agility and value, but also offer flexible consumption models to efficiently manage their ever-expanding and intricate technological needs,” said Panish PK, Managing Director, Partner Business Group, Cisco India and SAARC. “It is promising to witness the substantial growth of managed services in India, with 19.4% year-on-year increase in Indian partners providing these services. This growth reflects customers’ evolving IT needs, as well as a major shift in how partners are addressing them.”
“As we move ahead into India’s techade, we see significant opportunities for channel partners to innovate and capitalize on this opportunity by helping companies adapt to emerging technologies and enhance their IT investments to achieve better business outcomes,” he added.
The main drivers of this growth are the increasing demand for cybersecurity, the need for technology expertise, and flexible consumption models. The study reveals that 56% of channel partners expect revenues from cybersecurity managed services to rise in 2023.
Confidence among channel partners has also surged, with 35% expecting at least 20% growth in their managed services businesses in 2023, up from 27% in 2022. Cloud infrastructure management is identified as another key growth area, with 55% of channel partners expecting revenue growth in this segment.
Emerging technologies like AI and a focus on sustainability measures are projected to accelerate revenue growth for managed service providers. The study indicates that 59% of partners see AI as a significant business opportunity, and 57% believe customers are willing to pay a premium for sustainability products and solutions.
Overall, the study suggests that partners specializing in managed services play a crucial role in helping businesses maximize their technology investments, solve IT challenges, and drive business growth. Revenues for partners delivering managed services are expected to experience double-digit Compound Annual Growth Rate (CAGR) figures across all regions from 2023 to 2025.