Managed service revenues to jump to $297B by 2020, research firm says

Managed services like cloud-based hosting are going to be a big revenue driver for service providers, a segment that Ovum forecasts will grow to over $297 billion by 2020.

The research firm said that the largest contribution to the managed services mix will come from strategic information and communications technology services, with revenues expected to reach nearly $173 billion, rising at a CAGR (compound annual growth rate) of 9.9 percent during the next five years.

By the year 2018, Ovum expects strategic ICT (information and communications technology) services such as managed networks, professional services, and unified communications to surpass legacy service revenues.

From a regional perspective, Latin America and Africa will lead the growth of managed ICT services with 17.8 and 17.5 percent CAGR, respectively, followed by the Middle East at 16.4 percent and Central Asia at 13 percent. Although Europe and North America will grow at a slower pace, they will remain one of the largest regions in 2020.  

Besides growing their service portfolios, a number of providers are offering enterprise managed services via dedicated business units or divisions and are complementing their service sets by establishing partnerships with integrators like Accenture and other IT service providers. Ovum said that telcos overall have taken more than 14 percent of the global ICT services market in the last couple of years, and should reach more than 18 percent by 2020. Release

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