Report: Global businesses will shell out $140B on managed services by 2016

As more large enterprises look for a way to curb IT management costs, they are turning more of their respective telecom service functions over to a service provider.

Insight Research confirms in its new report, "Managed Services in an IP World: Global Opportunities for Wireless and Wired Networks 2011-2016" that even though business spending on telecom service will only grow in single-digit percentages by 2016, global spending on managed services will grow at an annual compounded rate of 14.7 percent during the period.

This growth outlook will contribute to a doubling of managed service revenues from $140 billion in 2012 to $266 billion in 2016.

There are five managed service segments that service providers will continue to offer their clients, including: managed data center services, managed infrastructure, managed LAN services, managed WAN services, and managed mobility services.

"As enterprises shift their applications to the cloud and as more users access these applications via mobile devices, the level of complexity involved in managing these moving targets increases," said Fran Caulfield, research director for Insight Research. "Buying a suite of managed services can get the enterprise around the complexity--the local IT manager can outsource the most difficult tasks to a service provider, and probably get the job done faster and at a lower cost."

Such a forecast should be music to the ears to large service providers, especially both domestic  providers like AT&T (NYSE: T), CenturyLink (NYSE: CTL) and Verizon (NYSE: VZ), and other well-established global players such as BT (NYSE: BT), NTT (NYSE: NTT), Orange and Tata (NYSE: TCL) that are expanding their global holdings to appeal to new and existing customers.

For more:
- see the release

Related articles:
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Insight Research: Wireless backhaul will help triple Ethernet spending by 2016
Savvis to expand data center reach to support more cloud, managed services
Challenging economy drives SMB interest in managed services

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