Study: Managed services market to crack US$66 billion by 2012

Cisco-commissioned study projects strong growth in North American market

Ovum, a consulting firm that specializes in telecom and software consulting, released a study this week projecting that the global market for managed services will deliver revenues of US$66 billion by 2012.

The study, collected data from more than 1,300 enterprise managed service users in 14 different companies, projects that managed IP-based services will see a compound annual growth rate of 18 per cent over the next four years. The study was done by done by Ovum, a consulting firm that specializes in telecom and software consulting, and had initially been commissioned by Cisco.

Overall, the study finds that the managed services generating the most interest among corporate users are managed metro Ethernet, managed IP, VPNs, managed VoIP and managed security.

IP VPN services are the largest global managed services market, with revenues totaling US$17 billion, the study finds. While the study projects VPN services to remain the most widely deployed managed service in 2012, it also says that VoIP will experience the fastest growth over the next four years with a 39 per cent CAGR.

"CIOs and IT directors are increasingly looking to service providers and managed service specialists for deployment and management of their networks to reduce costs and improve efficiency," says Ovum research director Peter Hall. "This results in significant opportunities for those able to meet those needs, especially in the areas of managed voice and security."

Other studies have also shown a fast-growing market for managed security services. Data published by business research and consulting firm Frost & Sullivan, for instance, projects that the managed security services will exceed US$6 billion by 2011.

Additionally, a poll conducted earlier last year by CompTIA showed that nearly one-third of 322 organizations surveyed planned to make new investments or increase spending on managed security services.

In addition to its findings on global managed services growth, the study also projects that North America will overtake Europe as the largest overall market for managed services by 2010, and that the Asia-Pacific managed services market will see 27 per cent CAGR that the study says will be driven mostly by growth in India and China.

Ovum had previously conducted a similar study of managed services growth in 2006, which projected that the managed-services market would generate revenues of US$41.5 billion by 2009.

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