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

Network World - 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 $66 billion by 2012.

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

Overall, the study found 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 $17 billion, according to the study. Although the study found that VPN services will remain the most widely deployed managed service in 2012, it also said that VoIP will experience the fastest growth over the next four years with a 39% 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," said Ovum analyst 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 $6 billion by 2011.

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.

The Ovum study also found 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% CAGR that 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 $41.5 billion by 2009.

Reprinted with permission from

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