Robust Growth for IT Channel Partners Focusing on Managed Services in 2023: Cisco

There is a promising outlook for IT channel partners specializing in managed services in 2023, according to a comprehensive global study commissioned by Cisco and conducted by Canalys.
IT managed servicesDespite ongoing global economic uncertainties, the study predicts a substantial worldwide growth of 12.7 percent in the managed services sector, surging to a total value of US$472 billion. This growth outpaces the estimated 3.5 percent increase in overall IT spending.

Key Growth Drivers: Cybersecurity, Expertise, and Flexible Consumption Models

One of the primary catalysts for this surge in demand is the urgent need for enhanced cybersecurity solutions. Organizations worldwide grapple with an ever-evolving threat landscape, and coupled with a critical shortage of cybersecurity and IT talent on a global scale, many organizations are turning to managed services partners for their expertise and support. The study highlights that 56 percent of channel partners expect revenues from cybersecurity managed services to witness substantial growth this year.

“Customers are integrating more technology into their operations and they expect their IT partners to provide agility, value, and flexible consumption models to efficiently manage their growing and complex technology needs,” Alexandra Zagury, Vice President of Partner Managed Services and as-a-Service Sales at Cisco, said.

Global Growth and Market Confidence

Amidst this global growth trajectory, confidence among channel partners specializing in managed services has surged significantly. In June 2023, the study revealed that 35 percent of channel partners expected growth of at least 20 percent in their managed services business for the current year. This indicates a substantial increase compared to the 27 percent reported in 2022, highlighting a rapid uptake of managed services across organizations of all sizes.

“Managed services are the force driving the global IT industry’s adaptability and growth. Our research underscores the substantial potential for companies selling managed services, opening up diverse avenues for them to thrive in a post-pandemic era,” Robin Ody, Senior Analyst at Canalys, said.

Cloud Infrastructure Management and Emerging Technologies

The study identified cloud infrastructure management as another pivotal growth opportunity. As organizations continue to digitize operations and transition to the cloud, they encounter challenges with complex cloud infrastructure spanning private and public clouds, alongside distributed applications and services. This has propelled the need for cloud infrastructure management and expertise, with 55 percent of channel partners anticipating revenue growth in this segment for the current year.

Furthermore, the study highlighted the potential for accelerated revenue growth for managed service providers with the emergence of technologies such as AI and the increasing emphasis on sustainability measures driven by IT investments. Approximately 59 percent of partners believed that AI presented a significant business opportunity, with 39 percent deeming it to be “significant” or “tremendous”. Likewise, 57 percent believed that customers would be willing to pay a premium for sustainability products and solutions.

The study concludes that revenues for partners delivering managed services are poised for global growth between 2023 and 2025, with double-digit Compound Annual Growth Rate (CAGR) figures anticipated across all regions. The Asia-Pacific region is expected to witness a 14 percent growth, reaching US$95 billion. In Europe, the Middle East, and Africa, the sector is expected to grow up to 12 percent from its current US$122 billion. Latin America is expected to grow by 11-12 percent from US$11.5 billion, while North America will see growth ranging between 10-12 percent from its current US$190.6 billion.

Related News

Latest News

Latest News