How Many MSPs Are There In The US And Worldwide?
The Managed Service Providers (MSPs) market has experienced exponential growth in recent years. And, it is not expected to peak any time soon.
Businesses adopt Information Technology (IT) managed services to digitize and automate processes. The goal of this is to optimize efficiencies, productivity, and scalability, manage and improve IT security, and manage their data better.
Let’s take a look at the MSP market size and consider the current trends impacting its growth.
USA
North America currently dominates the global MSP market in terms of revenue. This is mainly due to a large presence of major market players who focus on increasing their presence in major industries. These include telecommunication, medical, finance, and government.
Many things drive this market including:
the adoption of bring-your-own-device (BYOD) strategies and cloud-based services
the advancement in mobility services, big data, and computing.
The most recent figures estimate that MSPs in North America dominate approximately 13% of its total Information Technology and Communications (ITC) market. This is approximately USD120 billion in revenue of an estimated USD900 billion market.
In 2019, 78% of this revenue was generated by IT and managed services, infrastructure, and business applications.
So how many MSPs are there in the US? In 2019, ConnectWise estimated that there are about 40,000.
How does the US measure up globally?
While North America is identified as the largest market in terms of revenue, Asia Pacific is emerging as the fastest-growing. China and India are among the most notable influencers.
China prioritizes digital transformation in business, focusing on reducing security risks and optimizing and improving technology. There is global reliance on India for its IT and IT-enabled services. Transformation in their banking sector has led to a large investment in cloud computing and cloud storage technology.
Europe is expected to experience large growth due to an increase in cyber-threats, adoption of cloud-based solutions, and demand for data management. There are also several key market players in this region.
MSP Overall Market Size
In 2019, the global MSP market size was valued at approximately USD 200.29 billion. It was expected to grow at a Compound Annual Growth Rate (CARG) ranging between 11.32% and 12.2% during a forecast period of 2018-2023.
A 2019 article on the MSP market size speculated that the market would grow to approximately USD492.15 billion by 2027.
Recent 2021 articles provide a useful comparative picture using data from both 2019 and 2020.
One article states that the global MSP market was valued at approximately USD152.05 billion in 2020 and may reach USD274.20 billion by 2026. Other estimates provide that it could exceed USD350 billion by 2026.
Statistica 2021 provides data that suggests that the market value was slightly higher in 2020, ranging between approximately USD207.40 and USD223 billion. Also, there is speculation that the market will already cross the USD350 billion mark by 2025.
This data provides predictions over several years that one can compare to the actual, annual, global market size achieved. Furthermore, it demonstrates that the market is growing exponentially and is expected to continue to do so.
Let’s consider some of the current trends that influence this growth.
MSP Growth and Trends
One must consider MSP growth and trends in the context of the global COVID-19 pandemic (COVID). As businesses move to accommodate remote working options, and some industries experience disruption of services due to lock-down restrictions, MSPs have had to shift the focus of their service offering to accommodate these changes.
Security
With the move to remote working, businesses need to protect users from home and not just office devices. MSPs who focus on security solutions can experience large-scale growth as a result. This is because remote or hybrid work environments may remain as a COVID legacy.
COVID aside, data breaches and cybercrimes have been on the rise. This creates a need for detection and prevention, threat intelligence, and security asset management services. MSPs need to constantly develop and improve on their technology and services to keep ahead of cybercriminals who continue to exploit new vulnerabilities.
The Cloud and Big Data
Big data and cloud applications are on the rise due to large storage capacities that manage the flow of growing internet traffic.
Cloud-based solutions are in demand because they:
improve cybersecurity
store data in one location
enable remote management
and provide automatic back-ups, amongst other things.
COVID has also increased this demand due to remote working.
BYOD
There has been a rising adoption of BYOD strategies in recent years. This strategy allows businesses to access and manage data through their workers’ personal devices.
BYOD strategies reduce IT costs and in turn, capital expenditure. However, workers having multiple smartphones, laptops, and tablets also increases security needs. Businesses then outsource these to MSPs who monitor and secure against cyber threats.
Competition, Cost-cutting, and Operational Efficiency
Like it or not, businesses need to invest in improved technology to gain a competitive advantage, or simply to move with the times.
Even with a limited IT budget, investing in IT or outsourcing can still be cheaper and more efficient than investing in IT personnel. Small or medium-sized businesses are a key market for MSPs to target with software and services that make the investment worthwhile.
Last Thoughts
Statistics on market size and projections on future growth vary considerably due to the sample sizes data is based on and differing forecast periods.
While trends will change year-on-year, COVID has demonstrated that some forces impacting markets can intervene before we can even predict them. Therefore, managed IT services is a fast-growing industry that will only continue to expand.