Managed Services Market: Growing 18 Percent Annually?

I’m frequently skeptical of market forecasts, but they’re still a valuable tool for “guestimating” how a market will evolve. In the case of managed services, Ovum (a consulting firm) predicts the worldwide industry will grow 18 percent annually to $66 billion by 2012.

Is that forecast accurate? First, it’s important to zero in on the research metrics.

In this case, Ovum was surveying more than 1,300 enterprise managed service users. Yes, that’s an important audience. But it doesn’t cover small and midsize business owners, who increasingly outsource IT functions to MSPs. Also of note: The study was commissioned by Cisco Systems Inc.

I’m not suggesting that the numbers were manipulated. And vendor-driven research has a place in the market, especially if you’re trying to determine how to align your business with a vendor’s product and market strategy. Still, Cisco’s influence certainly ensured that the report covered network-centric topics like metro Ethernet, managed IP, VPNs, managed VoIP and managed security.

From where I sit, I think it’s important to further explore areas like software as a service (SaaS) melding with managed services. Plus, areas like managed storage — where many MSPs are making a healthy living these days.

Even so, Ovum has put an important stake in the ground with its research. I tend to agree that the MSP market will enjoy healthy double-digit growth for the next few years. And VARs that are struggling with thin margins should certainly embrace an industry that’s growing 18 percent annually.