Managed cloud to replace outsourced IT, IDC says

Managed cloud revenue to hit $1b in 2023

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IDC says managed cloud services are set to replace outsourced IT with revenues hitting $1 billion in 2023 after growing at 15 percent annually in the prior four years.

In contrast, IDC says revenue for non-cloud managed services will decline at a five-year CAGR of 4 percent to 2023, and managed cloud services’ share of revenues will increase from 34 percent in 2019, to 53 percent in 2023,.

“Essentially, managed cloud services are replacing traditional outsourced-managed services markets as a set of preferred options for end-user organisations to deploy… [as] systems integrators, independent software vendors and other cloud ecosystem partners in New Zealand reap the benefits of flexible new IT service delivery model,” IDC says.

According to Chayse Gorton, IDC ANZ market analyst for IT services, organisations are turning to managed cloud-services providers to help manage increasingly complex cloud environments, provide solutions for legislative and industry compliance – especially security – support technology adoption, and access new business services to deliver business outcomes.

“Broad adoption of cloud services and technology across New Zealand is driving workload migration to the new delivery platforms and providing new opportunities for New Zealand’s IT professional services providers as enterprises seek to fill their skills gaps,” Gorton says.

“These IT services providers are increasingly embedding cloud-related services within project-oriented services such as application modernisation, workload migration, and application and data integration to provide an on-ramps to managed cloud services.”

Gorton says demand will increase for managed cloud services providers with capabilities that complement public cloud providers' capabilities. In particular, those with vertical expertise to meet the demands of enterprise line of business managers.

"Competition will intensify in 2020. Managed cloud services providers will increase their focus on strengthening partnerships with multiple cloud providers,” he says.

“They will also develop capabilities for cross-cloud migration and efficient service provisioning to tap into managed cloud-related opportunities."

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Copyright © 2019 IDG Communications, Inc.

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