Managed cloud services are expected to see a global surge in opportunity as hybrid IT sprawl intensifies due to the COVID-19 shift to remote working.
Between 2019 and 2024, cloud professional services will grow 11.7 per cent in terms of compound annual growth rate (CAGR), with managed services expected to be the fasted growing segment.
According to analyst firm Technology Business Research (TBR), the “working-from-home reality” and the need for existing users to manage multi-cloud and hybrid environments will continue to drive this demand. In addition, opportunity for certain vendors comes will come from many customers still operating on-premises.
This, TBR said, leads to the need for advisory, consulting and implementation services, as plans to shift to the cloud come to fruition.
“Additionally, the pandemic will likely have many businesses reevaluating their IT road maps, causing an inevitable uptick in cloud adoption,” TBR senior analyst Nicole Catchpole said.
In particular, this will necessitate ongoing integration and management needs from technology-neutral vendors.
TBR estimated the current cloud professional services market to be valued at around US$10 billion as of the last two 2020 quarters. However, this marks a dip of around US$2 billion from the previous quarter of 2019.
Indeed, the analyst said general purchasing habits brought on by the COVID-19 pandemic have proved disruptive for many professional services vendors, but the market is expected to rebound quickly as customers replace legacy IT systems with cloud solutions.
As a result, managed cloud services are expected to be the fastest growing subsegment of the cloud professional services market.
On the reverse front, application development and maintenance providers will feel some pressure from automation, especially as “adoption of cloud-native technologies rises and plays a role in suppressing labor-driven resources”.