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Managed service provider services: emerging Asia–Pacific forecast 2018–2023Managed service providerservices: emerging Asia–Pacific forecast 2018–2023Terry van Staden and Dev Chakravarty
Managed service provider services: emerging Asia–Pacific forecast 2018–20232Contents7. Executive summary21. Definitions: infrastructure [1]8. Executive summary: MSP revenue will grow significantly in EMAP between2018 and 2023, driven by IT and managed services, infrastructure andbusiness applications22. Definitions: infrastructure [2]9. Forecast results24. Definitions: infrastructure [4]10. MSPs in EMAP will generate almost USD50 billion of revenue in 2023,which is around 8% of the total ICT market25. Definitions: infrastructure [5]23. Definitions: infrastructure [3]11. IT and managed services, infrastructure and business applications accountfor nearly 75% of MSP revenue in EMAP and will deliver strong revenuegrowth26. Definitions: infrastructure [6]12. MSPs’ core target markets are companies with 50–999 employees, butthere are opportunities for revenue growth in businesses of all sizes28. About the authors13. IT and managed services: consulting, integration and support servicesaccount for nearly half of MSPs’ revenue from IT and managed services14. Infrastructure is one of the largest and fastest-growing components ofMSPs’ portfolios, driven by the growing demand for cloud server andnetworking services15. Business applications revenue is expected to grow at a CAGR of 23%between 2018 and 2023, driven by businesses adopting SaaS16. Forecast methodology and definitions17. Our methodology: we use extensive primary research, along with vendorand macroeconomic insights to size and segment the market opportunityand outlook18. Definitions: IT and managed services [1]19. Definitions: IT and managed services [2]20. Definitions: IT and managed services [3]27. About the authors and Analysys Mason29. Analysys Mason’s consulting and research are uniquely positioned30. Research from Analysys Mason31. About AMI-Partners
Managed service provider services: emerging Asia–Pacific forecast 2018–20233List of figuresFigure 1: Change in MSPs’ revenue by level 1 category, emerging Asia–Pacific,2018–2023Figure 14c: Definitions and key drivers for IT and managed servicesFigure 2: MSPs’ revenue, split by cloud and on-premises, emerging Asia–Pacific, 2018–2023Figure 15b: Definitions and key drivers for infrastructureFigure 3: MSPs’ revenue in 2018, and CAGR for revenue 2018–2023, bybusiness size, emerging Asia–PacificFigure 15d: Definitions and key drivers for infrastructureFigure 4: Share of business spending on ICT services in 2018 and CAGR for2018–2023, by channel, emerging Asia–PacificFigure 5: Total business spending on ICT services and MSPs’ share, emergingAsia–Pacific, 2018–2023Figure 6: MSPs’ revenue, by level 1 category, emerging Asia–Pacific, 2018–2023Figure 7: Breakdown of MSPs’ revenue in 2018 and CAGR for 2018–2023, bylevel 1 category, emerging Asia–PacificFigure 8: MSPs’ revenue by business size, emerging Asia–Pacific, 2018–2023Figure 9: MSPs’ revenue and CAGR, by level 1 category and business size,emerging Asia–Pacific, 2018–2023Figure 10: MSPs’ revenue from IT and managed services, by aggregated level 3categories, emerging Asia–Pacific, 2018–2023Figure 11: MSPs’ revenue from infrastructure, split by cloud and on-premises,emerging Asia–Pacific, 2018–2023Figure 12: MSPs’ revenue from infrastructure services, by level 3 category,emerging Asia–Pacific, 2018–2023Figure 13: MSPs’ revenue from business applications, by level 2 category,emerging Asia–Pacific, 2018–2023Figure 14a: Definitions and key drivers for IT and managed servicesFigure 15a: Definitions and key drivers for infrastructureFigure 15c: Definitions and key drivers for infrastructureFigure 15e: Definitions and key drivers for infrastructureFigure 15f: Definitions and key drivers for infrastructure
Managed service provider services: emerging Asia–Pacific forecast 2018–20234About this reportThis report provides forecasts for the managed service provider(MSP) market in emerging Asia–Pacific (EMAP) and covers the keyindividual services and business segments that represent thelargest opportunity for MSPs.It highlights the rapid revenue growth that is expected in the MSPmarket between 2018 and 2023 as businesses increasingly moveto ‘as-a-service’ models. MSPs will be one of the fastest-growingroutes to market as more businesses seek MSP support to movetheir propositions to the cloud.This report quantifies the revenue opportunity for MSPs in nineICT categories and provides more-granular data on the categoriesthat are the most significant opportunities for MSPs(infrastructure, IT and managed services, and businessapplications).It is based on the following sources: Business applications Cyber security Infrastructure Devices and peripherals IT and managed services Platforms Collaboration Web services CommunicationsWHO SHOULD READ THIS REPORT MSPs that want to identify key areas for revenue growth, both in termsof business segments and individual services. the Analysys Mason ICT Global Model1 Service providers that are looking to enter the managed ICT servicesmarket. a survey of 950 MSPs in emerging Asia–Pacific Telecoms operators that are looking to enter the managed ICT servicesmarket. economic indicators, such as GDP and population growth vendor and supply-side indicators, such as pricing andfinancial reporting.1KEY ICT CATEGORIESFor more information, see Analysys Mason's SMB ICT channels and forecasts practice.
Managed service provider services: emerging Asia–Pacific forecast 2018–20235Analysys Mason’s ICT Global Model: metrics included in this report [1] 11 level 1 categories 130 level 3 categories 37 level 2 categories In this reportPCsLevel 3Feature ng and Peripheralsperipherals Printing iness intelligenceCRMEmailEnterprise contentOn-premises/ managementlicensedHRsoftwarePayrollTravel and expensesAccounting/financialBusiness intelligenceCRMEmailERPHRMarketing automationPayrollPoint of salesProductivityProject managementQuotes and invoicingTravel and expensesPC/device as a service (PCDaaS)VirtualisationNetworking softwarePoint of salesQuotes and invoicingServerNetworking servicesLine-of-business softwareProject managementIaaSNetworking hardwareERPProductivitySoftware as Line of businesssoftwarea serviceStorage softwareInfrastructureLevel 2MobilehardwareLevel 2Storage hardwareOn-premises/licensed softwareSoftware as a serviceEndpoint securityCyber securityBusiness applicationsDevices andperipheralsLevel 1Level 1Mobile securityNetwork securitySecurity hardwareSoftware as a serviceFC SANNASSAN switchesTape backupBackup and recovery (on-premises)Replication softwareLevel 3IP SANPC attached storageServer attached storageOther storage softwareStorage resource managementsoftwareIaaS storage simple developmentIaaS serverIaaS storage online backupRecovery as a service (RaaS)IaaS server colocationServerDesktop as a service (DaaS)Desktop virtualisationServer virtualisationStorage virtualisationLAN switchesRouters (wired)Wireless LANCloud VPNIP VPNWANNetworking softwarePoint-to-point VPNDatabase (on-premises)MiddlewareMobile application developmentOperating systemDatabase (SaaS)EncryptionSecure content managementWeb/messaging security (onWeb/messaging security (SaaS)premises)Mobile application management (onMobile application management (SaaS)premises)Mobile device management (MDM)Mobile device management (SaaS)Identity and access management (on- Identity and access managementpremises)(SaaS)Security information and eventSecurity information and eventmanagement (on-premises)managementIntrusion detection and preventionPoint-to-point VPN/firewallSecurity policy, vulnerability and event managementDedicated security appliance Unified threat management applianceIaaS securityAnalysys Mason’s ICT Global Model has more than 130 level 3 categories. This report provides level 1 category information foralmost all categories of services, and focuses on level 2 and level 3 information for the categories that are most important to MSPs(infrastructure, IT and managed services, and business applications).
Managed service provider services: emerging Asia–Pacific forecast 2018–20236Analysys Mason’s ICT Global Model: metrics included in this report [2]Level 1Level 2Product support servicesProfessional servicesIT and managed servicesRemote managed IT services market(RMITS)On-premises/licensed softwareSoftware as a serviceCollaborationUC servicesUC softwareFixed hardwareFixed servicesInternet accessCommunicationsMobile service plansUC hardwarePlatformsDigital marketing and advertisingPlatform as a serviceDigital marketing and advertisingSocialWeb servicesWeb hosting and developmentComputing supportSecurity supportStorage supportDevelopment and integrationProcess managementOther IT servicesNetworking (wired)PBX (TDM and/or IP-PBX)SecurityStorageCollaboration (on-premises)Collaboration – business workflowCollaboration – fileshareAudio conferencingVideo conferencingCommunications/unified messaging softwarePresence/enterprise instant messaging (EIM)Pure TDM-PBX/key systemsIP trunkingLocal/long-distance telephonyWired broadbandWireless broadbandFeature phone plan (voice, text)Smartphone plan (data, voice, text)Tablet plan (data)IP PBX/hybridIP phones/adaptorsPlatform as a service (PaaS)Display advertisingSearch engine marketingSocial media marketingWebsite developmentWebsite hosting/maintenanceLevel 3Networking supportSoftware supportIT consultingMobile device (MMS)Networking (wireless)PCServerHosted VoIPWeb conferencing
Managed service provider services: emerging Asia–Pacific forecast 2018–202310MSPs in EMAP will generate almost USD50 billion of revenue in 2023, which isaround 8% of the total ICT marketThe total ICT services spend in EMAP is expected to exceedUSD600 billion by 2023. We expect MSPs to be one of thefastest-growing routes to market (Figure 4). MSPs’ revenue willincrease at a CAGR of 20% between 2018 and 2023, therebyboosting their ICT services market share from 5% in 2018 to8% in 2023.Businesses that are migrating their propositions to the cloud arethe main driver of the increased demand for MSPs’ services.Many small and medium-sized businesses (SMBs) do not havethe in-house ICT expertise to handle this move and will requireMSP assistance.Figure 4: Share of business spending on ICT services in 2018and CAGR for 2018–2023, by channel, emerging Asia–PacificFigure 5: Total business spending on ICT services and MSPs’share, emerging Asia–Pacific, 2018–2023
Managed service provider services: emerging Asia–Pacific forecast 2018–202311IT and managed services, infrastructure and business applications account fornearly 75% of MSP revenue in EMAP and will deliver strong revenue growthWe expect that MSP revenue in all the categories included inthis report will grow considerably in EMAP. Most of the revenueand revenue growth will come from the core areas of ICT andmanaged services, infrastructure and business applications.MSPs generally have a diverse portfolio of services in order tocater to a wide range of client requirements and to capitalise onthe widespread growth in the ICT market.The majority of MSP revenue comes from the core categoriesmentioned above, but other categories will also offer significantrevenue growth opportunities. Revenue from web services,communication and cyber security is expected to grow rapidly,and MSPs should consider expanding into these areas.Figure 6: MSPs’ revenue, by level 1 category, emerging Asia–Pacific, 2018–2023Figure 7: Breakdown of MSPs’ revenue in 2018 and CAGR for2018–2023, by level 1 category, emerging Asia–Pacific
Managed service provider services: emerging Asia–Pacific forecast 2018–2023ContentsExecutive summaryForecast resultsForecast methodology and definitionsAbout the authors and Analysys Mason
Managed service provider services: emerging Asia–Pacific forecast 2018–202328About the authorsTerry van Staden (Analyst) is a member of Analysys Mason’s Operator business services and IoT research practice, focusing on operatorstrategies for the enterprise market. He specialises in SME bundling strategies, primary research and is responsible for our enterprise surveywork. Prior to joining Analysys Mason, Terry received his masters in economics under full scholarship in South Africa, where his research paperswon – or were nominated for – several national awards. He is a member of the Golden Key International Honour Society and the recipient of theGold Duke of Edinburgh's Award.Dev Chakravarty (Analyst) is an analyst based in Analysys Mason’s India office. He is involved in all research related to the adoption of ICT bysmall and medium-sized businesses (SMBs). Dev has been involved in numerous assignments including country retainership and syndicatedreports on SMB ICT adoption and managed service provider (MSP) research, as well as multiple custom studies. Prior to joining AMI-Partners (anAnalysys Mason company), Dev was a Senior Research Executive for Business Horizons, a management consulting and market researchorganisation focusing on B2B research. Dev has a master’s degree in business administration specialising in marketing, and a bachelor’sdegree in science with honours in physics.
Managed service provider services: emerging Asia–Pacific forecast 2018–202329Analysys Mason’s consulting and research are uniquely positionedAnalysys Mason’s consulting services and research portfolioConsultingWe deliver tangible benefits to clients across the telecomsindustry: communications and digital service providers, vendors,financial and strategic investors, private equity andinfrastructure funds, governments, regulators, broadcastersand service and content providersOur sector specialists understand the distinct local challengesfacing clients, in addition to the wider effects of global forces.We are future-focused and help clients understand the challengesand opportunities new technology brings.ResearchOur dedicated team of analysts track and forecast the differentservices accessed by consumers and enterprises.We offer detailed insight into the software, infrastructure andtechnology delivering those services.Clients benefit from regular and timely intelligence, and directaccess to analysts.
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Managed service provider services: emerging Asia–Pacific forecast 2018–2023About AMI-PartnersAMI-Partners is a global ICTresearch and consulting firm thatfocuses on the small and mediumsized business (SMB) market. AMI-Partners was founded in 1996 and has over20 years of expertise in the SMB ICT market. Itwas acquired by Analysys Mason in July 2018. Its specialisms include: go-to-market opportunity assessment tracking buying behaviour customer segmentation channel partner ecosystem dynamics sales enablement. AMI-Partners has invested over USD50 million inprimary SMB research to date, thereby setting aglobal benchmark.31
Managed service provider services: emerging Asia–Pacific forecast 2018–2023PUBLISHED BY ANALYSYS MASON LIMITED IN MAY 2019Bush House North West Wing Aldwych London WC2B 4PJ UKTel: 44 (0)20 7395 9000 Email: research@analysysmason.com www.analysysmason.com/research Registered in England and Wales No. 5177472 Analysys Mason Limited 2019. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means – electronic,mechanical, photocopying, recording or otherwise – without the prior written permission of the publisher.Figures and projections contained in this report are based on publicly available information only and are produced by the Research Division of Analysys Mason Limited independently of anyclient-specific work within Analysys Mason Limited. The opinions expressed are those of the stated authors only.Analysys Mason Limited recognises that many terms appearing in this report are proprietary; all such trademarks are acknowledged and every effort has been made to indicate them by thenormal UK publishing practice of capitalisation. However, the presence of a term, in whatever form, does not affect its legal status as a trademark.Analysys Mason Limited maintains that all reasonable care and skill have been used in the compilation of this publication. However, Analysys Mason Limited shall not be under any liability forloss or damage (including consequential loss) whatsoever or howsoever arising as a result of the use of this publication by the customer, his servants, agents or any third party.
Managed service provider services: emerging Asia-Pacific forecast 2018-2023 11 IT and managed services, infrastructure and business applications account for nearly 75% of MSP revenue in EMAP and will deliver strong revenue growth Figure 6: MSPs' revenue, by level 1 category, emerging Asia- Pacific, 2018-2023
