The Managed Application Services market is estimated to be valued at US$ 5.41 Bn in 2023 and is expected to exhibit a CAGR of 21% over the forecast period from 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
Managed application services refers to the practice of outsourcing the management of custom and packaged business applications like ERP, SCM and CRM to third-party vendors. These services help firms to focus on their core competencies by relieving themselves of issues related to application deployment, security, performance and support. The rising need for automation and optimization of various business processes has significantly boosted demand for these services in recent years.

Market Dynamics:
The managed application services market is driven by the rising smartphone penetration rates globally which has increased accessibility and adoption of various mobile applications. According to Statista, the number of smartphone users worldwide is expected to reach 6.3 billion in 2023, up from 3.8 billion in 2015. Moreover, growing digitization of enterprises has prompted many firms to either migrate their legacy systems to cloud or replace them with modern digital platforms which requires implementation and management support from third-party vendors. However, data security concerns and budgetary limitations pose challenges to the growth of this market.

SWOT Analysis

Strength: Managed Application Services allows organizations to focus on their core business competencies and increase operational efficiency. It helps reduce application management costs and improve application performance. Managed service providers have skilled resources and experts to manage critical applications.

Weakness: Organizations lose control over critical applications and related changes when outsourcing to managed service providers. There are also data privacy and security concerns related to outsourcing applications. Transitioning from in-house to outsourced model requires changes that could disrupt operations.

Opportunity: Growing need among organizations to optimize application management costs is driving demand for managed application services. Increasing adoption of cloud-based applications also creates opportunities for managed service providers.

Threats: Economic downturns may force organizations to delay outsourcing decisions and manage applications in-house. Poaching of skilled resources by competitors poses retention challenges for service providers.

Key Takeaways

The global Managed Application Services Market Share is expected to witness high growth, exhibiting a CAGR of 21% over the forecast period, due to increasing demand from organizations to streamline application management processes and optimize costs.

Regional analysis: North America dominated the global market in 2023, accounting for around 35% of the total share, due to the presence of many global managed service providers in the region. Asia Pacific is anticipated to witness fastest growth over the coming years, owing to growing adoption of outsourcing models among organizations in the region.

Key players: Key players operating in the Managed Application Services are Fujitsu Limited, Mindtree Limited, IBM Corporation, Wipro Limited, Unisys Corporation, CenturyLink Inc., Virtustream Inc. and HCL Technologies Limited. Unisys Corporation offers managed applications services across verticals through its Digital Workplace Services portfolio.

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