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Managed Service Provider (MSP) – Mastering the Winds of Change

INTRODUCTION

Over the last few years, the Managed Service Provider (MSP) market has experienced steady growth as well as concurrent elementary changes that are altering the dynamics of the market. Not only are buyer expectation and drivers changing, but also the buyer profile. The service provider landscape too is morphing as is the operating model of the providers. This flux in MSP makes it imperative for buyers to understand what they can derive from the offering in the market, and service providers to update/upgrade their service portfolio.

In this research, we analyze the MSP market across various dimensions

  • Market overview and key business drivers
  • Shifting market dynamics
  • Buyer adoption and solution characteristics
  • Service provider landscape
  • Future outlook

Distribution of MSP FTEs

Scope of the analysis

The scope and methodology of this report includes:

  • MSP deals with a minimum of four core processes
  • Deals with a minimum contract term of two years
  • Scope of hires includes temporary/contingent hires, SoW consultants, and independent contractors
  • All geographies and industries

MSP Business Models and their Prevalence

CONTENT

This research provides comprehensive coverage of the MSP market and analyzes it across various dimensions such as market overview, key business drivers, and shifting market dynamics across buyer adoption trends, solution and transaction trends, and service provider landscape. Additionally, it includes predictions for market size, buyer adoption, solution and transaction trends, and service provider landscape for the MSP market.

  • The managed spend in the MSP market grew by 13-16% in 2012 to reach US$60-65 billion. The current market size, in terms of Net Fee Income (NFI), is ~US$1.05 billion
  • The MSP market has evolved to include varying job families and different types of workers within its scope
  • With increasing maturity, MSPs have started to gain cost benefits through centralization of some MSP processes and pioneering usage of nearshoring/offshoring
  • The large market is the pioneer of MSP but smaller organizations too are increasingly adopting MSP
  • Vendor management and transaction-intensive processes are the most frequently included processes in MSP contracts
  • There are three primary categories of service providers based on their background and value proposition / approach to the market: staffing-legacy MSPs, pure-play MSPs, and other “new” providers
  • While few providers have global capabilities, a large number of players have regional focus