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ISG data comparing IaaS, SaaS, and Managed Services

Bit more market data from ISG.  For first quarter 2021, the combined global market for deals that exceeded $5 million in value for both as-a-service offerings and managed services reached $17.1 billion, up 11 percent over a year ago and 4 percent over the fourth quarter of 2020. The first quarter of 2021 was the third consecutive quarter of global growth since the COVID-19 pandemic hit in the second quarter of 2020, according to ISG.

The as-a-service portion of the IT services is growing much faster than traditional managed services, the report notes. The value of deals involving the consumption of cloud services tracked by ISG increased 15 percent to reach a record $9.9 billion level in the first quarter. Within the as-a-service segment, revenues generated by infrastructure-as-a-service (IaaS) deals reached a record $7.2 billion, up 18 percent year-over-year. Software-as-a-service (SaaS) produced a record $2.7 billion, up seven percent year-over-year.

ISG is forecasting the market for cloud-based services will grow 18 percent globally in 2021, down slightly from its 20 percent forecast at the start of the year. ISG has raised its 2021 growth forecast for managed services to five percent, up two points from the start of the year.

Why do we care?

The roll up numbers are great.    This is likely showing some industries even better than we think, dragged down by others.     As-a-Service – that’s the win.       This data is clearly larger deals, but that’s helpful to understand the trend.   IaaS and SaaS growing more than managed services, which I expect to see play out in the SMB as well.

It’s a good market out there too.

Source: Smarter MSP