According to an IDC report released Thursday, the average managed services contract value increased more than 22% year-over-year in 2022, a sign of ongoing enterprise technology investment in this category.
The analyst firm’s Services Contracts Database showed that more than 1,700 managed services deals were signed in 2022, reaching $125 billion in contract value. However, according to the company, the number of deals contracted from last year.
Despite economic concerns, IT spending in this category is expected to continue to grow this year, with more than 2,300 managed services deals worth around $122 billion coming up for renewal.
And while we’re considering service providers, The 2023 ISG Provider Lens Microsoft Cloud Ecosystem report for the U.S. finds many enterprises invested heavily in platforms like Microsoft 365, Power Platform, and the Azure hyper-scale cloud to keep their businesses running during the pandemic, when work and commerce moved largely online.
The number of deals is less significant than the contract value, and contract values continue increasing. 22% is pretty healthy – I wouldn’t expect to see 40, 50, or 60 percent growth here – and it outpaces some of the 10-15% growth numbers I’ve seen.
Bit of confidence to start the week – and note, the ISG report focuses above the typical managed services provider level on where enterprise value is in that productivity layer.