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Asia/Pacific (Excluding Japan) Application Management Service Market Forecast: 2020-2024

Published by IDC Product code 990092
Published Content info 12 Pages
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Asia/Pacific (Excluding Japan) Application Management Service Market Forecast: 2020-2024
Published: February 16, 2021 Content info: 12 Pages
Description

As enterprises in Asia/Pacific (excluding Japan) (APEJ) turned to new ways of working and serving customers remotely, application management (AM) SPs were quick to help enterprises remain resilient during the disruptions brought by the COVID-19 pandemic. The APEJ market for AM services was worth US$4.01 billion in 2020. It is projected to grow to US$4.79 billion in 2024 at a compound annual growth rate (CAGR) of 4.5% for 2020-2024. The year 2020 was an unprecedented year for AM services, and the challenges are expected to remain for 2021.Key findings in assessing the market and industry's transformation over the past year include:AM services spending remained flat. The overall spending on AM services remained flat in APEJ during 2020, reaching US$4.01 billion in 2020, and it is expected to reach US$4.79 billion in 2024. The region's year-over-year (YoY) growth rate took a slight dip in 2020 because of customers reevaluating their AM strategies because of the penetration of software-as-a-service (SaaS) applications and the increasing migration of application workloads to cloud environments. Additionally, the COVID-19 pandemic had an impact on service payment schedules from clients, reduction in contract scopes, and delays in contract renewals.The Australia and New Zealand and Greater China regions maintained their positions as the largest AM services markets, whereas the India and Southeast Asia markets led with their YoY growths. Australia and New Zealand (ANZ) and Greater China retained their positions as the largest AM services markets with US$1.48 billion and US$976.13 million, respectively. Meanwhile, growth rates in India and Southeast Asia look quite positive compared with the modest growth rates of other regions in APEJ. With this, India and Southeast Asia are expected to provide the much-needed boost to the overall application services market. India's YoY growth rate leads the overall application services market with a 6.55% CAGR (2019-2024), reaching US$491.08 million in 2020. This is followed by Southeast Asia's 6.39% CAGR (2019-2024), reaching US$956.13 million in 2020.New avenues for growth are underpinned by cloud and app modernization. Vendors continue to bundle short-term AM services contracts either as part of larger digital transformation (DX) engagements aimed at transforming customer/employee experiences or postimplementation projects in line with application modernization efforts. Implementation and transformation projects do not end the same way they used to, and enterprise customers want their transformation partners to stay on even after a project's milestones to drive improvement continuously. Many of these relationships have translated to management services deals. According to IDC's 2020 Asia/Pacific IT Services Survey, 73.3% of enterprises stated that they are not reducing spending on application modernization services, indicating significant opportunities for AM SPs. Additionally, vendors continue to broaden their capabilities in managed cloud services to aid customers that are modernizing their applications by rearchitecting or replatforming applications for cloud. IDC expects these initiatives to help AM service vendors get new opportunities from enterprises in the region.AM SPs hinge on differentiation in value generation. Although the growth of SaaS-based applications has impacted the demand for traditional AM services, enterprises find the partnership with AM SPs valuable because of their expertise in autonomous operations, access to technical resources and industry experts, alignment with business objectives, experience in rationalizing app estate, and ability to chart the path for application modernization.

Table of Contents
Product Code: AP47378921

IDC Market Forecast Figure

Executive Summary

Advice for Technology Suppliers

Market Forecast

Market Context

  • Drivers and Inhibitors
    • Drivers
      • Application Modernization Initiatives
      • Cost Efficiency Measures
      • Providing Seamless Application Experiences
    • Inhibitors
      • Security
      • Growth of Alternative Models and Competition
  • Significant Market Developments
  • Changes from Prior Forecast

Market Definition

  • Exceptions and Exclusions

Methodology

Related Research

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