The European managed IT services market comprises businesses that remotely manage clients’ IT environments. Depending on the player, services offered can include the management of voice and data, enterprise networks, security, equipment, cloud, hosting, data centres and applications. The industry can be segmented based on players’ specialisation. As such, we segmented the European market into: (i) full value chain, (ii) cloud and (iii) security.

The European market has a fragmented nature and is comprised of generalist IT businesses (e.g. Computacenter, Infosys), consultancies (e.g. Capgemini, Accenture) and specialist managed services providers (“MSPs”). Local MSPs are ubiquitous as customers prefer domestic providers due to the geographic proximity, the same language and local market understanding. However, the managed IT services industry is on a consolidating track, with both large multinationals (e.g. Accenture) and PE-backed MSPs (e.g. Nasstar) engaging in active buy-and-build strategies.

Investor-led interest has been strong across Europe, with >70% of identified assets being PE-backed (February 2023). The main drivers for this significant level of interest include the favourable growth outlook of the industry, nearly full revenue visibility on the back of long-term customer relationships, as well as the mission-critical nature of managed services with respect to customers’ IT infrastructures.

ESG issues play a minor role in the managed IT services market. The main topic on top of executives’ minds is the proper handling of sensitive customer data which, in case of a breach, can lead to unrepairable reputational damage. Apart from that, some MSPs play an active role in offsetting the environmental footprint of their clients’ operations, for example by partnering with more power-efficient data centre providers.