Managed Application Services

Managed Application Services: Enabling Businesses to Focus on Core Competencies


In today’s highly competitive business landscape, companies are under constant pressure to innovate, streamline operations and deliver superior customer experiences. However, maintaining and managing the IT infrastructure and applications required to power mission-critical business functions can become a significant distraction draining valuable resources away from the core activities. This is where managed application services providers can help by taking over non-core yet important IT responsibilities, freeing businesses to concentrate on what matters most.

What are Managed Application Services?

Managed Application Services involve a third-party provider delivering ongoing management and support for specific business applications and software on behalf of their client. Under a managed services model, the provider assumes primary responsibility for maintaining, monitoring, updating and securing the application environment along with providing technical support to end users. This allows businesses to hand over day-to-day operational headaches to an experienced partner while retaining control over strategic decisions.

Key benefits include:

Increased IT efficiency and stability
Managed application services help eliminate unnecessary firefighting and downtime by proactively monitoring systems for issues. Providers apply best practices, conduct routine maintenance, apply patches and upgrades to ensure applications run seamlessly in the background. This results in higher system uptime and productivity.

Access to specialized expertise
Managed services partners have deep experience managing diverse technology stacks and application landscapes at scale. They keep staff trained on the latest tools, techniques and security practices. Businesses gain access to a wealth of technical talent otherwise unaffordable or difficult to hire.

Flexible payment models
Managed services shift costs from capital-intensive to predictable operational expenses (such as monthly subscription fees). Vendors also handle underlying costs for infrastructure, software licenses etc. bringing greater cost control and transparency compared to running applications in-house.

Focus on core business priorities
By outsourcing non-core app support and management, companies reclaim budgets and redeploy valuable IT personnel onto strategic initiatives generating direct business value. Resources can now plan and develop solutions to drive growth, innovation and competitive advantage.

Key Areas Addressed by Managed Application Services

Managed application service providers deliver customized support packages covering different functional areas depending on client needs such as:

Application management
Day-to-day operational activities including application configuration, user access controls, release/version management, backup/restore, troubleshooting issues.

Infrastructure management
Maintaining underlying compute, storage, networking resources as well as virtual/cloud servers hosting applications. Performing server OS administration, patching, upgrades, monitoring systems health.

Security management
Rolling out security updates, conducting vulnerability scans, penetration testing, training users, complying with regulatory policies, coordinating response plans.

Performance optimization
Proactively analyzing usage trends, redesigning database schemas and queries, automating workflows, scaling infrastructure on demand to improve speed and scalability.

Reporting and analytics
Providing actionable reports with benchmarks and KPIs on system uptime, release deployments, security incidents, resource consumption, user adoption levels and more.

Custom solution development
Partnerships for one-time or ongoing custom configuration, integration and development projects to extend application capabilities or streamline processes.

Managing the transition to managed services
To ensure smooth transition and adoption of a managed services model, providers thoroughly assess existing environments, documentation, processes beforehand. Cutover activities involve migrating workloads, establishing governance frameworks, conducting knowledge transfer and change readiness programs for all stakeholders. Partners then assume responsibilities gradually with continuous feedback cycles for refinement.

Managed Application Services Market Outlook

The global market for managed application services is witnessing strong growth driven by the growing adoption of cloud-based SaaS applications and a maturing managed services industry. Key industry estimates value the market size at over $30 billion currently growing at 15-18% annually. Regional market leaders for managed application services include North America, Western Europe and Australia/New Zealand given their advanced IT environments, digitization levels and acceptance of commercial outsourcing.

Industry analysts predict spending on managed application and IT infrastructure services will continue shifting from inflexible on-premise models towards consumption-based cloud delivery. Managed services are also gaining traction in emerging markets like Asia Pacific and Latin America as local companies look to replicate digital strategies of global competitors. Going forward, the demand drivers of regulatory compliance needs, security considerations, digital business priorities and skills shortages would remain key catalysts for outsourcing non-core operations to trusted service partners.

Managed application services have emerged as a strategic solution empowering companies of all sizes across industries to reduce IT burdens while focusing on core objectives. Experienced vendors bring much needed scale, expertise and flexibility to managing complex applications landscapes for global clients. Using an outcome-based managed services framework frees internal resources that can then help drive competitive differentiation through new technology deployments and customer experiences. As digital business models take center stage, outsourcing non-core IT responsibilities will continue augmenting internal innovation capabilities for sustainable growth.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it