Managed Domain Name System (DNS) Market

[247 Pages Report] MarketsandMarkets forecasts that the managed DNS market size is projected to grow from USD 0.6 billion in 2023 to USD 1.3 billion by 2028, at a CAGR of 18.1% during the forecast period. Improving customer experience is a priority for telecom operators. With the escalating frequency and sophistication of cyber threats, organizations have shown a heightened interest in secure and resilient DNS solutions to protect against DNS-based attacks like DDoS (Distributed Denial of Service) attacks. The increasing use of mobile devices for internet access has led to a surge in DNS queries from various locations and devices, driving the need for responsive and reliable managed DNS.

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Managed DNS Market Dynamics

Driver:  High return on investment and enhanced customer experience

DNS plays a vital role when it comes to the reliability and performance of cloud and web applications. Enterprises require a higher CAPEX for setting up and managing DNS infrastructure, which acts as a central system to run the internet ecosystem. Owning the DNS server provides a business with more control as its network administrator can manage, configure, and secure the DNS. However, ownership of DNS servers comes with several disadvantages such as maintaining in-house IT teams, continuous updating of DNS networks, vulnerabilities, and higher CAPEX investment. As a result, enterprises prefer managed DNS which comes with benefits such as a global anycast network, a dedicated team of experts for DNS management, scalability, reliability, security, and availability. The majority of DNS providers offer cloud-based services that reduce the overall CAPEX and OPEX with faster TTM. The simple nature of DNS services with 24*7 support services significantly drives demand for managed DNS across SMEs and large enterprises. The competitive environment and global economic situation have accelerated the adoption of cost-effective measures to restructure business models. The increasing shift of enterprises toward digital transformation and accelerating customer experience is also leading to the adoption of DNS services that ultimately reduce enterprise costs. The cloud offers the pay-as-you-go model, which enables enterprises to pay as per their usage of DNS services, leading to reduced costs. Consumer behavior and demands have been evolving tremendously in recent years. The rising customer expectations and growing competition among the leading market players are increasing the demand for cost-effective measures to enhance operational efficiencies. Enterprises cannot afford to have a lower customer experience due to the unavailability of their websites. 24*7*365 availability of websites and cloud applications with 99.999% SLA uptime helps enterprises engage with their employees and customers and improve workplace productivity.

Restraint: Technological complexities

The technological complexity within the domain name system (DNS) services market presents a multifaceted challenge for providers. As the DNS ecosystem undergoes continuous evolution with the introduction of technologies such as IPv6, DNS Security Extensions (DNSSEC), and advanced routing protocols, service providers must grapple with seamless integration. The implementation of DNSSEC, aimed at enhancing security through cryptographic signatures, demands meticulous configuration. Additionally, the transition to IPv6 and the coexistence of IPv4 and IPv6 addresses introduce intricacies in configuration and management. In the context of multi-cloud environments, DNS services must adeptly integrate with diverse infrastructures and service offerings. The growing emphasis on automation and orchestration in IT operations necessitates providers to navigate the complexities of automated workflows while minimizing the risk of errors. Scalability challenges, particularly in handling increased volumes of DNS queries, and the intricacies of DNS load balancing further contribute to the technological intricacies. Successful providers must invest in research and development, maintain a skilled workforce, and adopt advanced technologies to effectively navigate and overcome these complexities, ensuring the delivery of reliable and innovative managed DNS in a competitive market.

Opportunity: The increasing online presence of various businesses across different verticals

Sectors such as retail and eCommerce, media and entertainment, and BFSI follow the customer-centric business model, which ensures higher customer experience. eCommerce companies such as Amazon, Walmart, Flipkart, and Alibaba have started big billion shopping days that lead to higher revenue and humongous web traffic. Over the last few years, retailers have worked on delivering the best end-to-end experience to users. The eCommerce sector has been growing at an unprecedented rate in developed and developing economies. The growing online customer base is compelling retailers to enhance customer experience through safeguarding web infrastructure. DNS service providers help retail and eCommerce companies safeguard DNS infrastructure from DDoS attacks. The COVID-19 pandemic has created huge opportunities for eCommerce businesses in the coming years. The following table depicts the sector-wise use cases/application areas that will increase DNS usage, in turn creating opportunities for managed DNS service providers.

Challenge: Market competition

In the realm of managed DNS, market competition emerges as a formidable challenge, shaping the strategies and operations of service providers. The landscape is characterized by intense rivalry, prompting providers to navigate several critical factors. Pricing pressures create a dynamic where providers must find a delicate equilibrium between offering competitive rates and maintaining the quality and features of their DNS services. Innovation becomes paramount as companies strive to differentiate themselves, requiring ongoing investment in research and development to introduce new features and stay ahead of technological trends. Quality of service stands as a non-negotiable criterion, with providers needing to ensure low latency, high reliability, and robust security to retain and attract clientele. The global reach of network infrastructure, customer support excellence, and transparent Service Level Agreements (SLAs) are pivotal elements in this competitive landscape. Marketing and branding strategies play a crucial role in establishing a distinct identity while addressing concerns related to vendor lock-in becomes essential for customer retention. Regulatory compliance, potential mergers and acquisitions, and a continuous adaptation to market dynamics further contribute to the intricate challenges posed by competition.

Managed DNS market Ecosystem

Prominent companies in this market include a well-established, financially stable provider of the managed DNS market. These companies have innovated their offerings and possess a diversified product portfolio, state-of-the-art technologies, and marketing networks. Prominent companies in this market include AWS (US), Cloudflare (US), DNS Made Easy (US), GoDaddy (US), Vercara (US), Akamai (US), CDNetworks (US), Microsoft (US), NS1 (US), Oracle (US).

By enterprise, the education segment is expected to grow with the highest CAGR during the forecast period

In the education industry, managed DNS offers benefits such as load balancing to handle peak traffic on educational websites, DDoS mitigation to safeguard against cyber threats, and geographical load balancing for global institutions seeking optimized content delivery. With user-friendly interfaces and customization options, managed DNS facilitates easy domain management, including the creation of custom records and configurations. The redundancy and failover capabilities ensure uninterrupted access to critical learning platforms, while support for SPF and DKIM enhances email security, a vital aspect of communication in educational settings. Scalability features enable institutions to adapt to changing demands, and analytics tools contribute to proactive monitoring and optimization of DNS performance

By enterprise, the BFSI segment holds the largest market size during the forecast period

BFSI is a vital industry vertical, as it deals with financial data. The changes in economics significantly affect banks, insurance firms, and other players in the financial sector. The management in this vertical is under constant pressure to meet the required targets, and thus, needs a network that is more reliable and robust. Therefore, advanced technologies and various software and solutions can help BFSI companies prioritize their actions to manage their network smoothly.

Based on region, North America holds the largest market size during the forecast period

The managed DNS market in North America has been experiencing significant growth and development. The managed DNS market in North America is characterized by a dynamic interplay of factors that shape its landscape. With the pervasive increase in internet usage for diverse activities, the demand for reliable DNS services has grown substantially. Security concerns remain a pivotal driver, compelling businesses to seek managed DNS providers offering robust protection against cyber threats. Cloud adoption trends contribute significantly to the market, favoring providers with seamless integration capabilities. Performance optimization is a focal point, emphasizing features like low latency and effective

Market Players:

The major players in the Managed DNS market are AWS (US), Cloudflare (US), DNS Made Easy (UK), GoDaddy (US), and Akamai (Spain). These players have adopted various growth strategies, such as partnerships, agreements and collaborations, new product launches, product enhancements, and acquisitions to expand their footprint in the managed DNS market.

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Scope of the Report

This research report categorizes the managed DNS market based on DNS service, DNS server, cloud deployment, end user, enterprise, and region.

Based on DNS Service:

• Anycast Network
• Distributed Denial of Service Protection
• GeoDNS
• Other DNS Services

Based on DNS Server:

• Primary DNS Servers
• Secondary DNS Servers

Based on Cloud Deployment

• Public Cloud
• Private Cloud
• Hybrid Cloud

Based on End User

• Service providers
• Enterprises

Based on Enterprise:

• BFSI
• Retail & eCommerce
• Media & Entertainment
• Healthcare
• IT & ITeS
• Government
• Education
• Other Enterprises

Based on the region:

• North America
  • US
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Spain
  • Italy
  • Nordic Countries
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia & New Zealand (ANZ)
  • Southeast Asia
  • Rest of Asia Pacific
• Middle East & Africa
  • GCC Countries
    • UAE
    • KSA
    • Rest of GCC Countries
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America

Recent Developments

• In April 2023, IBM acquired NS1. With the acquisition, IBM is adding core networking services, including NS1’s managed DNS capabilities, to its growing portfolio of network automation software.
• In February 2023, CDNetworks announced support for QUIC and HTTP/3, to enhance the company’s capabilities in web application performance and improve the efficiency of network transmissions.
• In February 2022, Cloudflare acquired Vectrix, to help businesses gain visibility and control of their applications. V Citrix enhances Cloudflare’s existing Zero Trust platform, Cloudflare One, by allowing security teams to scan third-party tools–including Google Workspace, GitHub, and AWS–to detect and mitigate issues such as inappropriate file sharing and user permission misconfigurations.
• In July 2022, NS1 announced two new supports for DNS record types: SVCB (“service binding”) and HTTPS (Hypertext Transfer Protocol Secure).
• In September 2022, Cloudflare announced Turnstile, a simple, private way to replace CAPTCHA (Completely Automated Public Turing test to tell Computers and Humans Apart) and help validate humanity across the Internet.

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