What is a Managed Services Provider (MSP)
A managed services provider is a third-party that carries out some or all of a business’s IT functions. This can include sourcing and operating software, hardware or both. Usually a managed services provider will exercise some skill or judgement to carry out the functions rather than simply follow specific orders.
What a business wants from a managed services provider will vary, as does the range of services a specific provider offers and its areas of expertise. This means the benefits of using a managed service provider will depend greatly on choosing the right provider.
Despite this variation, managed service provider hirings usually fit into a few main categories:
- Fully Managed: Taking care of all IT needs in a small business where it wouldn’t be financially viable to hire full-time IT staff.
- Co-Managed: Taking care of specific functions which are outside the capabilities of in-house staff, for example, as a business grows and remote monitoring or servicing becomes necessary.
- Augmented: Providing a dedicated specialist service for a particular element of IT such as maintaining security or a database.
MSP Role & Functions
Don’t mistake using a managed services provider with other types of outsourcing such as hiring an overseas agency to provide data entry or answering support calls with an approved script. Instead, a managed services provider brings expertise rather than just capacity.
Their role is often not simply to achieve a specific task (such as “make sure the website is available 24/7 and copes with spikes in traffic”) but also to use their experience to decide the best approach. Of course, a good managed services provider will work with the client to find the right balance of autonomy and instruction.
A managed service provider doesn’t have to be an all-or-nothing proposition. Many businesses will use managed IT services alongside in-house staff, for example to cope with capacity or concentrate on specialist areas of IT. The best providers are well experienced with dealing with in-house staff so you won’t have to deal with administrative headaches or disputes about responsibility and decision-making.
While many managed service providers concentrate on remote operations based around software, some can provide on-site support and oversee hardware. This could include designing, installing and maintaining network equipment and cabling or on-site data storage and processing.
Strategy & Pricing Combo
Usually a manager services provider will work on a subscription basis. This means they charge a regular fee, for example billed monthly or annually, rather than work on a per-task basis. This fee could be based on the number of staff or devices covered by the service or it could be a flat rate.
One big benefit of this pricing structure is that the provider isn’t simply motivated by the need to fix a specific problem. They are also incentivized to think long-term and take measures that reduce the risk of a problem arising in the first place.