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A managed service provider (MSP) is a third-party company that remotely manages a customer’s IT infrastructure and end-user systems. They deliver services like network, application, infrastructure, and security services through ongoing and regular support with active administration on customers’ premises.

Small- and medium-sized businesses (SMBs), nonprofits, and government agencies that lack in-house resources hire MSPs to perform a defined set of day-to-day management services. From healthcare to retail to B2B, MSPs offer support to businesses in all verticals and of all shapes and sizes.

According to research from Statista, the demand for managed services has grown exponentially over the past few years. In 2019, the global managed services market was valued at $185.98 billion and is projected to reach $356.24 billion by 2025.

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The different types of providers called MSPs

Before determining which MSP is the right fit for your business, organizations must understand that they can be structured in many different ways. MSPs may specialize in a particular subset of technology.

Different types of MSPs include those who focus on:

  • Managed IT services that focus on broad support to provide general maintenance of hardware and software components. 
  • Managed networks involve the setup and/or maintenance of IT infrastructure.
  • Managed help desks to provide general troubleshooting, issue resolution, and general IT support to end users.
  • Managed desktop/remote services that can assist with setting up and maintaining end-user devices, such as laptops and tablets.
  • Managed backup and recovery MSPs focus on keeping data accessible during or after a breach or disaster, typically involving secure storage of company data.
  • Managed telecom/video conferencing services can help set up and maintain communications through video and audio calls.
  • Managed cloud services that support businesses migrating and maintaining their cloud platforms.
  • Managed Software as a Service (SaaS) providers will help implement and provide ongoing user support for SaaS applications and platforms.
  • Managed IoT service providers help maintain IoT platforms and/or connected sensors for businesses.
  • Managed print services, which help with physical printing solutions for businesses, including solutions around payments, marketing initiatives, or employee communications.
  • Managed data analytics providers will help gather, cleanse, and interpret data insights for companies to use in their business initiatives.

Many functions can be expected from an MSP, including project management, auditing, integration with other critical systems, strategic guidance, ensuring compliance, and process improvement. Some providers will offer multiple services and functions across technology types, while others specialize in one or two to build greater expertise for those who need it.

MSP vs. MSSP vs. VAR

MSPs, MSSPs, and VARs are three different types of third-party companies that can assist organizations with growing their IT posture. These IT service providers can fill gaps in internal IT staff and provide more services to the end-user. Because companies can’t always hire their way into new capabilities or build a sound IT infrastructure independently, they lean on MSPs, MSSPs, and VARs to help grow their companies.

What are the differences between the three? For starters, MSPs focus on a broad range of IT services to help manage and optimize an organization’s IT infrastructure and operations. Managed security service providers (MSSPs), meanwhile, offer specialized cybersecurity services to protect an organization from cyber threats. They typically offer services such as threat monitoring, intrusion detection, firewall management, patch management, endpoint protection, and penetration testing.

VARs, or value-added resellers, focus primarily on selling and implementing hardware and software solutions. They can customize these solutions for specific business needs and are often experts in certain technologies.

What services does an MSP typically offer?

The responsibilities that MSPs can typically perform include:

  • Handling IT infrastructure management
  • Offering technical support to staff
  • Augmenting cybersecurity solutions and strategy
  • Managing user access accounts
  • Handling contract management
  • Offering compliance and risk management

How MSPs can help address business problems

MSPs can be powerful resources for businesses of all sizes by helping address significant business challenges that can be roadblocks for your organization. MSPs provide proactive IT management, ensure system stability, optimize costs through outsourced IT support, maintain effective data management, improve security against cyber threats, facilitate cloud migration, and allow businesses to focus on core competencies instead of managing day-to-day IT issues.

Through these partnerships with MSPs, businesses can delegate essential tasks of IT management to a dedicated team, thus freeing up time and resources for other high-priority areas of their organization.

Costs associated with hiring an MSP

There are several costs associated with hiring an MSP. Fixed monthly fees are a cost consideration when hiring an MSP. Monthly flat rates are often offered by MSPs, which allows businesses to create a stable budget plan. These rates cover various IT support services and ensure businesses can effectively distribute resources while maintaining dependable IT support.

Other MSPs may offer pay-as-you-go pricing structures that allow businesses to scale their IT services according to fluctuating demands. This versatile model enables organizations to tailor their IT support to their specific requirements. Pay-as-you-go pricing models allow businesses to scale their IT services to meet fluctuating demands and lead to significant cost savings. The flexibility of pay-as-you-go pricing models ensures resources are allocated efficiently.

On-site vs. remote support pricing structures can involve higher costs because of travel expenses and additional labor. Remote support, meanwhile, can be more cost-effective.

Additionally, businesses should be aware that there can be hidden costs when partnering with MSPs. Vendor lock-in is one of these potential hidden costs, which requires businesses to commit to long-term contracts or use proprietary technologies. This can make it difficult to switch providers, if necessary. Organizations should thoroughly review contract terms to find any potential restrictions before signing on with an MSP.

Service Level Agreements (SLAs) can outline the services that an MSP will provide. Unclear SLAs can lead to businesses struggling to hold their MSPs accountable for subpar service.

Other hidden costs associated with partnering with an MSP include setup and onboarding fees, service add-ons, overage charges, contract termination fees, software licensing costs, compliance and certification costs, data migration fees, training costs, travel expenses, or emergency support fees.

Businesses evaluating the costs of working with an MSP have many considerations they can take to ensure they’re utilizing their resources effectively.

Here are a few tips for your organization:

  • Review SLAs: As mentioned before, businesses should ensure MSPs provide clear and comprehensive SLAs that outline service levels, response times, and performance metrics. 
  • Assess hidden costs: Keep an eye out for hidden costs such as vendor lock-in, unclear SLAs, and poor communication channels.
  • Compare pricing models: Evaluate pricing structures that MSPs offer, including fixed monthly fees, pay-as-you-go services, and per-device models, and determine which models best align with business needs and budget.
  • Request references and reviews: If requested, many MSPs will offer references from current clients. Further, it’s essential to check online reviews to assess an MSP’s reputation and track record.

Where businesses can find an MSP to partner with

There are several ways for businesses to find MSPs to help them with operational efficiency. Attending industry events and conferences is a great way to find the right partner. Here, you can meet with individual MSPs and hear about the services they offer through presentations, roundtable discussions, and client success stories.

Further, representatives from your businesses can have discussions with representatives from other businesses about potential MSP partnerships.

Additionally, enterprises can find MSPs to partner with through online directories, leveraging networking platforms such as LinkedIn, joining industry groups, contacting vendor partners with established MSP programs, and reaching out to local IT service providers.

Bottom line: An MSP can be a powerful resource

MSPs can be great for businesses of all sizes to attain proactive support and services that can decrease or eliminate business downtime and reduce costs. If you are losing working hours to broken hardware, frozen software, network outages, and updates that take forever or constantly error out, your organization should consider partnering with an MSP.

Even organizations with in-house IT staff can benefit from partnering with MSPs. MSPs offer a degree of specialization, as well as the ability to free up the existing IT staff to handle other daily, time-consuming tasks.

Frequently Asked Questions

What is an MSP in tech?

A managed service provider (MSP) in tech is a third-party company that remotely manages a customer’s IT infrastructure and end-user systems. They deliver services, such as network, application, infrastructure, and security, via ongoing and regular support.

What is an MSP in staffing?

An MSP in staffing is a third-party company that manages a company’s contingent workforce from requisition through invoicing and payment. The MSP is in charge of raising awareness of temporary positions within local labor markets.

What is an MSP in recruitment?

MSPs in recruitment assume primary responsibility for the management of sourcing, engagement, and administration of temporary, contract, and other non-permanent workers. These third-party staffing companies offer organizations the flexibility to manage their costs and staffing needs during uncertain times while attaining the best talent for the workforce.

What is a cloud managed service provider?

Cloud MSPs specialize in managing and optimizing a client’s cloud-based IT infrastructure. They offer services such as cloud migration, configuration, monitoring, security, and support, acting as third-party experts.

MSPs are also key partners in the adoption of emerging technologies. Read more about how an MSP can help build successful AI implementation strategies.

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