What is the definition of a managed service provider?

A managed service provider is a company which provides services which are essential to the smooth running of a business, but are not core to the business. This could be anything from office cleaning to IT. The basic idea behind managed services is that specialist companies can manage these sorts of tasks far more effectively than their client companies and hence can often save their clients money as well as time.

The basics of IT managed services

In the context of IT, a managed services provider can perform any and all of a wide range of services generally relating to applications, infrastructure and networks and security. The emphasis is very much on continuous maintenance and support (as opposed to the traditional break/fix approach) and the services managed may be hosted at the client’s own premises, in the MSP’s premises or in a third-party data center (or, in principle, a combination of two or three of these options). There are several factors driving the popularity of managed service providers. Here are some of the main ones.

The need for effective cybersecurity

Effective cybersecurity rests on a combination of robust IT infrastructure and solid physical security. This means that IT now has to be managed in a very mindful way with data security and “privacy by design” kept front and center in every decision and action. The harsh reality is that in the modern world, even the tiniest slip-ups can have serious consequences. For example, forgetting to apply a patch or update can open the door to a cyberattacker who knows how to exploit the vulnerability the patch was intended to fix.

Managed Service Provider

Managed service providers literally make it their business to ensure that the security of your precious data is given the importance it needs. Not only are they IT specialists who understand digital defenses but if your infrastructure is hosted on their premises, they can also take care of physical security.

This could be a significant benefit for two reasons. Firstly, it relieves you of the need to find space for IT infrastructure. Secondly, managed service providers not only choose their business locations to prioritize security over convenience, but they also implement the sort of physical security measures which would be considered rather excessive in the average business.

The reassurance of guaranteed service

Recruitment and retention is a challenge for just about all businesses, but some can find it harder than others. It’s a sad fact of life that SMBs often struggle to recruit skilled IT staff (and skilled cybersecurity staff are in particularly short supply). Even if SMBs are able to match the sort of salaries and benefits offered by larger companies and specialist IT firms, they are highly unlikely to be able to offer the same sorts of opportunities for further training and professional development. Using a managed service provider means that they get the service they need without the hassle of having to recruit the staff to provide it.

As an added bonus, this can also facilitate a high degree of flexibility to accommodate the peaks and troughs of business cycles. Instead of having to recruit short-term staff (either directly or through agencies), integrate them into an existing team and get them up to speed on what they need to know about that particular company (even if it’s just how to find the building and how to get around it), companies just increase their provision with their managed service provider and get on with doing whatever it is they need to do.

Manageable billing

Even though the world has largely moved on from cash payments, cash flow is still the life-blood of any business and astute companies learn to manage it very carefully. This is particularly true of SMBs as they are unlikely to have significant cash reserves. Because of this, many SMBs very much appreciate the fact that moving to managed services allows them to stop worrying about unexpected capital expenses (like replacing equipment) and simply pay one monthly bill which guarantees them all the services they need.

As an added bonus, moving to managed services can actually do a lot to reduce costs. Firstly, using a managed service provider eliminates all the expenses of recruitment and retention (plus all the management time devoted to staffing issues). Secondly, the managed service provider’s costs are spread out across their entire client base rather than heaped on a single client. Thirdly, managed service providers are more likely to be able to tap into volume discounts from which their clients will then benefit.

Difference between managed and unmanaged switch