What is a Managed Services Provider?
Managed Service Provider or MSP is a concept in which businesses outsource certain services to specialized providers. Any company that offers services focused on maintaining and operating the IT infrastructure and end-user systems is known as a managed service provider.
SMEs are the target customer as only a few small and mid-sized companies have in-house IT capabilities to meet their demand. Hence many depend on obtaining the required expertise through their MSP.
What functions does an MSP perform?
Broadly speaking, service providers are individuals or entities that provide services to another party. As previously mentioned, the term MSP overwhelmingly applies to outsourced IT services. The following areas of business activity are regularly performed by MSPs: managing IT infrastructure and cybersecurity, technical user support and fully managed hardware and software outsourcing.
The world of Information Technology is vast; therefore it is safe to assume that anything related to the provision of IT activities can be outsourced as you will see below in MSP examples.
What is the MSP business model?
ModernWhen talking about IT services, many will think of software updates and virus removal, however, these services only scratch the surface of those available. There are many options available to your business, Most MSPs operate with two kinds of offerings. First, there’s the project-based technical support service wherein an MSP is tasked with modifying or repairing a single problem, and that’s that.
The second most common service model is the subscription type, wherein organizations pay MSPs a standard fee for servicing their IT on a monthly, quarterly or annual basis, typically under a Service Level Agreement (SLA). Thereby, if something breaks during the subscription period, the MSP sends its team to fix the problem free of charge since the organization’s monthly fee covers it. Anything overtime or outside the scope of the agreement is typically compensated per hour.
What is the state of the MSP market?
According to research, the managed services market will grow to $311 billion by 2027, almost doubling from 2021s $161 billion, buoyed by increased number of MSPs and the need for niche specialization.
It is estimated that the successful deployment of managed services by growing organizations help reduce IT costs by 25-45% and increase operational efficiency by 45-65% accordingly. Moreover, since COVID-19, the demand for cloud-based solutions has seen significant growth due to remote working models being adopted.
What are the benefits of an MSP?
Technology has come a long way since the latter days, and the reality is that most organizations today are not equipped to keep up with the pace of innovation. As a result, many find their IT to be reactive rather than proactive. Hence why so many multinationals have contracted MSPs who are specialized. Why so?
Contracting an MSP has several advantages and brings cost benefits, such as:
- Avoiding downtime – MSPs can help adopt a proactive approach when it comes to critical systems;
- Gain access to experts – MSPs have experts for every vertical, each with years of experience;
- Access to technology – MSPs have the know-how to advise on the best applicable technology;
- Cost efficiency – it is often more cost-efficient to hire an MSP than keeping it in-house;
- Easy to scale – MSPs can provide advice and adapt to the company’s decision when scaling up or down.
Are you looking for an MSP?
The right MSP can provide all the tools and services you need to keep your infrastructure in order. Think of them as an extension of your IT department, or for smaller organizations, you can consider using them as the IT Department, providing you with the expertise and resilience that your company is looking for.
Now that you have a clearer understanding of who MSPs are can you start to ask the right questions. The best place to start asking questions is with us at Nmore Group, where we have the answers, you’ll likely want to hear.