Managed service provider
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A managed services provider (MSP), is typically an information technology (IT) services provider, who manages and assumes responsibility for providing a defined set of services to their clients either proactively or as they (not the client) determine that the services are needed. Most MSPs bill a flat or near-fixed monthly fee, which benefits their clients by providing them with predictable IT support costs.[1]
Many MSPs now provide many of their services remotely over the Internet rather than having to perform on-site client visits, which is time consuming and often expensive. Common services provided by MSPs include remote network, desktop and security monitoring, patch management and remote data back-up, as well as technical assistance.
The business model behind managed services was commonplace among enterprise level companies, provided by large IT support companies such as EDS (Electronic Data Systems), IBM Global Services, and Centerbeam. The model was later adapted to fit small to medium sized companies by the value-added reseller (VAR) community as their existing model of reselling hardware and software continually provided lower profit margins. Some of the pioneers of what is today known as Managed Services included Dynasis (Atlanta), SLPowers (South Florida), Connecting Point (Las Vegas) and Claranet (London).
Managed Services Providers typically offer several price structures. Most commonly used is a per-month fee, but MSPs may also charge using a time and material model as well as price per desktop, server, or network device. For this fee they will monitor their client's IT infrastructure and resolve any issues that arise within it. This provides peace of mind and predictaqble costs for the client, as well as predictable revenues for the MSP. Managed services often looked at as a way for small and medium sized businesses to outsource their IT needs a lower cost than building an in-house IT support department.
One major challenge that MSPs faced was in changing from the reactive break-fix model to which they were accustomed into the new proactive managed services model, particularly because a hybrid solution was needed, since many times clients still required on-site visits, which the MSP had to either provide or contract.
As the buzz around Managed Services and MSPs grew within the IT support community, some early adopters attempted to make their service available to other, emerging, MSPs allowing them to slowly transition to an MSP model while still enjoying revenue from a time and materials billing model. Some of these providers began marketing themselves as Master Managed Service Provider, although the model was seldom succesful.
According to the Institute for Partner Education & Development, most established Managed Services Provider's revenues come from delivering contracted recurring services onsite or remotely. Including any combination of hardware and software in a managed services solutions as well as an ASP (Application Services Provider) model.
Customer & Service Provider (SP) Managed Services Benefits
Key customer benefits:
- Customer peace of mind – monitor network on 24x7x365 basis proactively
- Single point of contact for and all network issues
- Single supplier instead of multiple vendors
- Defined Service Levels (for service delivery)
- Known costs for management & fixed price contracts
- Avoid costs of building own management & reporting systems
- Lower Total Cost Ownership (TCO) for client
Key Service Provider benefits:
- Business contracts – extended longevity (in line with CPE life spans)
- Increased ‘stickiness’ & ARPU (average revenue per user)
- Ability to interact with & influence customers at a business/application decision making level
- Protect vital carriage revenue by de-commoditising & value adding
Growing Range of Managed Services Product Offerings
- Managed Voice Access and Networking
- Managed Integrated Access
- Managed Remote Access
- Network Monitoring
- Network Element Management
- Network Management
- Fault & Performance Management
- Configuration Management
- Managed Router Service
- Managed Server Service
- Managed VPN / IP-VPN
- Managed Wireless LAN (WLAN)
- Asset Management
- Managed Videoconferencing
- Managed IP-PBX & Applications
- Hosted IP-PBX & Applications
- Managed Voice Security
- Managed Firewall
- Managed Intrusion Detection
- Vulnerability Scanning
- Incident Management
- Anti-Virus & Spam Management
- Secure Messaging/E-mail
- Threat Assessment Monitoring
- Managed Business Continuity Service
- Software as a Service (SaaS)
- Managed video as a service (MVaaS)
- Hosted Video as a Service (HVaaS)