Managed Service Provider (MSP)- Definition, Benefits and Service


Managed Service Provider (MSP)- Definition, Benefits and Service managed service provider msp

Like outsourcing can hand over software development to a third-party outsourced team, everyday business functionalities can also be delegated to service providers who can take care of your business infrastructure for you, and the providers are known as Managed Service Providers (MSPs).

Managed Service Providers can partner with businesses of any scale, but how do they work, and how effective are they? Let’s find answers to all your questions right after we learn the definition of MSP.

What Is The Managed Service Provider (MSP) Model?

A Managed Service Provider is a third-party organization that handles all the IT infrastructure and end-user systems for their client business.

Primary clients for this service model are Small-to-Medium Businesses (SMBs), nonprofit organizations, and various government agencies. They hire MSPs to complete a defined set of day-to-day management services.

MSP handles management services and allows its clients to focus on customer services without worrying about or allocating additional in-house resources to manage extended systems or any service interruptions.

Use Cases for MSP

As mentioned earlier, MSP is majorly used for IT infrastructure management, which includes:

  • Adding Cybersecurity To IT Systems
  • Handling Contract Management
  • Managing User Access Accounts on Client Systems
  • Providing Payroll Services
  • Providing Technical Support
  • Offering Compliance And Risk Management
  • Offering Hardware Outsourcing Services

How Managed Service Providers Work

Proactive Approach And Break-Fix Models

MSPs take a proactive approach to ensure all technical systems of their client’s business run efficiently. The MSPs constantly try to avoid technical issues instead of waiting for any difficulty to appear.

Some MSPs also use a break-fix model. The MSP will charge the client company in this model for each infrastructure issue they address. The break-fix model is ideal for businesses looking to fix specific issues within the core business infrastructure.

Managed IT Services

MSPs with IT specialization can offer a wide range of IT services serving small to large businesses. These services include:

  • Cloud-based monitoring
  • Cloud productivity systems
  • Customer help desk support
  • Data security
  • End-user systems
  • General technical and internet support
  • Infrastructure management
  • IT disaster recovery
  • Mobile device management
  • Networks and server management
  • Remote monitoring and management (RMM)
  • User account access

The MSPs provide these services through remote support over the Internet or the cloud.

SMB Managed Service Consumption

MSPs are ideal for small and Small-to-Medium Businesses, as they can optimize their day-to-day activities through the help of an MSP. The service range includes:

  • Application Management
  • Cloud Data Backup
  • Disaster Recovery
  • Email Support and Access
  • Network Setup and Maintenance
  • Security of Data
  • Technical Support

Types of Managed Service Providers

Pure Play MSPs

These are smaller MSPs that focus on monitoring application performance and networks. These vendors offer native services that rely heavily on reporting and alerts.

Staffing Legacy MSPs

These MSPs serve mid-level businesses and Fortune 500 companies. They offer a rather wide range of services that include

  • System Monitoring
  • Reporting
  • Software Installation
  • Software Updates

High-Level MSPs

High-level MSPs offer the most services and are dedicated to large enterprise-level clients. These MSPs often consist of various small and large providers.

There are more categories of MSPs based on the services they offer. Some of these are:

  • Centralized Management: They provide a management console for complex networks, remote monitoring, patch management, and security software.
  • Monitoring: They offer real-time monitoring for applications, network devices, servers, or websites.
  • Proactive Support: They perform preventative maintenance to ensure possible issues don’t arise in the future.
  • Remote Support: They offer cloud-based software, support for remote devices, and troubleshooting possible issues remotely.
  • Scheduled Maintenance: They offer scheduled network maintenance.
  • Simplified Billing: They handle budgeting, invoicing, and payment through a billing management system.

Benefits of MSP

An MSP offers many benefits by handling different core operations of the client organization. A few honorable mentions include:

  • Help With Staff Shortages: An organization can easily outsource one or more of its tasks to an MSP to fill the gap of in-house employees.
  • Access To Additional Expertise: Partnering with a well-reputed MSP can offer the client organization additional expertise and business insight.
  • Enables Business Continuity: The MSP’s obligations are recorded within an SLA that dictates that an MSP should help the client business to prepare for or recover from a disaster with necessary backups and security, ensuring business continuity.
  • Constant Network Monitoring: MSPs offer network monitoring services around the clock, enabling complete system visibility and cloud management.
  • Better Security: Most of the current MSPs offer additional security measures with awareness training, increasing the overall security of the client company.
  • Improved Cost-Efficiency: Though most MSPs focus on day-to-day management services, clients can also pay for each issue the MSP addresses.

Challenges of Working With MSPs

While working with MSPs seems lucrative, it’s not all sunshine and rainbows. Here are a few challenges you might face when working with an MSP.

  • Not all MSPs offer security measures, so your company data might be at high risk. 
  • Your business operations become highly dependent on third-party organizations.
  • Your business processes get delayed while the MSP responds to an issue.
  • An MSP might try and succeed in upselling features or services that don’t match your business requirements.
  • If an MSP is using a proprietary tool, all information regarding the client organization may not be visible, and it can hamper the management operations of the MSP.

Types of Pricing Models For MSPs

There are six main pricing models for MSPs. These are:

  • Per-Device Pricing: This model charges for each device that the MSP manages.
  • Per-User Pricing: This model charges a flat fee for each user and is best suited for users who utilize multiple devices.
  • All-Inclusive Pricing: Also known as the “All-You-Can-Eat model,” this model charges for managing all IT infrastructure and management services simultaneously.
  • Tiered Pricing: A company can choose one or a different bundle whose services fit their current business requirements.
  • Monitoring-Only Pricing: The MSP only offers monitoring and alerting services for the client’s IT infrastructure for a fixed fee.
  • Ad Hoc Pricing: This pricing model is strictly reserved for scenarios where the in-house developers don’t have enough skills or resources for objective completion.

Qualities You Should Look For In A Managed Service Provider

1. Growth of IT As A Service

The best MSPs are the ones who focus on growing your entire IT department for increased efficiency. They utilize data insights to offer strategic advice and streamline data collection to reach a broader audience.

2. High-End Automation

MSPs that utilize automation are a league above everybody else since they’re streamlining repetitive operations and allowing their team members to focus on different management tasks to increase efficiency.

It’s also ethical to partner with MSPs that leverage automation since those performing their services manually are overworked and overwhelmed.

3. The Expertise of The Technicians

Large-scale MSPs recruit technicians who are equipped with specialized skills. They can optimize their performance to offer better services to their clients, so your goal should always be to work with larger MSPs who can provide the right kind of support for your business.

4. Performance Track Record

The best MSPs always showcase their certifications, testimonials, and past experiences on their official website as proof of their claim of expertise. These showcases also promote complete transparency. Always partner with an MSP with the proper proof to support their claims.

To Wrap It All Up

Managed Service Providers can help any business to streamline their processes by taking off most of the workload so the internal team can focus on core business functionalities, similar to software outsourcing.


What Is the Process for Transitioning to an MSP From an In-House IT Team?

The transition involves assessment, planning, and gradually transferring responsibilities to the MSP.

Do Msps Offer Service-Level Reporting and Performance Metrics?

MSPs provide regular reports on service performance, system health, and security.

Can Businesses Scale MSP Services Up or Down as Needed?

Yes, businesses can adjust the level of MSP services to align with changing needs and budgets.

Are There Any Risks Associated With Outsourcing It to an MSP?

Risks can include data security breaches and service disruptions, which can be mitigated with proper vetting.

What Should Businesses Consider When Terminating an MSP Contract?

Businesses should ensure a smooth transition plan and the return of all data and access upon contract termination.