What is a managed service provider, or MSP?

The simplest short definition of MSP is that an MSP provides outsourced IT solutions.

The types of IT solutions that MSPs offer can vary widely. Not all MSPs offer the same list of solutions, and there are no specific solutions that you must provide in order to qualify as an MSP.

That said, some common IT solutions that MSPs address include:

  • General IT support services (for fixing hardware and software issues when something goes wrong).
  • Data backup and disaster recovery.
  • Networking infrastructure setup and management.
  • Managed communications, which means providing services like email, telephone networks, and so on.
  • Cybersecurity, or Security-as-a-Service.
  • Auditing and compliance (for instance, HIPAA or ITAR compliance).
  • Data analysis and reporting.
  • Cloud computing setup and management.

    The Many Names of MSP

    MSPs have several different ways to describe themselves, including:

    MSP - managed services providers
    Managed IT providers
    IT consultants
    IT shops

    What Does an MSP Do?

    An important part of what defines an MSP is that MSPs offer the solutions described above in the form of “managed services” (hence the term Managed Service Provider).

    A managed service is a solution that is provided on an ongoing basis, with the MSP taking full responsibility for delivering whichever outcomes are guaranteed as part of the managed service.

    For example, an MSP who delivers backup as a managed service would take full responsibility for planning and executing a business’s backup needs on an ongoing basis. Likewise, an MSP who offers Security-as-a-Service would fully manage and monitor a client’s cybersecurity needs.

    The value of managed services is that they provide clients with completely hands-off, outsourced IT solutions. In most cases, all a client needs to do to consume a certain managed service is to sign a contract with an MSP who provides it. There is no need on the client’s part to purchase, set up, or manage hardware or software.

    A second key benefit of the managed services that MSPs provide is that they are offered on an ongoing basis. In this respect, managed services are often compared to what is known as a break-fix model, where companies seek outsourced IT help only when something goes wrong. Under a managed service model, an MSP is always providing a service, rather than simply responding when something fails.

    Why Do I Need an MSP?

    The fast-growing MSP market caters first and foremost to the needs of small and medium businesses, or SMBs, which are typically defined as businesses with fewer than 1,000 employees. These types of companies are typically too small to be able to maintain internal IT departments in a cost-efficient way. Or, they may be large enough to employ one or two full-time IT staff, but lack the capacity to run a complete IT team that is large enough, and diverse enough in its skill sets, to support all of the company’s IT needs.

    Instead of trying to meet IT needs in-house, SMBs can outsource to MSPs. MSPs can also provide value by offering guidance about IT management and growth plans to business owners who lack backgrounds in technology.

    Enterprise MSPs

    Although SMBs are the most common users of MSP services, there are situations where large enterprises work with MSPs, too. An MSP may be able to provide a certain type of expertise that an enterprise’s in-house IT team lacks, for instance, or they can help supplement a company’s internal IT resources at times when the company’s IT infrastructure or needs are growing too fast for its own employees to manage on their own.

    The Industries MSPs Work With

    MSPs operate across a wide array of industries, ranging from manufacturing and distribution to healthcare, education, and beyond. People sometimes assume that MSPs only provide support to companies within the IT industry, but that is not true. Today, virtually every company requires IT services, no matter which type of work it does, and MSPs help fill that need.

    Benefits of Using Managed IT Services

    By providing outsourced IT solutions via a managed services model, MSPs offer a range of benefits to companies of all types:

  • IT cost savings since MSPs can typically deliver IT services at a lower cost than companies could achieve through an in-house approach.
  • Freeing up a company’s internal resources for tasks other than IT management.
  • Delivering cutting-edge cybersecurity expertise, which can be hard to achieve through an in-house solution (since cybersecurity experts are hard to find, and command premium salaries if they work for a company full-time).
  • Guidance on the latest regulatory requirements (for MSPs who provide compliance services).
  • 24/7 support services (if these are guaranteed as part of the managed service contract).
  • Clear definition of IT management tasks and responsibilities via service contracts.
  • MSPs can help address in-house IT staff shortages.
  • MSPs can provide data recovery services quickly following a disaster, even if a company’s internal team is in disarray and not prepared to react speedily.
  • MSPs provide scalability options for adding extra IT resources incrementally or temporarily, depending on a company’s needs.
  • The problem of companies competing for scarce IT experts is reduced. MSPs allow IT expertise to be shared with multiple clients at once.
  • Companies based in high-cost areas can work remotely with MSPs who are located in lower-cost regions, and therefore offer lower prices.
  • Companies based in regions without a large number of qualified IT workers can work with MSPs remotely to meet their IT needs despite local workforce limitations.
  • An MSP can replace a company’s IT department entirely, or provide a single niche service.