April 8, 2024

What is a managed service provider (MSP)?

A managed service provider (MSP) is a company that offers remote support for IT infrastructure and end-user systems, usually providing these services proactively and on a subscription basis. Managed service providers have a broad portfolio of offerings, including network, application, infrastructure, and security management, as well as support for mobile devices, help desk solutions, and cloud services. 

By outsourcing IT support and management to a managed service provider, organizations can focus on their core operations without the expense of an internal IT team.

Organizations that outsource to a managed service provider also see improved efficiency as well as access to the latest technology and expert skills. Managed service providers’ proactive approach to IT management allows them to identify and address IT issues before they can impact an organization’s operations, ensuring business continuity and optimized IT performance. 

Typical MSP coverage areas

Managed service providers deliver a wide array of services and technology that can be customized to meet clients’ unique requirements. These services range from basic network management to complete outsourced IT departments.

The coverage areas of managed service providers include comprehensive support for the technological and operational requirements of organizations, which can vary depending on the provider, but common services include the following. 

Cloud services

  • Assist organizations in transitioning their operations to cloud environments. 
  • Manage cloud infrastructure and applications, including cloud storage, computing resources, and software-as-a-service (SaaS) applications. 
  • Optimize cloud resources and services. 
  • Provide cloud-based data backup solutions and disaster recovery planning
  • Support hybrid, public, and private cloud environments. 

Communication and collaboration tools

  • Implement and manage voice over internet protocol (VoIP) solutions for business communications. 
  • Manage collaboration platforms for file sharing and team collaboration. 
  • Support communication tools like email and instant messaging services and ensure their security and reliability. 

Compliance and risk management

  • Assess and manage IT risks. 
  • Ensure IT practices adhere to relevant regulations and standards. 
  • Help organizations meet and maintain audit trails for specific industry regulations (e.g., data protection and data privacy laws) related to IT and cybersecurity

Consulting and advisory services

  • Advise organizations on technology investments, digital transformation, and IT compliance. 
  • Develop a disaster recovery plan that outlines how data will be restored in the event of various scenarios, ensuring minimal downtime. 
  • Help organizations understand their data protection needs, implement effective solutions, and provide expert advice and support for data backup and recovery strategies. 
  • Provide strategic IT consulting to align technology strategies with an organization’s objectives. 

Cybersecurity services

  • Conduct routine security evaluations to detect and mitigate potential security threats
  • Deploy and manage security tools, such as firewalls, antivirus software, endpoint protection systems, and intrusion detection systems. 
  • Ensure optimal network performance and security. 
  • Manage real-time monitoring for threats and vulnerabilities. 

Data backup and recovery

  • Develop and maintain long-term storage solutions for data that must be retained for regulatory compliance, historical records, or other purposes. 
  • Evaluate backup and recovery procedures regularly to ensure efficient data restoration and oversee backups to quickly identify and address any issues. 
  • Offer real-time or near-real-time automated data backup, which captures every version of a data entity whenever any change is made.  
  • Set up encrypted storage solutions to protect backed-up data from unauthorized access, theft, or corruption. 

Network and infrastructure management

  • Check core network components, such as routers, firewalls, and switches. 
  • Maintain, monitor, and manage physical and virtual servers. 
  • Oversee network monitoring and management of the network’s health, performance, and security. 

Software and endpoint management

  • Implement policies for device usage and access control
  • Maintain and update applications, including software licenses, updates, and patches. 
  • Manage subscriptions and usage of SaaS (software as a service) products. 
  • Procure, maintain, and secure endpoints like desktops, laptops, and mobile devices. 

Support and helpdesk services

  • Offer end-user support for software, hardware, and networking issues, as well as technical assistance and troubleshooting for IT systems and infrastructure. 
  • Provide remote troubleshooting and assistance. 

How managed service providers work

Managed service providers operate by taking on the responsibility of managing a company’s IT infrastructure and/or end-user systems, typically under a subscription model. The following is a quick overview of how they work. 

1. Assessment 
A managed service provider starts by assessing the current IT environment of their client to understand the infrastructure, applications, and services in place. This helps them determine what areas are working as is and what areas require improvement to address potential security risks and leverage opportunities for optimization. 

2. Service agreement 
Based on the assessment, the managed service provider proposes a service agreement that details the proposed scope of services, performance metrics, response times, and costs. This agreement is tailored to meet the unique requirements of the client and ensure that all aspects of their IT management are covered. 

3. Implementation 
Once the service agreement is in place, the managed service provider implements the necessary tools, technologies, and processes to manage the client’s IT environment remotely. This often includes installing remote monitoring and management (RMM) software, deploying additional security solutions, and setting up backup and recovery systems. 

4. Proactive management 
Managed service providers proactively manage their client’s IT infrastructure to detect issues before they become problems. This includes regular monitoring systems, performing security checks, updating software, and optimizing performance. By identifying and resolving potential problems early, managed service providers help eliminate and mitigate security threats, minimize downtime, and maintain operational efficiency. 

5. Support and maintenance 
Managed service providers provide ongoing support and maintenance services, including troubleshooting, technical support, and consulting. Clients typically have access to a help desk or support team to resolve IT-related issues. 

6. Reporting and review 
Managed service providers regularly report on their activities and performance against agreed-upon metrics and any recommendations for improvements. This ensures transparency and allows for adjustments to the services provided as clients’ needs evolve. 

Strategic planning

Beyond day-to-day management, managed service providers also offer strategic planning services to help clients align their IT infrastructure with their organization’s strategic objectives. This includes advising on technology investments, IT budget planning, and long-term IT strategy development.   

Benefits of using a managed service provider

Access to a range of IT expertise

Managed service providers employ specialists with a wide range of IT expertise across their coverage areas. Working with a managed service provider gives organizations access to these specialized experts as needed. 

Business continuity

If an organization agrees, managed service providers can set up extensive disaster recovery and backup strategies to guarantee operational continuity in the face of an IT crisis. This reduces data loss and operational downtime and helps meet regulatory requirements for data protection.

 Cost efficiency

Using managed service providers allows organizations to improve their IT budget management.  

Outsourcing IT services turns fixed IT expenses into variable costs, offering organizations greater budget flexibility and predictability.

This method eliminates substantial capital expense for IT infrastructure and cuts down on the labor expenses tied to recruiting, training, and managing IT personnel. 

Cutting-edge technology

Managed service providers regularly update their technology and services to maintain their competitive edge. Organizations that work with a managed service provider gain access to the latest IT advancements without having to make direct investments in new technologies. 

Enhanced security and compliance

Managed service providers help businesses comply with regulations and standards by implementing security measures, ensuring data protection, conducting regular audits, and providing documentation for compliance reporting. 

Focus on the organization’s core functions

Delegating IT management to a managed service provider helps organizations focus on their primary activities and strategic goals, avoiding the distractions and complexities of IT-related decisions and operations. 

Global support

For organizations that have international operations or want to expand globally, managed service providers offer unified processes and centralized account management that streamline IT operations and ensure full compliance with international regulations. 

Improved technology utilization

Managed service providers ensure that organizations make the most of their technology investments by optimizing and managing IT resources. They can guide technology strategy, implement new technologies, and ensure that existing systems are fully utilized or decommissioned. 

Proactive management

Managed service providers take a proactive stance in managing and monitoring IT systems. This allows them to identify and rectify potential issues before they disrupt operations rather than respond to problems after they occur. This proactive management greatly decreases the likelihood of IT failures and downtime. 

Rapid response time with 24/7 support

Most managed service providers offer round-the-clock monitoring and support, ensuring that any IT issues are addressed promptly, regardless of the time of day. This continuous support is vital for minimizing downtime and ensuring that IT systems are always running smoothly. 

Risk management

By staying on top of the latest cybersecurity threats, regulatory requirements, and technology trends, managed service providers help organizations mitigate risks associated with IT systems. This includes managing the risk of downtime, data breaches, technology obsolescence, and compliance violations. 


Managed service providers’ IT services and infrastructure can be easily scaled based on an organization’s needs. This provides the flexibility to expand or contract different resources as required. 

How to find a managed service provider

Step one

  • Determine IT needs. 
  • Identify specific IT services.  
  • Set goals (e.g., improving IT infrastructure, enhancing security, or reducing IT costs). 
  • Establish service performance metrics. 

Step two: Evaluate managed service providers

Considerations for assessing managed service providers are: 

  • Ask about security and compliance standards—verify that the provider can help the organization comply with applicable laws and standards.  
  • Assess scalability—flexibility in scaling up or down based on changing needs.  
  • Check for comprehensive services and expertise—those needed at the outset and potential future needs. 
  • Confirm service level agreements (SLAs)—review SLAs to understand the guaranteed response times, uptime, and resolution processes.  
  • Consider the pricing model—how services are charged (e.g., flat monthly fee, per user, per device) and what is included or considered an extra cost.  
  • Evaluate partnerships—look for strong relationships with leading software and hardware vendors. 
  • Inquire about disaster recovery and security—security measures and disaster recovery plans. 
  • Research the MSP’s reputation—look for reviews, testimonials, and case studies that demonstrate their effectiveness and customer satisfaction levels. 
  • Review the MSP’s technology stack—assess whether they employ the latest technologies and how they integrate with existing internal systems.   
  • Seek recommendations—consult with industry peers and other organizations.  
  • Understand communication processes—processes for addressing issues and their availability for support.  

Step three: Managed service provider engagement

  • Arrange for a detailed consultation with the managed service provider to discuss the organization’s needs, the provider’s services, and how they can help achieve strategic objectives and meet tactical requirements. 
  • Develop a list of questions to find out more about processes, communication styles, and how the MSP handles challenges or emergencies. 
  • Discuss budgeting and costs to clearly understand how the managed service provider would structure fees for your organization’s requirements. Ask about any potential additional costs and how they can help plan the IT budget effectively. A managed service provider that helps to optimize costs without compromising services and technology quality is ideal. 
  • Work with internal teams to get the managed service provider set up and integrated into relevant workflows. 
  • Assess the managed service provider’s performance on a regular basis and adjust optimize service delivery. 

Is a managed service provider right for your business?

Deciding whether a managed service provider is right for your business involves evaluating your current and future IT needs, resources, and strategic goals. The level of IT expertise available within your organization is the first consideration.  

If your organization lacks specialized skills or struggles to keep up with technological advancements, a managed service provider can fill those gaps.

The second consideration is cost. Evaluate potential cost savings from outsourcing to a managed service provider, including reductions in hiring, training, and maintaining in-house IT staff, and capital expenditures on hardware and software. Include all upfront fees and ongoing monthly costs.

A reflection on service requirements can also help determine if a managed service provider is the right choice. If the organization needs round-the-clock IT support, taking advantage of a managed service provider’s ability to offer 24/7 monitoring and response services may tip the scales.

Ultimately, if outsourcing IT management can improve operational efficiency, reduce costs, enhance security, and allow internal teams to concentrate on strategic initiatives, partnering with a managed service provider could be the right choice. The final decision should come down to an evaluation of the benefits and the costs, as well as if a managed service provider’s services align with goals and tactical requirements. 


Frequently asked questions about managed service providers include the following.  

Do managed service providers help save costs?

Under the right circumstances, managed service providers help save costs by offering predictable cost control, reducing IT risks and issues, and minimizing hardware expenses. Their proactive approach also helps prevent costly downtime and cybersecurity incidents, which also contributes to cost savings. 

What functions can an MSP perform?

The following are several of the key offerings provided by managed service providers. 

  • Cloud services 
  • Compliance and risk management  
  • Consulting and advisory services  
  • Helpdesk services 
  • IT infrastructure management 
  • IT support and maintenance  
  • Network and application management 
  • Security services, including identity security 

What is the difference between an MSP and outsourcing? 

Managed service providers offer a long-term, proactive approach to managing a company’s IT infrastructure, focusing on ongoing support, maintenance, and strategic planning. Services are typically delivered under a fixed pricing model.

Outsourcing, in contrast, is typically project-based or task-specific, involving hiring external vendors for particular jobs on a more transactional basis. Generally, outsourcing is more reactive, with variable costs, and is used to access specialized skills for short-term needs or specific projects. 

Managed service providers as IT partners

The right managed service provider becomes an organization’s IT partner. The MSP becomes an integral part of an organization, providing strategic and tactical support. Those who pursue a managed service provider partnership for IT management often see benefits cascade across many aspects of the organization. 

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