Managed service provider

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A managed service provider (MSP), also called a management service provider, is a company that manages information technology services for other companies via the Internet.

Common services provided by MSPs include remote network, desktop and security monitoring, patch management and remote data back-up, as well as technical assistance. Most MSPs provide these services on a monthly basis.

The business model behind managed services was developed as the traditional computer value-added reseller (VAR) model continually provided lower profit margins. Lower margins on hardware/software reselling, competition from direct PC vendors (such as Dell, Inc.), as well as the unpredictable revenues from a reactive, break-fix method of technical support lead to the need for a new model.

Managed service providers sell managed services and offer several different price structures. Most commonly used is a per-month fee, but MSP's can also charge a time and material model as well as price per desktop, server, or network device. They promise to monitor their client's IT infrastructure and resolve any issues that arise within it. This provides ease of mind for the client, as well as predictable recurring revenues for the MSP. Managed services give small business and medium sized businesses an option to have their IT needs taken care of instead of paying an on-site staff.

Most MSPs outsource the technology used to deliver managed services for companies known as Managed Services Software Providers (MSSP). While the platform is provided by vendors, a managed service provider is a company who utilizes these platforms to provide IT Services to end-users in the small business and medium-sized market sector. Many larger enterprise-sized companies use MSP's like HP or IBM to outsource all of their IT needs as these vendors offer enterprise platforms for use with in-house IT staff. Enterprise model offers more value for the IT staff to remain on-site.

While vendors provide the software, managed service providers (MSP's) utilize the software to manage businesses computing needs. This market is rapidly growing and will continue to grow as costs to keep IT in-house rise. Remote technology is also rapidly moving forward by leaps and bounds. Remote tools allow these MSP's to virtually control the companies entire network operations off-site without ever having to step foot into the company. There are drawbacks and limitations that MSP's face, as there is still a need for On-site repair; such as hardware, and break-fix work. One of the major challenges facing would be MSP's is the change from a break-fix business to a managed service model.