Managed service provider
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A managed service provider (MSP), is a company that receives income from services, typically on a monthly basis.[citation needed]
Recently, a managed service provider is a company that manages information technology (IT) services for other companies via the Internet. An MSP is a "company that offers continuous outsourcing of an IT function -- it works on a recurring revenue model; it monitors and fixes things proactively; and it does all this over the Internet, rather than having to work hands-on at a client's office."[1]
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 developed as the traditional computer value-added reseller (VAR) model continually provided lower profit margins.[citation needed] Lower margins on hardware and software reselling, competition from direct personal computer vendors, 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 MSPs 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 peace 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).[citation needed] 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 MSPs to outsource all of their IT needs as these vendors offer enterprise platforms for use with in-house IT staff.[citation needed] Enterprise model offers more value for the IT staff to remain on-site.[citation needed]
While vendors provide the software, managed service providers use 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.[citation needed] Remote technology is also rapidly moving forward by leaps and bounds. Remote tools allow these MSPs 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 MSPs 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 MSPs is the change from a break-fix business to a managed service model. This need has created another type of MSP referred to as the Master Managed Service Provider, these MSPs sell their services to new MSPs or value-added resellers allowing them to slowly transition to an MSP model while still enjoying revenue from a time and materials billing model.
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[edit] Customer & Service Provider (SP) Managed Services Benefits
Key customer benefits:
- Customer peace of mind – monitor network on 7x24 basis proactively
- Single point of contact for carriage and all network CPE issues & single supplier instead of multiple vendors
- SLAs for service delivery
- Known costs for management & fixed price contracts
- Avoid costs of building own management & reporting systems
- Lower TCO – reduced costs for specialised IT staff
Key SP benefits:
- Business contracts – extended longevity (in line with CPE life spans)
- Increased ‘stickiness’ & ARPU (average revenue per user) of core communications products by applying service bundling strategies
- Ability to interact with & influence customers at a business/application decision making level
- Protect vital carriage revenue by de-commoditising & value adding
[edit] 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)
