Managed services

Managed services is the practice of outsourcing on a proactive basis management responsibilities and functions and a strategic method for improving operations and cutting expenses.^[1][2] It appears as an alternative to the break/fix or on-demand outsourcing model where the service provider performs on-demand services and bills the customer only for the work done.^[3][4]

Under this subscription model, the client or customer is the entity that owns or has direct oversight of the organization or system being managed whereas the managed services provider (MSP) is the service provider delivering the managed services. The client and the MSP are bound by a contractual, service-level agreement that states the performance and quality metrics of their relationship.^[5]

Advantages and challenges

Adopting managed services is known to be an efficient way to stay up to date on technology, have access to necessary skills and address a range of issues related to cost, quality of service and risk.^[6][7][8] As the IT infrastructure components of many SMB and large corporations are migrating to the cloud,^[9] many MSPs (managed services providers) increasingly facing the challenge of cloud computing, a number of MSPs are providing in-house cloud services or acting as brokers with cloud services providers.^[10][11] A recent survey claims that a lack of knowledge and expertise in cloud computing rather than offerors' reluctance, appears to be the main obstacle to this transition.^[12][13] For example, in transportation, many companies are facing significant increase of fuel and carrier costs, driver shortages, customer service requests and global supply chain complexities. In addition, managing day-to-day transportation processes and reducing related costs come as significant burdens that require the expertise of transportation managed services (or managed transportation services) providers.^[14][15]

History and evolution

The evolution of MSP started around the 1990s with the emergence of application service providers (ASPs) who helped pave the way for remote support for IT infrastructure. From the initial focus of remote monitoring and management of servers and networks, the scope of an MSP's services expanded to include mobile device management, managed security, remote firewall administration and security-as-a-service, and managed print services. Around 2005, Karl W. Palachuk, Amy Luby (Founder of Managed Service Provider Services Network acquired by High Street Technology Ventures), and Erick Simpson (Managed Services Provider University) were the first advocates and the pioneers of the managed services business model.^[16][17]

The first books on the topic of managed services: Service Agreements for SMB Consultants: A Quick-Start Guide to Managed Services^[18] and The Guide to a Successful Managed Services Practice^[19] were published in 2006 by Palachuk and Simpson, respectively. Since then, the managed services business model has gained ground among enterprise level companies. As the value-added reseller (VAR) community evolved to higher level of services, it adapted the managed service model and tailored it to SMB companies.

In the new economy, IT manufacturers are currently moving away from a "box-shifting" resale to a more customized, managed service offering. In this transition, the billing and sales processes of intangible managed services, appear as the main challenges for traditional resellers.

Common managed services

In the information technology area, the most common managed services appear to evolve around connectivity and bandwidth, network monitoring, security,^[20] virtualization, and disaster recovery.^[7] Beyond traditional application and infrastructure management, managed services may also include storage, desktop and communications, mobility, help desk and technical support. In general, common managed services^[21] include the following applications.

Managed services provider

Definition

A managed services provider (MSP) is most often an information technology (IT) services provider that manages and assumes responsibility for providing a defined set of services to its clients either proactively or as the MSP (not the client) determines that services are needed.^[26][27] Most MSPs bill an upfront setup or transition fee and an ongoing flat or near-fixed monthly fee, which benefits clients by providing them with predictable IT support costs. Sometimes, MSPs act as facilitators who manage and procure staffing services on behalf of the client. In such context, they use an online application called vendor management system (VMS) for transparency and efficiency.

The managed services model has been useful in the private sector, notably among Fortune 500 companies,^[28] and has an interesting future in government.^[29]

See also

• Managed service company
• Application service provider
• Digital solutions provider (DSP)
• Customer service
• Enterprise architecture
• Service (economics)
• Service provider
• Service science, management and engineering
• Information technology outsourcing
• Technical support
• Web service
• Remote monitoring and management

References

Further reading

• Palachuk, Karl (16 September 2014). The Managed Services Operations Manual: Standard Operating Procedures for Computer Consultants and Managed Service Providers – a Four-Volume Set. Great Little Book Publishing Co., Inc. ISBN 978-0990592310. 
• Managed Services in a Month, 2nd edition. Great Little Book Publishing Co., Inc. 2013.
• The Guide to a Successful Managed Services Practice, January 2013. Intelligent Enterprise.
• Palachuk, Karl (1 July 2006). Service Agreements for SMB Consultants. Great Little Book Publishing Co. ISBN 978-0976376026.