What is a Managed Service Provider (And Why Do You Need One)?


Information technology is as tied up with business now as inventory and marketing.

A successful business needs a website, which means you need hosting or your own server. If you opt for your own server, you must select the server, pick an operating system and program it.

That's to say nothing of your in-house network, local software configuration, or workstation setup for shared cloud apps. Let's not forget about maintaining a virtual private network for any salespeople out in the field.

You don't want them promising rapid delivery of inventory that's not on hand.

Managing all of that technology is such a big job that many businesses look for a simpler solution and discover a managed service provider. What exactly is a managed service provider and why would you want one?

Keep reading and find out.

What is a Managed Service Provider?

In a nutshell, a managed service provider functions as an outsourced IT department. They monitor and manage some or all of your IT systems.

For example, they might make sure your critical data gets backed up every day at a certain time. Data backups, while not difficult, often get forgotten in the wake of more pressing concerns. The MSP acts as part of your disaster recovery plan.

The most visible element of an MSP is tech support. They help you by remotely accessing your systems or talking with you over the phone. Most MSPs also offer on-site support for those times when you need a person in the room to make the fixes.

What Do MSPs Offer?

MSPs offer services based on the specializations of their in-house staff. That means that service offerings somewhat from company to company. Still, some essentials that most provide include:

  • tech support
  • server virtualization
  • network admin
  • data security

An MSP might also offer any number of a la carte or one-time services.

For example, let's say you bought an expensive piece of software for inventory management. Then, you find out that it can't talk to the rest of your software.

Some MSPs help companies with software integration. They'll write a small program that lets the inventory management software talk to your other software.

A managed service provider could also offer IT Strategy and Planning. In essence, they help you decide what hardware, software, and cloud computing will best support your business over time.

How Do They Work?

MSPs typically operate on a subscription model, though the exact structure varies from company to company.

Smaller businesses and startups might opt for a company that provides a per-user or per-device subscription. These subscriptions work best for a company founder or a company that just needs one server managed.

Larger small businesses or medium-sized businesses might opt for an all-in-one package. Theses subscriptions typically bundle all of an MSP's available services and apply them across all devices and users.

An MSP might even offer several variations on their all-in-one bundle. For example, they might offer a less expensive version to businesses with a small number of users or devices.

Most MSPs use service level agreements for their bundled service packages. An SLA is a contract that lays out the details of what the MSP provides the customer.

The agreement might impose limits on the number of on-site service calls the MSP will make. It will also define what qualifies as adequate service.

Say that you turn over network management and security to an MSP. If you suffer a data breach or extended period of network downtime, those might qualify as violations of SLA.

The SLA should also detail what you get if the MSP doesn't hold up their side of the agreement. For example, you might get a discount for a small infraction or get to end the contract for large failures.

Why Do You Need an MSP?

Entrepreneurs and small business owners must juggle many tasks. Depending on the size of your company, you might end up answering phones, managing HR, doing the books, and taking meetings.

That's a lot of work on one person's plate. Even worse, multitasking or constant task switching prevents you from working at your best. Nothing ever gets your undivided attention.

Then there's the issue of IT. Information technology is a sufficiently complex field that people specialize. Some of the specializations include:

  • system administration
  • analytics
  • network security
  • management information systems
  • cloud computing

That's before you get into closely related areas like app development and web design. IT professionals can't realistically master and stay up-to-date on all of these areas. That doesn't bode well for the time-starved business owner.

Even if you and some tech-savvy employees keep your IT systems up and running, what happens if you experience rapid growth? Your IT demands will swell and get more complicated.

Using a managed service provider gets you several key advantages.

Most MSPs take a proactive approach, which means they're looking for solutions to problems you haven't noticed yet. Most business owners find solving their current problems hard enough.

You spend your time on your business and not trying to learn everything about IT. The MSP employs experts in the service areas they offer. That means that you get the benefits of all that expertise without hiring an entire IT staff.

That's assuming that you could afford an entire IT staff. The average salary for a network/system security expert is around $95,000/year. That's just for the person who protects your network.

If you want someone who can build and maintain the infrastructure of your network, they earn around $105,000/year. You're already down $200,000 a year in base salary just to build and protect your network. Add another 2-3 IT pros at similar salaries and throw in perks and benefits.

It's not sustainable.

Parting Thoughts

A managed service provider fulfills the role of an IT department, but typically at a lower cost. Given the salaries of IT professionals, that's no surprise.

What an MSP does is hire experts in IT specializations and then spread those skills out across several clients. For the most part, they can handle your IT woes quickly and remotely. A tech makes a service call for more complex problems.

Some MSPs also offer one-time services that complement their subscription services, such as IT planning.

In essence, you get most of the benefits of a well-staffed IT department at a saner price point.

Advantage Services is an MSP that offers managed IT services and IT consulting. To learn more about our offerings, please contact us today.

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