What is a Managed Service Provider (MSP)?

Definition of a Managed Service Provider (MSP)

At its core, a Managed Service Provider (MSP) is an outsourced IT company that delivers a specific set of services to clients either proactively or based on specific project needs. It is a strategic approach that involves outsourcing daily management, security, compliance, and support tasks, aiming to enhance operations and reduce costs.

Managed Services Providers typically offer a variety of services and service levels that make them an attractive option for SMEs that do not have an extensive IT department or have limited IT resources. From remote monitoring and management of servers and networks to the deployment of security systems and applications, MSPs can provide comprehensive IT support that keeps businesses secure and running efficiently.

Related Article: What Does An IT-Managed Services Company Do?

Key Factors for Choosing the Right Provider

Within the Managed Service Provider (MSP) community, there are many different types of providers that offer significantly differing levels of service. When evaluating whether an MSP is suitable for your business, consider four key characteristics:

1. Maturity of the provider
2. The size of their clients' businesses
3. The share of responsibilities
4. The range of services
   
   

High Maturity vs. Low Maturity Providers

In a field like accounting, there are differences between the services of a bookkeeper and a CPA. The same is true with Managed Service Providers. Yet, it can be challenging for potential clients to distinguish between "low maturity" and "high maturity" providers - but it’s a crucial distinction. Depending on your specific requirements, either type of provider could potentially suit your needs.

Low-maturity providers may conduct basic preventative maintenance tasks, but their primary focus lies in promptly addressing issues as they arise. They typically employ only basic measures for monitoring and securing an environment. During consultations, the conversation generally revolves around technical matters and tactical recommendations for things like hardware upgrades.

On the other hand, high-maturity providers also exhibit quick response times, yet they place a stronger emphasis on proactively preventing issues altogether. They meticulously align your technology with industry best practices for security, performance, reliability, and compliance. Acting more as a strategic business partner, they assist in aligning IT capabilities with your business objectives, fostering a more cohesive relationship.

Low maturity providers, while competent in handling immediate problems and basic maintenance, often fall short in providing long-term strategic insights. Understanding these differences helps businesses select an MSP that matches their specific needs and growth aspirations.

Target Audience's Size of Business

The IT management needs of a small business in an unregulated environment, vary greatly from a large business operating in a heavily regulated industry. Managed Service Providers often tailor their service offerings based on the size and focus of their target audience. It’s important to understand where your perspective MSP serves best. 

Does the MSP have a proven track record of successful outcomes with other companies like yours? Have they worked with companies of your size? Do they have experience in your industry? Can they tailored their services to fit your unique needs?

Smaller businesses might benefit from basic IT support and cost-effective solutions, whereas medium to large enterprises may require comprehensive IT infrastructure management, enhanced security measures, and bespoke technology consulting. MSPs adjust their offerings to fit the unique needs and budget constraints of different business sizes, ensuring each client receives an appropriate level of service and support.

No matter your company’s size, EpiOn provides co-managed and fully-managed solutions to help you get Measurably Better IT results. Download our guide: Measurably Better IT to get started.

Share of Responsibilities (Co-Managed vs. Fully Managed IT Services)

MSPs can operate either under a co-managed or fully managed IT services model, depending on the client's needs and existing IT capabilities. In a co-managed scenario, the MSP collaborates with your in-house IT team, supplementing their efforts and providing specialized expertise where needed. Fully managed services, on the other hand, imply that the MSP takes full responsibility for the client's IT environment, enabling the business to focus entirely on its core activities without worrying about IT operations. (Read More: Internal vs Co-Managed IT: Which is Best for My Business?)

Service Offerings

The range of service offerings can vary widely among MSPs, catering to diverse business requirements. Common services include remote monitoring and management (RMM), cybersecurity solutions, cloud services, data backup and recovery, and IT consulting. Some MSPs also offer specialized services like unified communications, regulatory compliance support, and custom software development. By evaluating the service offerings, businesses can choose an MSP that provides the precise tools and support necessary for their success.

How Much Does Managed IT Cost?

Common MSP Pricing Models

Managed Service Providers (MSPs) operate under a range of business models to cater to the diverse needs of their clients. Understanding these models can help businesses choose the right MSP for their specific requirements. The most common MSP business models include:

1. Break-Fix Model

In the Break-Fix model, MSPs only provide services when there is a problem. Clients pay for each service or repair individually. This model is reactive (meaning that the MSP takes no action until you call them) and often results in higher costs over time. Businesses may face significant downtime while waiting for issues to be resolved.

2. Monitoring and Maintenance Model

This proactive model involves ongoing monitoring and regular maintenance of IT systems to prevent issues before they occur. MSPs charge a monthly fee for these services, which generally leads to more predictable IT expenses and minimal disruptions.

3. Per-User/Per-Device Model

In this model, MSPs charge based on the number of users or devices within a company. This is a flexible and scalable approach, making it suitable for growing businesses. Costs are easy to predict, but the model requires careful management to ensure users or devices are properly counted.

4. All-You-Can-Eat Model

Under this comprehensive model, clients pay a fixed monthly fee for unlimited IT support. This model provides predictable costs and encourages regular use of the MSP's services, fostering a more proactive approach to IT management.

5. Value-Based Pricing Model

MSPs using this model align their pricing with the value they provide to the client. This approach often involves customized solutions tailored to specific business needs and objectives, resulting in a more strategic partnership.

Related Article: Managed IT Services Pricing Guide for Tennessee Businesses

Benefits of Using an MSP

When considering the benefits of partnering with a Managed Service Provider (MSP), small and medium enterprises (SMEs) find a multitude of advantages. These include significant cybersecurity improvements, cost savings, streamlined operational efficiency, and the invaluable access to cutting-edge technologies that can propel their businesses forward in today's competitive landscape. By leveraging the expertise and resources of an MSP, SMEs can enhance their productivity, security, and overall performance while focusing on their core business objectives.

Related Article: 4 Reasons Managed Services Are Essential for Small Businesses

Cybersecurity

The cyber threat landscape continues to evolve rapidly. Cyber criminals literally want to steal or hold your data hostage so that they can extort a financial ransom from you. Insurance providers say that your increased reliance on IT and the value of your data (at least to you) make this the number one risk to your business operations. MSPs have an entire team of professionals that monitor this threat landscape and adjust your defenses. They make sure that your environment aligns with a framework of cybersecurity best practices. 

Related Article: How Can I Know if Our IT Is Really Secure?

Scalability and Flexibility

Managed Service Providers (MSPs) offer businesses the ability to expand their IT capabilities and services according to their requirements, eliminating the need for extra investments in hardware, software, or personnel. This level of flexibility is particularly crucial for companies facing periods of growth or seasonal variations in their operations, enabling them to adapt swiftly and efficiently to changing demands. By leveraging the comprehensive support provided by MSPs, businesses can ensure seamless scalability and operational agility in the dynamic landscape of today's digital environment.

Expertise and Innovation

An MSP’s team comprises a group of highly specialized professionals who stay updated on the latest technologies and industry best practices. Through sheer repetition and exposure to hundreds of computing environments, they gain more experience than their in-house brethren.  Their in-depth knowledge allows SMEs to tap into cutting-edge expertise without the financial burden of managing an internal IT department. This strategic partnership not only enhances operational efficiency but also ensures seamless integration of advanced tech solutions tailored to meet specific business needs.

How to Find an MSP

Selecting an MSP is a critical decision that should not be taken lightly. There are many providers in the market, each with its own strengths and focus areas. Here are essential steps to finding an MSP that aligns with your business goals:

Assess Your Needs

Before you begin your search, evaluate your current IT situation and define your goals, budget, and expectations. Understanding the specifics of what you need will guide your search and help you narrow down potential MSPs. Consider factors such as:

• Experience in your industry.
• Your cybersecurity needs.
• Expertise in your regulatory environment.
• The strategic importance of IT within your operations.
  
  

Research and Compare

Once you have a clear idea of your IT needs, research MSPs online, review their service offerings, customer testimonials, and case studies. Look for MSPs with experience in your industry and a track record of success.

Three factors that will impact your decision when evaluating MSPs include:

1. Is the MSP outcomes-focused?
2. Do they have a proven process to deliver those outcomes?
3. Is their business healthy, stable, and secure?
   
   

Request Proposals

After you've identified a shortlist of potential MSP partners, reach out to them for a formal proposal. This will give you an opportunity to discuss your needs in more detail and get a better sense of how the MSP approaches client relationships.

Related Article: The Top MSPs in Nashville & The Top MSPs in Knoxville

Industries Served by IT Managed Service Providers

IT Managed Service Providers (MSPs) cater to a wide range of industries, each with unique requirements and challenges. Some of the key sectors benefiting from MSPs include:

Healthcare

According to one survey, 73% of hospitals with over 300 beds outsource IT services and even more hospitals and health systems with less than 300 beds do the same. Practically all medical practices with fewer than 150 employees outsource as well.

The healthcare industry relies heavily on information technology to manage patient records, schedule appointments, and ensure compliance with regulatory standards such as HIPAA. MSPs can provide specialized services tailored to the healthcare sector, including electronic health record (EHR) system management, secure data storage solutions, and robust cybersecurity measures to protect sensitive patient information.

Compliance with requirements such as HIPAA, PCI-DSS, and cyber insurance covenants is central to EpiOn's Measurably Better IT process. Schedule a call to learn more about our medical IT solutions.

Finance

Financial institutions must navigate a complex landscape of regulatory compliance and constantly evolving cybersecurity threats. MSPs support banks, credit unions, and other financial entities by ensuring secure transactions, maintaining compliance with regulations such as Sarbanes-Oxley (SOX), and providing comprehensive monitoring and risk assessment services.

Architecture, Engineering, & Construction

Professionals in the architecture, engineering, and construction (AEC) sector face unique challenges that make IT Managed Service Providers (MSPs) invaluable. MSPs offer secure data management, scalable IT solutions, and advanced collaboration tools to ensure efficient project execution. They also provide robust disaster recovery and business continuity plans, alongside integrating innovative technologies like BIM and 3D printing. Partnering with an MSP enables AEC firms to optimize their IT infrastructure and focus on core competencies, knowing their technology needs are expertly managed.

Manufacturing

Manufacturers depend on IT systems for everything from supply chain management to production automation. MSPs assist manufacturing companies by managing their IT infrastructure, ensuring uptime for critical production systems, and integrating advanced technologies like IoT and AI to streamline operations and improve efficiency.

By work with the right MSP, manufacturers can reduce downtime, optimize maintenance schedules, and improve overall operational efficiency. This integration of IT with operations enables manufacturers to make data-driven decisions, enhance productivity, and maintain a competitive edge in the market.

Legal

The legal industry deals with a considerable amount of sensitive data and requires IT systems that are both secure and compliant with regulatory standards. MSPs provide law firms with secure data storage, e-discovery solutions, and reliable backup and disaster recovery services to ensure continuous operation and data protection.

In summary, MSPs offer tailored services that address the specific IT needs of various industries, ensuring that businesses can remain competitive, compliant, and secure in an ever-evolving technological landscape.

Is an MSP Right For Your Business?

With the right MSP partnership, even a small business can wield the power of robust IT infrastructure and support. However, it’s also crucial to recognize that not all businesses may benefit from an MSP relationship.

When to Consider an MSP

• If you're a small business lacking the resources for a dedicated IT team
• When your operations are growing, and you need scalable IT support to match
• If you want to ensure the security and regulatory compliance of your IT services
  
  

When to Reconsider

• Larger corporations with sizable IT departments may find MSPs less needed
• Businesses with specialized or unique IT requirements that may be challenging for MSPs to accommodate
• Some highly regulated industries may have constraints on the use of outsourced IT services

Navigating the digital landscape, with its constant technological advancements and cybersecurity vulnerabilities, necessitates a strategic approach to IT management, especially for SMEs. Partnering with a Managed Service Provider (MSP) can significantly uplift a business, offering not just cost savings and operational efficiency but also a strategic edge in a competitive environment. Whether it’s through bolstering cybersecurity, ensuring compliance, or empowering businesses with the latest technologies, MSPs have proven to be invaluable allies.

However, the decision to engage with an MSP should come after careful consideration of your business needs, growth prospects, and the specific value an MSP can deliver to your operations. In this dynamic digital era, the right partnership can not only sustain but also accelerate your business’s success.