What is Managed Services?
Managed IT service is when a company outsources certain IT functions to a third-party provider, referred to as a Managed Service Provider or MSP. These outsourced functions may be as basic as keeping IT equipment and other services functional all the way up to full IT team outsourcing.
The goal is to either serve as an IT team for a company that has little or no internal capabilities or to support an experienced IT team by taking some of the day-to-day tasks off their plate.
Why Does Managed Services Matter?
Technology in the workplace is changing rapidly and getting more complex every year.
One great example is the number of devices employees depend on. Just 20 years ago, most employees only had access to work technology while they were at work. Today, it’s likely employees are accessing company information in the office, on a work laptop at home, on a tablet and even on their personal phone–and some of those devices are being used without the IT department even knowing they’re in use.
The IT team often has to come up with ways to support all of those devices and use cases while also keeping company data secure. That’s just one example of how day-to-day IT work can quickly balloon in order to keep pace with the way workplaces use technology.
Filling the Talent Gap
We see that IT work is becoming more complex, but IT talent is not keeping up with the demand. Even though the unemployment rate is the lowest it’s been since 2000, nearly 60% of employers struggle to fill job vacancies within 12 weeks. Experts predict that trend is going to get worse, putting the technology, media and telecommunications industries short 4.3 million skilled workers globally by 2030.
That means many companies won’t have the talent to support many of these critical IT services. Without someone managing upkeep and maintenance business owners run the risk of cybersecurity breaches, data loss and other issues that can negatively impact a business.
If you are lucky enough to have IT talent on your team, the last thing you want to do is alienate them or cause them to burn out on small tasks and maintenance issues.
Using a MSP allows your IT team to focus on strategic initiatives that support your business. Not only is that good for the bottom line, it also proves the value of your IT department, giving you a bargaining chip for future budget talks.
History of Managed Services
In the 1990s networks were fairly simple systems. Since there wasn’t a lot of dedicated staff in the IT department, the teams typically didn’t do anything for general maintenance if their machines were malfunctioning or slowing down–only if they stopped working. Once they broke, the technology team would fix them, which became known as the break/fix method.
This mentality cost companies a lot of lost revenue thanks to downtime and loss of data and productivity.
After a while some of the biggest Fortune 500 companies recognized the negative impact this mentality was having on their business. They began to work with IT service providers to proactively diagnose and correct problems before they caused an issue for the company. This early version of IT outsourced service management used complex software to analyze the data, which was extremely cost prohibitive and wasn’t accessible for most companies.
The Beginning of Widespread Usage
By the end of the decade, computers were more complex and most offices had several other devices–like printers and fax machines–on their networks. Smaller companies began to realize the break/fix method no longer made good business sense. They needed to start being proactive about monitoring their equipment and providing maintenance before something broke.
However, putting that realization into practice was easier said than done because that proactive monitoring and maintenance put a serious strain on already limited IT staff and resources. So, by the late 1990s, more companies began to use third party IT services as a way to outsource some of their day-to-day IT needs including systems management, network monitoring and security.
As the demand grew, the cost decreased and became more accessible for businesses. Today 64% of organizations say they use some form of managed IT services.
What Does the Future Hold?
With new technologies becoming more commonplace, the industry is expected to grow to keep up with a 12.5% growth by 2020, making it a $193 billion industry. We’re also seeing some trends for the future of IT including:
- Data and IT Security: Hardly a month goes by that we don’t hear about a data breach or other cybersecurity issue. MSPs are responding to this need by offering more robust cybersecurity services to their customers.
- Specialization: While most MSPs will still offer generalized services, we’ll likely see more providers start to focus on specific industries. Becoming experts will allow MSPs to understand the nuances and deliver a bigger value to their customers.
- The Internet of Things: The Internet of Things goes far beyond smart speakers in your home. We’re seeing this trend skyrocket in utilities, healthcare, the auto industry and more. MSPs will need to keep pace with this growing trend.
Most Common Type of Services
The number and type of services a company needs from a MSP usually depend on the company’s internal IT capabilities. However, the most common services companies need support on are:
IT backup services protect and retain your data and allow you to recover data as small as single files or as large as entire databases.
This layer of redundancy provides additional security and accessibility in case of an event. It usually makes sense to outsource secure data back-ups to take advantage of the state-of-the art technology an MSP can offer.
Help Desk Solutions
Many companies who use managed IT services have little or no IT resources of their own. MSPs often offer help desk solutions as a way to give their customers access to an on-call IT specialist who can help them troubleshoot their issues either remotely or on-site.
IT Support Services
IT support services are really useful when you need a combination of IT support and guidance. The MSP is responsible for proactively managing and patching your devices while providing insight into how your system works and how it should work.
Managed Network Security
This service helps free up your IT resources by outsourcing tasks like network intrusion detection and prevention, virus and spam eradication, content filtering and traffic analysis through a traditional or next generation firewall.
With so many companies adopting this extremely popular cloud service, many MSPs are able to plan, design, implement and support Office365 for their customers.
This type of data storage architecture allows a customer to store large amounts of unstructured data. As businesses struggle to find ways to store massive amounts of data, object storage can offer benefits like cost-effectiveness, scalability and reliability. This type of storage is typically used for data like media files, web content, documents and backups.
General data storage comes in several tiers. The provider generally works with the customer to find and use the type of storage that will give them the optimal efficiency and the lowest cost.
This type of outsourced IT allows your MSP to monitor your servers, applications and network. They’ll interpret the data and real-time metrics in order to proactively identify and solve issues before they cause downtime and impact your business.
Small and medium companies don’t typically have the capacity to hire a dedicated Chief Information Officer. A Virtual CIO is a service some MSPs offer that provides analysis, strategy and a step-by-step plan for the company’s technology.
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Type of Providers & Companies
Most managed service providers offer different levels of service or even customized packages depending on what your company needs. With so many options to choose from, your company might be wondering how to choose the right service provider to partner with for IT needs.Before you get started, it’s important to understand the common levels of service that most MSPs offer.
This is a good option for a company who has significant IT resources internally but wants to take some of the day-to-day tasks off their in-house team’s plate. In this role the MSP will usually focus on monitoring, alerting the customer in order to proactively fix any problems with the company’s technology. They won’t necessarily be involved in any strategic IT work.
A consulting relationship works well for companies that have some internal IT resources but need strategic guidance for new projects or future growth. The MSP can perform all the functions they would in the basic relationship as well as help the company with more strategic initiatives, like creating a plan to scale up.
An MSP that offers full outsourcing will have highly trained staff and will be able to offer a full spectrum of IT services using their own facilities and equipment. They’ll typically be able to do everything that a basic and consulting MSP offers as well as higher-level strategic services, like a virtual CIO.
Cloud Managed Service Provider
A cloud managed service provider offers many of the same benefits as a traditional MSP, but with a focus on cloud management. While some companies focus solely on cloud services, many are able to offer both your traditional service offerings as well as cloud services as part of their packages.
Local Provider vs Big Box Provider
When customers decide they want to work with an MSP, many of them wonder if location matters when they’re choosing their provider.
When you first get started, you’ll have the option of choosing between a local provider, like Tech-Ache Solutions & Consulting, or a national provider, like Amazon Web Services. Both have their pros and cons so it’s important to understand what your company needs and values from the relationship before you choose.
Choosing a local provider doesn’t mean you’ll have to skimp on services or capabilities. Many local MSPs have the infrastructure and technical expertise to rival a big box store. “Local” providers can actually have multiple locations (for example, Tech-Ache Solutions & Consulting has locations in around the USA and provide extended support hours and offer a robust service selection.
One of the reasons Tech-Ache Solutions & Consulting customers chose a local provideri s the long-term relationship they get with a local vendor.
That’s because these MSPs specialize in giving each customer individual care and focus.They can also provide specialized knowledge about your local market and, if you ever need on-site help, they can be there quickly.
Choosing Big Box
One benefit of a big box MSP is that they tend to have a global footprint. If you need to scale your business up quickly or replicate in multiple countries, these providers will have experience doing so. Big box companies can also give you access to the latest technology. On the other hand, you may not have access to the same level of customer care as you would with a local provider.
What Types of Businesses Use Managed iT Services
Companies as small as a one-person startup to as large as a Fortune 500 use MSPs. Since most providers are able to offer various tiers of service, it’s easy for companies to find one that works well with their IT needs.
Certain industries will need to work with managed service providers who have specific experience in the target industry. MSPs who have industry knowledge will be better at understanding how IT impacts business goals in industries like:
- Manufacturing and Distribution
- Master Franchises & Brand Companies
- Professional Services
- Real Estate
- Law Firms
- Financial Services & Accounting
- Insurance Firms
There are a lot of misconceptions when it comes to working with an MSP. We’ve broken down some of the most common myths we hear about managed service providers.
Myth: Working with an IT services provider will be too expensive.
Fact: Outsourcing IT tasks can actually be less expensive than hiring a new employee. Especially when you consider that the service frees up your current IT team to work on more strategic projects that can positively impact your bottom line. Most providers will also offer tiers of service, so it’s possible to find one that works within your budget.
Myth: The MSP will be too controlling.
Fact: In any services provider relationship, the customer is ultimately the boss. Even if you engage the managed IT service provider as a virtual CIO, your company should always have the final say in any decision.
Myth: IT services should be handled within the in-house IT team.
Fact: A managed service provider acts as an extension of your in-house team. By taking some of the day-to-day tasks off your IT team’s plate, an MSP frees them up to do more strategic work.
Myth: My company is too small to work with an outsourced IT provider.
Fact: Small companies usually need a managed service provider even more than a larger company might. These small companies typically don’t have the capacity to manage these IT tasks in-house, leaving them vulnerable to costly downtime and cybersecurity breaches.
Working with a managed services provider can be a great business decision, but it can also be challenging at times.
Occasionally the customer might have a different interpretation of what the company will provide or how it will be implemented. That’s because customers and providers often have a different interpretation of words like “best practice” or whether the management of networking gear starts with the initial setup or begins after everything is already functional.
With multiple levels of services provided and multiple ways to interpret what each party is responsible for, it’s important for both the customer and the managed service provider to be clear on what the agreement entails and what would fall outside of its scope.
As a customer, you should also always look for a company that is able to offer expert staff, state-of-the-art technology and preventative maintenance–not just a fix when something breaks.
How to Decide if you Need a Managed Service Company
You know your business needs services like IT support, backup and other similar services, so is it time to engage with an expert IT provider? Here’s what you should consider:
Size of your business
Almost all small and medium companies could benefit from using an MSP. These companies are already paying for many of these services, like anti-virus software and data backup, a la carte.
A third-party IT service provider can consolidate all these services, be proactive about fixing things before they break and decrease your downtime.
The next question is whether or not you have capacity internally to address these services. If the answer is yes, you should also ask if managing these IT services is taking your team away from more focused, strategic IT initiatives. Remember, you don’t want to waste your IT talent on minimal tasks and maintenance issues, but rather focus on solving IT management pains.
Your MSPs Offerings
As we mentioned before, MSPs range from basic IT support to total IT outsourcing. They may be a large national company or they may be a local company with great customer service. It’s important to evaluate your needs before you decide whether or not your company should work with a managed service provider. This will ensure you make the right decision and help you find the right provider if you choose to work with one.
Making the Business Case
Working with a managed IT services business is often less expensive than hiring new talent. It’s also typically a monthly recurring cost that’s easy to predict and budget for and can actually save your company time and money.
An MSP can also reduce your downtime, which is a significant cost saving in itself considering the average downtime costs nearly $9,000 per minute.
Your MSP is proactively monitoring and managing your systems, which means they’re ready to solve any issues before they become a costly problem for your company.
A Plan for the Future
Your MSP can provide guidance on how your IT should move forward and support the company’s bottom line.
Tech-Ache’s Solutions & Consulting Offering
Tech-Ache Solutions & Consulting managed IT service line will give your company the support it needs for everything from application hosting to a virtual CIO. We structure our services to give you as much or as little support as you need and we pride ourselves in being able to seamlessly integrate with your IT team.
A Local Provider
As a local provider, we offer enterprise-level solutions of a national provider with superior customer service, including 24/7/365 support.
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