9 min read

What Is a Managed Service Provider (MSP) and What Do They Do?

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“What does MSP stand for?” While many business owners are probably familiar with the term by now, for those who may not know, MSP is an acronym for “managed service provider.” What is a managed service provider? What do they do for businesses? Why should your business use an MSP? How much do managed service provider contracts cost?

Here’s what to know about MSPs and their services:

What Is a Managed Service Provider (MSP)?

In the field of IT services, a managed service provider is a business that provides a variety of IT support services to other companies. The nature and scope of these services can vary greatly from one MSP to the next.

Because of how varied the managed IT services that MSPs offer can be, it is often necessary to verify with each service provider what their specific service offerings are.

What Do Managed Service Providers Do?

So, what do MSPs do? While specific service offerings will vary from one provider to the next, some of the most common services that MSPs perform include:

IT Management

IT management is a term that covers a wide variety of IT services, such as:

  • Remote Systems Monitoring. MSPs often use remote monitoring tools to keep track of key network assets remotely to assess system health and identify potential issues. This is often useful for proactively preventing IT problems from faulty, misused, or compromised IT assets.
  • Server Management. Many managed IT services will help clients install, set up, and maintain new or existing on-premises server equipment in the client’s data center. They may also help manage cloud-based assets by configuring cloud servers and managing remote data environments.
  • Service Desk/Tech Support. MSPs may offer IT professionals to help answer employee questions about various IT assets or troubleshoot computer problems for workers experiencing an issue.
  • Asset Lifecycle Management. Knowing when to remove obsolescent IT assets and replace them with newer models to maximize revenue from selling or donating them (while minimizing the cost of replacement) is vital. MSPs may have extensive connections with resellers and other organizations to help make asset lifecycle management more lucrative and timely.

Basically, if it could be considered a “day-to-day” IT management task, an MSP’s IT management service may cover it. Of course, it’s important to verify with an MSP if they offer a particular service before signing a contract!

Cybersecurity

While modern technology has brought many conveniences and helped connect companies with the future, it has also created numerous risks. Cybersecurity services help protect businesses from various cyber threats and vulnerabilities to minimize the risk that their data and services will be compromised.

Some MSPs specialize entirely on cybersecurity, providing services such as:

  • Penetration Testing. One of the best ways to stop a cyberattack is to have a team of IT security pros try to break the system first. Penetration tests simulate actual attacks on a network to try to identify any fatal flaws in an organization’s security policies, tools, and procedures that malicious actors might exploit. Then, a report is generated providing key findings and recommendations for how to protect against future attacks.
  • Firewall/Network Security Management. Many MSPs with cybersecurity services will help businesses configure their network firewalls and other security features to minimize rules conflicts that may impede network performance while maximizing protection from cyber threats.
  • Security Monitoring. Cybersecurity specialists often use monitoring tools to proactively identify suspicious activity on a network that may indicate an attack in progress. This helps to improve speed of response so that the damage caused is minimized.
  • Incident Response. When a cybersecurity incident happens, the MSP will work to identify, contain, and eliminate the breach. Then, they will investigate the attack methodology and implement fixes to prevent future attacks using the same methods.
  • Employee Security Training. Some MSPs offer employee training services to help workers learn how to recognize and avoid common cyber threats—such as phishing attacks—to help the organization minimize its risk.

Cloud Adoption

The “cloud” has become a vital tool for many businesses. However, many businesses struggle to get the most out of their cloud-based applications and platforms. So, some MSPs offer cloud adoption and management services to help.

These services can include:

  • Helping with Virtualization. Many cloud service providers (CSPs) use virtualization to create many “pseudo-servers” out of one big super-server. While this allows multiple clients to share one server (thus splitting the costs so it’s less expensive), it can be difficult to manage a CSP’s virtualized environment. MSPs can help companies pick the right cloud services, manage their virtualized server settings, and integrate that virtual cloud solution with their existing enterprise applications and operations workflows.
  • Creating Custom Cloud Solutions. Sometimes, the enterprise’s existing applications aren’t the right fit for a given cloud-based environment. So, MSPs may offer custom cloud solutions that allow their clients to have strict control over how the environment is set up—allowing the solution to integrate more smoothly with existing processes and tools.
  • Enabling Remote Workplace Solutions. Remote work became a key strategy for keeping business operations going during the COVID-19 pandemic. Even before the pandemic, remote work was useful for attracting and retaining top talents who may not have been within commuting distance of a company’s offices. MSPs can help businesses perfect their “work from home” infrastructure by setting up tools like virtual private networks (VPNs), remote desktop solutions, and business collaboration tools.
  • Hosting Management. There are a lot of cloud service providers/platforms for businesses to choose from, and some may be better for a particular business’ needs than others. MSPs can help companies get the best hosting options at a competitive cost by leveraging their networks of connections and their extensive knowledge of cloud platforms.

Regulatory Compliance

Compliance is a huge issue for businesses. Regulations concerning business IT can be incredibly complicated—with different standards applying based on factors like the company’s size, industry, location, and customer base.

Then, every once in a while, a new regulation gets passed or a compliance standard gets updated and businesses find themselves having to double-check their compliance measures!

MSPs help companies meet their regulatory compliance requirements by providing:

  • Cybersecurity Services. Many regulations are concerned with the protection of sensitive information. Cybersecurity services, such as the ones listed earlier, can help companies meet their security requirements.
  • IT Process Assessments. As part of an advisory service, an MSP may provide a process assessment that helps establish how the business is using IT assets and whether those processes fall within regulatory guidelines.
  • IT Strategy Services. An MSP can help create an IT strategy for a business to help it set goals for meeting important regulatory requirements and provide step-by-step plans for achieving those goals.
  • Startup Support. Newer businesses may need extra help coming to grips with key industry regulations. Startup support services can help those companies make smarter IT decisions so meeting compliance requirements is easier.

Backup and Recovery

Consistent and reliable access to data is the cornerstone of modern business operations. Without access to key financial data, order histories, and more, business operations can grind to a halt. This is where data backup and disaster recovery services can help.

MSPs can help businesses choose and maintain a remote data backup service to protect their data in case of disastrous events such as:

  • Ransomware Attacks. A type of malware attack that encrypts all of the data on a network so it’s unusable. Remote backups help render ransomware attacks toothless since data can simply be re-downloaded from the remote location.
  • Power Outages. Even the most well-prepared power grid can suffer sudden failures. Having a remote data backup helps keep data accessible if the primary data center loses power.
  • Natural Disasters. Hurricanes, earthquakes, floods, and other natural disasters can damage or outright destroy data center equipment and/or the infrastructure needed to keep servers operating. Remote data backup and recovery solutions can help businesses spin up a secondary production environment when the worst happens.

When setting up a data backup/disaster recovery solution, it’s important to consider things like:

  • Recovery Point Objective (RPO). How often is data backed up to the remote storage? More frequent backups mean less is lost if an emergency occurs, but can be more taxing on network bandwidth and more expensive to maintain.
  • Recovery Time Objective (RTO). How long does it take to recover from a disaster? Shorter RTOs are generally more desirable, but may be more expensive to match.
  • What Data Is Most Important. Not every piece of data needs to be backed up. Companies can reduce backup bandwidth and save money by only backing up the data that is most crucial to their operations.
  • Where the Backup Is Stored. In backup solutions, there’s a concept called geodiversity, which essentially means keeping the backup located somewhere far away from the primary production environment (i.e. if the business is in Florida, the backup should be in Washington or New York, not Tallahassee where the same hurricane can hit it). This way, disastrous events that destroy a company’s data center aren’t as likely to affect the backup.

MSPs can help businesses better assess their data backup needs to provide optimal performance at an affordable cost.

Why Choose a Managed Service Provider?

So, why should your business use a managed service provider? There are a few benefits to using an MSP to help with your business’ IT management:

  • Saving Time on IT Management. The most obvious benefit of hiring an MSP is not having to handle IT management yourself—or at least not all by yourself. You can assign the more tedious day-to-day IT management task to the MSP and free up more time internally to focus on value-added tasks that help grow the business.
  • Gaining Instant Access to IT Expertise. The process for finding and recruiting IT professionals can be a long and difficult one. IT professionals are in high demand and can command a large salary—easily reaching six figures depending on their skills and experience. With an outsourced IT service, you get near-immediate access to a team of experts with a broad range of skills for a portion of the cost that hiring them internally would be.
  • Improving the Scalability of IT Services. With an internal IT department, it can be difficult to scale up or down as IT needs change over time. With an outsourced MSP’s services, scaling the IT department is often easier with an MSP than it is with an internal department—especially during periods of rapid growth or whenever a major IT project rolls around and requires more hands on deck.
  • Improving Cybersecurity and Network Performance. MSPs can help their clients build (or rework) their IT infrastructure to not only improve performance by streamlining systems, but also increase cybersecurity by eliminating vulnerabilities and implementing new security tools. This helps to harden the business against disruption from both poor network optimization and malicious attacks.

Managed Service Provider Pricing

One question that many business owners (or their investors) have to ask about MSPs is this: “how much do managed service provider contracts cost?” The answer is: “It depends.”

The actual cost of MSP services will vary depending on the nature of the service, the length of any contracts signed, and the staff and tools provided as part of the service. Different managed service providers may base their pricing on different models as well.

For example, some MSPs base their pricing on a “per device” model, where they charge the business for each individual IT device they service. Others base it on the total number of users within the client organization (a “per user” model). Some create different pricing tiers (like Basic, Intermediate, and Advanced or Enterprise) and let their customers pick the tier that most closely matches their needs.

Others offer more modular services. Instead of picking a package or going with a “one size fits all, but scaled to X number of devices/users,” they offer clients a range of services and can pick and choose the best ones to create a custom solution.

So, how much does a managed service provider contract cost? Depending on what you need, you could expect to spend over $200 per IT user in your organization a month. Some companies spend more, some spend less. However, when getting pricing information from MSPs, be sure to ask some questions about:

  • Their work history;
  • Where their offices and teams are based;
  • How the value of their services compare to others in the industry;
  • The qualifications of their whole team;
  • Their communication guidelines with you, their client;
  • Their project process;
  • How they handle project scoping issues (and what scope they can handle); and
  • How they test their IT security or network infrastructure work.

Are you ready to revolutionize your IT with services from an experienced and reliable MSP with a proven track record of excellence? Reach out to the Systems X team now to get started!

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