What’s an MSP?

Managed Services is the practice of outsourcing the responsibility of a defined set of services to its clients.  Strategically-speaking, it’s a method by which a company can improve operations by leveraging the efficiencies afforded by deploying a solution provider as opposed to internal headcount in addition to what should be increased expertise.

The evolution of MSPs started back in the 1990s and was born out of an emergence of application service providers.  This laid the foundation for what would start as remote monitoring and management of servers and networks.  But since the advent of managed services, the scope of what MSPs provide has expanded tremendously, especially as technology has become more prevalent in how modern businesses operate.  In today’s environment it’s common for MSPs to offer:

  • Connectivity + bandwidth
  • Network monitoring
  • Security
  • Virtualization
  • Disaster recovery
  • Application support + management
  • Infrastructure
  • Storage
  • Desktop + communications
  • Mobility
  • Help desk
  • …and more

With IT driving many (if not all) business operations for a large swath of companies ranging from solopreneurs to SMBs, all the way up to the enterprise, the managed services market has exploded, both in terms of what it encompasses but also the size of the market itself.  For context, in 2014 managed services accounted for roughly $107B+ in revenue, scaling to upwards of $200B and beyond in 2020.  More than anything, what this shows is that outsourcing IT has become commonplace.

As you might expect, the number of MSPs has also grown quite dramatically, and while it’s hard to say precisely how many exist it’s been estimated that there are 150,000+ in operation.  With so many potential partners to hand off these business-critical elements of your business to, it’s important to know which questions to ask when evaluating MSPs.

Top 4 Questions to Ask an MSP

  1. What is technology and services will be provided?  You’ll want to be crystal clear about what the provider is ultimately going to do.  As we outlined above, there’s a lot that an MSP potentially might do, which leaves a lot of room for variance when you’re talking about what your needs are compared to what they’ll ultimately provide.  Similarly, you’ll want to get as much of the technology elements solution (i.e. licensing, for example) included as a part of the agreement.
  2. Which elements of the solution are fully-managed versus self-serviced?  This is where the balance between technology provider and service provider becomes most apparent.  If it’s technology heavy, but light on services/expertise, you really have to ask yourself how much better off you are compared to just going at it alone.  We are of the mindset that the MSP space should tilt towards the services side, where the team/expertise that you get to leverage becomes one of the core value points to working with an MSP.
  3. What are the variable costs that I need to be aware of?  To over simplify the way that SMBs in particular should evaluate MSPs, let’s assume that on one hand you have functional checkboxes and then on the other, you have monetary value.  Think: High performance, high reliability, scalable, compliance, and then cost containment, transparency, and predictability.  Variable cost structures throw a wrench into this, and the degree to which invoices from MSPs that don’t structure inclusive, predictable price points creates scenarios where invoices can change dramatically across different billing periods.  Fact is, we believe that the total cost of ownership (TCO) for outsourced IT should entail zero guesswork.  You not only want to be sure that you have a right-sized solution, but that you’ll know exactly what it’s going to cost.
  4. Is this a cookie-cutter solution or is it made for us?  Businesses are like fingerprints, each unique in various ways.  As a function of that, the way that IT is deployed, implemented, and managed should reflect those nuances accordingly.  Taken further, there are specific industries where regulatory bodies dictate some of these elements, like data storage, retention, documented policies/procedures, and more.  Healthcare and financial services are great examples of this, and you’ll want to be sure that the MSP is not just familiar, but experts in understanding how these rules apply to your business.  Otherwise, you’ll likely find yourself in a scenario where you’re paying for a provider that ultimately creates more downside risk than operational upside.

Note, this is just a primer.  There are many additional facets that you’ll want to understand in order to make an educated decision on which provider is best for your business.  As an internal question, you should always be attaching these sort of changes in how you operate to a desired business outcome; cost savings, operational efficiencies, reduced regulatory or cybersecurity risk — things that are measurable that even after you’ve decided to work with a provider, you’ll use to ensure that you’re continuing to receive the requisite value from the provider.

Lastly, if you’re considering an MSP we’d love to be in the conversation as a potential partner.  Reach out to the team at hello@magicdesk.io and we’ll have a technology advisor connect with you to learn how we can help!