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The Comprehensive Guide to Managed Services

The Comprehensive Guide to Managed Services

What is Managed Services?

The term “managed services” or “managed it services” refers to the practice of outsourcing information technology (IT) processes and functions to improve operations and reduce expenses. It’s a way to augment your company IT staff with access to specialized expertise and not worry about the cost and complexities of hiring and staffing for 24/7/365 critical business functions.

What is a Managed Services Provider?

Companies that offer managed services are called managed service providers (MSPs) or managed it service providers (MITSPs). MSPs are third-party companies that remotely manage IT infrastructure and systems.

Small and medium businesses (SMBs), nonprofits, government agencies and enterprises across a range of industry verticals leverage MSPs to deploy and manage technology solutions.

Typically, an MSP delivers applications and management services through the Internet under a contractual service-level agreement (SLA). The SLA details qualitative and quantitative performance metrics that govern the engagement between the MSP and the customer.

What Does ‘Managed Services’ Mean in Practice?

When you invest in technology, you need to maximize that investment. That’s difficult to achieve internally across your entire IT infrastructure and applications portfolio. For example, suppose your IT manager is a generalist who researches and purchases a $10,000 firewall for your company. In that case, he/she can’t deliver the full benefits of that purchase without the expertise to configure the firewall properly and manage it as your company’s security profile evolves.

By extrapolating this scenario across your organization’s IT needs, the benefits of managed services become apparent.

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Why Do Businesses Engage Managed Service Providers?

Businesses typically hire MSPs to help address common IT-related pain points, including:

Filling Technology & Training Skills Gaps
As the complexity of IT has ratcheted up, businesses of all sizes and SMBs, in particular, don’t have the necessary IT resources available to handle all the different disciplines and specializations required in each solutions area.

In many cases, SMBs with an in-house IT department rely on an IT generalist, or they’ve assigned IT responsibilities to an employee whose core job is not IT related. A receptionist who is given admin responsibility for the company’s phone system, for example, won’t understand the ins and outs of a management portal for a network edge device or how to configure a firewall properly.

MSPs have specialists focused on these complex solutions and navigate these portals all day long. Plus, MSPs have internal training programs to keep their own specialists up to date and aware of the latest technology trends and practices.

Handling Large-scale Projects
IT personnel are constantly solving problems for software and hardware that is broken or not functioning as designed, or handling projects that are mammoth in scale like:

  • Company-wide password management
  • Network security updates
  • Firmware and software updates across dozens of applications
  • Managing and troubleshooting internal portals and public-facing websites

And the list goes on and on.

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What Services Do Businesses Offload to Managed Service Providers?

Businesses across many industries engage with MSPs to take on sourcing, installation and management of a variety of IT-oriented business services, including:

Communication

Connectivity

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Want the full list and more? Check out our article on What Services Do Businesses Offload to Managed Service Providers?

What Levels of Service Do Managed Service Providers Offer?

MSPs like TPx typically offer managed services engagements at three service levels:

  1. Self-Managed 
  2. Co-Managed
  3. Fully Managed

Remember That MSP Size Matters
When considering services levels, keep in mind that MSP size matters. Smaller, regional MSPs will encounter situations where they lack scale in technology or expertise to deliver on service levels adequately.

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How Do Businesses Pay Managed Service Providers?

Pay-as-You Go Subscriptions
MSPs typically are paid monthly as part of one-year, two-year, or three-year term contracts, so your business gains a bankable set of solutions with a predictable monthly operating expense. Aside from creating hard, forecastable numbers in your IT budget, a primary benefit of this pricing model is leveraging hardware that the MSP sources on your behalf in manageable, cost-friendly monthly installments. In other words, when you’re working with an MSP, you don’t have to foot the bill in advance when your company needs a critical piece of hardware to implement a solution set. Whether that equipment is $50 or $50,000, the MSP helps you get what you need without scrambling to make upfront capital outlays. Here again, is another reason to work with a larger MSP with the capital resources to get you the right hardware for the right job.

Hardware Rental or Purchase
Some MSPs only offer rental options for the hardware that’s used to deliver your solution. Others, like TPx, will give you the option to purchase the equipment for your business in a monthly installed payment plan equal to the ongoing management cost. When the term ends, you get the gear. For example, let’s say you signed up for a three-year term for a managed firewall solution that included the firewall purchase. If you decide you no longer need firewall management at the end of the term, the MSP will turn over the firewall itself for your team to use. A reputable MSP will let you walk away without ripping out critical infrastructure.

Why Should Businesses Choose Managed Services vs. Break-Fix?

Companies often struggle to determine when to engage with an IT services provider to fix issues as they arise (a project-based model) and when to partner with an MSP on an ongoing basis. To help with this, we’ve put together the pros and cons list for each. First, let’s start with some definitions:

Break-Fix Support – IT services are provided as requested by a dispatched on-site technician. You’re billed for time and materials in a project-based or fee-for-service manner.

Managed Services Support – IT services are provided holistically and detailed in a service level agreement (SLA). Proactive monitoring and maintenance are delivered on-site or remotely to prevent and remediate problems before they affect your environment and systems.

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Still need more information? Get our pros and cons list here on Why Should Businesses Choose Managed Services vs. Break-Fix?

What to Look for in a Managed Services Provider?

Portfolio Breadth
An all-in-one provider with a fully managed IT suite of networking, security and communications solutions will give your business a cohesive solution and even pass on cost savings in the form of comprehensive service bundles (like the TPx Connect & Protect bundle).

Pricing Models
Generally speaking, larger MSPs can give you the ability to pay off capital expenses like firewalls and network builds over time, which can help you get the best solution for the job while making your IT and finance teams happy.

There are additional traits look out for. For the rest of the traits, check out the article below.

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How to Work with a Managed Services Provider

Communicate Your Goals
Are you adequately articulating what you need from your MSP? Many solutions can benefit your business, but not all of them meet your company’s exact requirements. Your MSP needs to know what you aim to accomplish in order to advise and assist you effectively. For example, if you’re trying to address your network security concerns but approach an MSP with a request to “manage my network,” true cybersecurity may not be part of their solution at all. On the one hand, they may not offer robust security. On the other hand, they may not scope that component into your tech stack even if they do. All in, clear communications can help you identify which MSPs can help you and ensure that an MSP delivers what you need.

Know What You’re Actually Buying
The depth of your solution, whether it’s a network, security or communications service, is primarily determined by your budget from both a technology standpoint and a service-level perspective. For instance, when looking at a network redundancy solution, if you’re purchasing a managed SD-WAN service from TPx, your edge router options vary considerably in quality and price.

  • A low-end router that’s $50 per month, per location delivers a typical SD-WAN solution but does not have subsecond failover to keep voice and video up even through an outage. Sessions start up after you reinitiate the call, but they aren’t persistent.
  • If your business requires subsecond failover no matter what, the router that can deliver that service is $500 a month, per location.

For more tips on how to successfully work with a managed services provider, check out the article below.

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