What is a managed IT service?

With two-thirds of businesses using them, learn about what managed IT services are and how they’re being used

IT infrastructure digital illustration

Businesses of all sizes and industries are going through a digital transformation, replacing legacy infrastructure and old, on-site hardware with digital systems and services in order to streamline processes and improve customer satisfaction. This is an imperative of the digital age, which COVID-19 and mass remote working have only exacerbated.

The transition to new systems and IT operations is no small task, however. Despite the numerous advantages of digital transformation and the current necessity for it, IT leaders and teams should not rush into anything. The careful approach required for reaping the most benefits can also be extremely time-consuming and involves ongoing work post-transformation. This is where managed services come in. 

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Managed service providers (MSPs) handle the day-to-day operation and maintenance of businesses’ digital services and infrastructure. This relieves the burden of digital transformation and allows in-house IT teams the time to find new tech optimisations to improve daily processes and bottom lines. 

In the last year, MSPs have become a high-value asset to businesses as they adapt to pandemic-related restrictions. Their services helped clients shift to remote working practically overnight, and since then have been adding value through business resilience solutions like VoIP, remote monitoring and management (RMM), and more. 

One can think of managed service providers as a form of outsourced resource, but with a more collaborative setup.

What can a managed IT service do for your business?

Managed services are an evolution of the traditional break/fix model, in which businesses would hire third-party specialists to repair, upgrade or install systems on an ad hoc basis. Instead, a managed service model tends to be subscription-based, with companies typically agreeing to pay a fixed amount each month in exchange for ongoing system management.

What that management entails can vary considerably depending on your needs and the provider's skill set. Most MSPs are able to offer a basic package of daily support, as well as more sophisticated deals that include disaster recovery.

Managed services are an excellent option for those businesses that want to scale but don't have the resources available to support the necessary infrastructure, or simply want to focus their attention on changing business strategy rather than fighting fires in their systems.

Service level agreements (SLAs) are important when outsourcing services, as this states the expectations for the minimum level of service the customer should receive

Managed IT services can cover a range of business functions, from network, application, system, payroll, server, and backup/recovery solutions to workstation and printer management (commonly referred to as managed print services, or MPS).

An MSP can also be hugely beneficial for staff when it comes to new hardware. For instance, remote workers who require new equipment – think keyboards, a monitor or printer supplies – can order this themselves, while still giving IT and purchasing departments visibility and control over supplies. This makes the IT management process more streamlined, and if this new equipment is purchased via a corporate price list so then accounting won’t need to worry about running it through expenses.

One common example of managed IT services at present is cloud services, where SMBs lacking expertise and resources can use a managed service provider (MSP) who may provide in-house cloud services or act as brokers with cloud services providers.

Another growing area in managed IT services is security. With the ever-growing risk of a malicious attack, some companies find it more efficient to outsource their security to a specialist managed security service provider (MSSP) who will handle the day-to-day security workload as well as patch management, backup, and responses to any breaches.

The specific advantages and disadvantages of managed IT services depend in part on the type of service, but there are some more general factors which may influence a business' choice to outsource a function to an MSP.

Advantages of managed IT services

  • Expertise: For smaller businesses in particular, being able to outsource knowledge and expertise can be an enormous help, as well as having experienced technical support available
  • Predictable costs: Rather than incurring large expenses for an IT issue, businesses can instead account for potential problems within a predictable monthly fee
  • Maintenance and upgrades: Organisations no longer have to worry whether software is up-to-date, as all this is taken care of by the provider. They can also get access to newer technologies which they may not have been able to afford by themselves
  • Time savings: Outsourcing management of services like security and cloud reduces the amount of time that in-house departments have to spend on it.

Disadvantages of managed IT services

  • Control: If there's an outage or an incident, there's little a business reliant on managed services can do. Theoretically, a good MSP will be able to address issues much more quickly than an internal IT team, but it can be frustrating to not have visibility of serious problems and progress in dealing with them in-house.
  • Flexibility: In general, managed IT service providers will have a standard offering which is available to all their clients. They may be able to modify this, but it will usually be less flexible than having a solution that is customised to business needs.
  • Reliability: Should anything happen to the service provider, customers could be left trying to find alternative solutions in a short space of time.

Whether businesses decide a managed IT services provider is the right route for them, it's not a market that is going away any time soon. In fact, it's the market is expected to be worth approximately $350 billion by 2026, according to a new report from Global Market Insight. The report added that the large enterprise segment accounted for the highest MSP market share in 2019. The COVID-19 crisis pushed many organisations into adopting managed services and boost market growth.

As the number of offerings and the capability of existing offerings grows, there is no doubt that we will see companies of all sizes making use of managed IT services for varying parts of their business.

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