Managed Service Provider for Enterprises
Make informed decisions and maximize value by understanding MSP types, their benefits, resources involved, and the best way to navigate the selection process.
What is a Managed Service Provider (MSP)?
MSPs are companies that handle some or all aspects of specific functions of their client’s business operations. It's most commonly associated with IT, cybersecurity, DevOps, and other digital infrastructure related functions but not limited to it. MSPs give client businesses access to experienced resources that would either be too costly, time-intensive, difficult to scale, or underutilized if cultivated in-house.
Benefits of using MSPs
Smarter resource allocation
Access experienced resources when needed. MSPs provide specialized expertise without the overhead of a full in-house team.
Scalable by design
Adjust service levels to control resource availability for optimal cost-to-function ratio.
Predictable budgeting
With fixed monthly costs, managed services become a predictable expense.
Faster resolution
With 24×7 support, resolution can start as soon as the issue is reported or identified, leading to minimal disruptions.
Reduced risk
Diverse experience allows MSPs to predict, identify, and resolve problems quickly compared to most internal IT resources.
Improved compliance
MSPs maintain compliance with evolving regulations by monitoring and aligning systems to industry standards.
More bandwidth for your team
MSPs free up internal resources to focus on high-impact, strategic initiatives.
Businesses that leverage managed services strategically and for more than just cost saving enjoy a 12.4x performance premium.
Core MSP functions
Network and infrastructure management
MSPs manage both physical and digital infrastructure. This includes computing resources, network hardware, cloud components, VPNs, firewalls, and load balancers. They also handle storage, backups, patching, and disaster recovery, coordinating with internet service providers (ISPs) when needed.
Most of these services can be provided fully remotely but for others, the MSP may direct the client’s personnel for certain tasks or arrange for local resources.
Cybersecurity and compliance
Managed Security Service (MSS) focuses on securing a business against relevant and broad-spectrum threats, evaluating attack surfaces, relevant attack vectors, and security vulnerabilities to determine the optimal security plan. The exact implementation will vary from business to business and includes things like end-point security, 24/7 threat detection and response, penetration testing, dark web monitoring, etc.
Managed compliance services may include 24/7 compliance monitoring, raising alerts when the business is in breach of compliance, and industry-specific support such as HIPAA, Sarbanes-Oxley (SOX), or Know Your Customer (KYC). However, not all MSPs offer this level of depth as it requires specialized regulatory expertise.
Cloud management
MSPs manage and optimize cloud environments across platforms like AWS, Azure, and Google Cloud. While Cloud Service Providers offer their own tools, MSPs deliver a client-centric approach—configuring, monitoring, and scaling cloud infrastructure to align with business needs. Their services often cost less and provide more flexibility than CSP-managed solutions.
End-user support
One of the most critical areas of managed IT services is responsive end-user support. MSPs create a single point of contact where all IT related queries of end users are directed. This includes troubleshooting, issue resolution, and user guidance. Efficient and responsive helpdesk services are critical to reducing downtime and maintaining workforce productivity.
Remote monitoring and management (RMM)
Using advanced tools, MSPs remotely monitor and manage your IT infrastructure around the clock. This includes servers, endpoints, and connected devices like IoT hardware. With AI-powered automation, MSPs can proactively detect issues, trigger alerts, and even resolve problems before users are impacted—keeping systems running smoothly without constant manual intervention. This capability is foundational to most modern MSP services.
DevOps and automation support
MSPs streamline your software development lifecycle by managing DevOps workflows, including continuous integration and delivery (CI/CD). They build, test, and deploy faster by automating infrastructure and environments. Many also extend automation to internal processes and customer-facing systems—unlocking greater efficiency across your organization.
Application management
Application management is a function an MSP may share with in-house or outsourced developers as well as support teams of proprietary applications. The MSP’s role focuses on an app’s deployment environment by managing infrastructure, uptime, configuration, and version control. They collaborate with developers or vendors as needed, and are responsible for maintenance, recovery, and ensuring high availability across environments.
A successful cybersecurity attack costs enterprises $5million on average.
Types of MSPs
A few ways managed services providers (MSPs) can be classified are:
Vertical MSPs
Industry-specific knowledge and expertise enhance vertical MSP’s capabilities like compliance, security, application management, DevOps, and allows them to offer value beyond IT and support functions.
Specialized MSPs
These are similar to a vertical MSP, in that they develop expertise within a specific domain. This allows them to offer richer, and more comprehensive services within a specific MSP function.
Co-managed MSPs
This model is leveraged when a business already has internal IT resources and is looking to fill the gaps or derive more business value from a specific IT function by leveraging external expertise.
Fully managed MSPs
When an enterprise wants one or more IT functions completely taken over, fully managed MSPs are ideal. This can include anything from day-to-day maintenance to strategic planning & optimization.
Pure-play MSPs
These MSPs exclusively focus on managed services, typically centered around a specific platform or technology. They may also offer complementary services like consultation and development.
How to choose the right MSP type?
Finding the right MSP model depends on the following factors:
Internal IT resources
Complexity
The complexity of your IT needs may require you to select a vertical or specialized MSP with a deeper understanding of your needs than a pure-play MSP.
Cost
Pure-play MSPs offer more competitive pricing compared to vertical/specialized MSPs, but your business’ specialized needs should be given more weight in the decision-making process than cost alone.
IT management options: MSPs, in-house teams, and outsourcing
| MSP | Internal IT | IT Outsourcing | |
| Pricing models | Subscription-based | Payroll-based | Fixed-cost or project-based |
| Cost | Medium | High | Low |
| Scope | Broad (IT, Cloud, DevOps, apps) | Broad but no external oversight | Specific functions or projects |
| Availability | 24x7 | Business hours | 24x7 |
| Scalability | Easy and flexible | Difficult | Moderately easy |
| Control | SLA-driven | Full control | SLA-driven |
| Long-term value | Cost-savings, deriving business value from IT functions, access to IT expertise | Local expertise for business-specific IT challenges, Complete visibility overall IT processes | Cost-savings, smooth IT operations, strategic benefits (related to IT projects) |
Evaluating whether to go with in-house or outsourced IT, or partner with an MSP?
What to look for in an MSP partner
The managed services provider you choose will have a significant impact on your workflows and processes, beyond IT functions, projects, and capabilities. Strategically aligned MSPs can enable and accelerate desired business outcomes, whereas misaligned MSPs can undermine several enterprise strengths. The following factors should inform your MSP selection process:
Technical requirements
Evaluate MSP expertise in all functions you expect them to take over and need their support and advice for. Your IT needs should be the evaluation focal point, as they can be compared directly to the services they offer. Certifications, projects undertaken, and contracts with similar businesses are a good way to determine whether an MSP has the right expertise and experience.
Industry knowledge
An adequate level of industry and regional knowledge is critical for strategic MSPs so they can tailor their managed IT services to your business needs and navigate challenges unique to your environment.
Scalability goals
An MSP should be able to scale to meet the needs of your business. Make sure the MSP you are choosing has the resources and personnel to keep pace with the scalability needs of your business, ideally beyond the scope of SLA if needed.
Internal culture
Go beyond linguistic, time-zone, and process synchronization and evaluate MSPs for cultural alignment. Decision-making approach, risk management, and compliance prioritization are among many culture-relevant dimensions for evaluation. However, you should focus on the core tenets of your work culture and test alignment in them.
Security capabilities and credentials
A security-first approach to IT support, DevOps, and other MSP functions is a desirable trait. Certifications and partnerships are also credible endorsements to consider. More importantly, look for MSPs that prioritize your security needs over their expertise.
SLA approach
Rigid contracts that do not allow for any or sufficient customization are a huge red flag. Cookie-cutter SLAs are a close second. You should seek MSPs that create SLAs around not just your IT needs but broader business goals, are flexible enough to accommodate your evolving requirements and facilitate “shared ownership” rather than explicit division and assignment of responsibilities.
Support model
Whether you need fully managed, co-managed, specific functions, or custom support, make sure the MSP provides it, ideally natively. An MSP specializing in fully managed support may not have protocols and procedures for other support structures.
Client success metrics
How an MSP evaluates partnership success and client success is important to consider. How comprehensive and goal-oriented the client
success metrics of an MSP are, can help you differentiate MSPs pursuing mutual success from ones focusing primarily on contractual obligations.
Transparency
Prioritize MSPs that treat transparency as a core value rather than a compliance obligation.
Communication
Look into the communication practices and protocols of the MSP to ensure they are comprehensive, constructive, frequent, and focused on more than just maintenance and resolution.
Approach to innovation
Innovation for the sake of innovation can be a red flag. The MSP should be well-versed in the latest tools and technologies being used in your industry and how they can be integrated into your business model to create value.
Advantages of strategic MSPs over traditional MSPs
Streamlined communication
Strategic MSPs adapt to a client’s business language, including industry-specific terminology, to facilitate smoother conversations.
Legacy system integration
Instead of aligning enterprises to a market-standard infrastructure, strategic MSPs accommodate priorities and limitations by working with existing systems.
Industry compliance
Strategic MSPs expand beyond standard compliance practices to include compliance for all innovative and strategic integrations that are under their purview, like AI initiatives.
Effectively navigating evolving tech
By developing innovation strategies that amplify a client’s capabilities, strategic MSPs help their clients adapt and integrate relevant technologies ahead of their peers.
Two-thirds of top-performing companies leverage MSPs to gain a strategic advantage or close capability gaps in their workforce.
How are agile pods different from MSPs?
Agile pods and managed service providers (MSPs) operate in separate domains—but they can complement each other powerfully when an enterprise pursues innovation initiatives.
What are Agile Pods?
Benefits of agile pods
- End-to-end delivery: Agile pods take full ownership of their work and have minimal external dependencies, which makes autonomy essential.
- Adaptability: Their self-contained, cross-functional nature allows them to quickly respond to changes within their scope.
- Rapid delivery: Defined scope, cohesion, and cross-functionality help agile pods bypass common delivery bottlenecks.
- Reduced risk: Cross-functional collaboration reduces knowledge silos, while faster delivery enables quicker testing, feedback, and iteration.
Modern managed services can lead to a 15% to 45% operating cost reduction.
FAQs about managed service providers (MSPs)
Choosing an MSP doesn’t mean giving up control. An MSP is as tightly bound to your business via an SLA as in-house IT resources are by their contracts. With the right SLA and success metrics, you gain more consistent, long-term control and visibility over outsourced IT functions.
Cybersecurity is a core offering of most MSPs. As entities that specialize in IT and other data-sensitive digital functions, MSPs have more stringent security controls, better tools, and adhere to security best practices, compared to many in-house IT teams.
Yes. MSPs tailor their services to each client’s needs. Scope of each service, alignment with business goals, availability, resources dedicated, and several other elements are specified in the SLA.
Not exactly. Managed Service Partner is an AWS-specific term reserved for third-party service providers specializing in AWS ecosystem. So, all Managed Service Partners can also be classified as Managed Service Providers, but not the other way around. When comparing managed service providers, be sure to evaluate certifications, partnerships, and platform alignment.
In some cases, managed IT services may appear more costly than in-house resources. However, when you account for the experience, expertise, capabilities, 24/7 availability, scalability, and other strengths MSPs offer, matching that capability internally can be significantly more expensive.
An MSP will only provide services that are defined within the scope of your SLA. If something isn’t included in the contract, it usually won’t be covered. A vague SLA benefits no one—clear scope ensures alignment and mutual success.
Managed IT services are not outsourcing, even though there are significant similarities. MSPs:
- Focus on entire support functions
- Have time-bound contracts
- Act proactively
- Are aligned with broader/long-term business’s needs
In contrast, outsourcing typically focuses on specific tasks and projects and has contracts focused on delivery. They mostly focus on specific task/project goals and parameters and react to changing requirements rather than proactively improving.
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