Managed Service Providers (MSP): 2024 Buyer’s Guide

How Do MSPs Work?

MSPs establish a contractual service-level agreement (SLA) that specifies the terms of their managed services. This SLA shapes the quality and scope of the services provided, ensuring a defined standard of performance and availability. MSPs typically use advanced monitoring and remote management technology to oversee and control IT systems, identifying and resolving issues.

By using automated tools and expert resources, MSPs can manage multiple clients concurrently, utilizing economies of scale to offer these services at a competitive price. This allows even small to medium-sized enterprises access to high-quality IT management resources.

Learn more in our detailed guide to msp events.

MSP vs. IT Outsourcing: What Is the Difference?

Managed services and outsourcing, while similar, involve different approaches to external support. 

MSPs offer continual, regular management and maintenance of company systems, typically under a monthly subscription model. This approach is proactive, focusing on preventing problems before they occur.

IT outsourcing often takes a project-based approach, where external resources are used for specific, often temporary, business needs. Unlike MSPs, outsourcing does not necessarily assume ongoing responsibility for the IT environment after project completion.

Learn more in our detailed guide to managed service provider vs outsourcing (coming soon)

What Are the Benefits of Managed Service Providers?

MSPs offer several capabilities that many organizations would struggle to access otherwise. They:

• Expertise: An MSP model can be particularly beneficial for small and medium-sized businesses that may not have the resources to hire a full-time, in-house IT team. MSPs stay current with the latest technological advancements and industry best practices, providing access to certified professionals with deep technical knowledge in domains such as cybersecurity, cloud computing, and network management.
• Filling staff shortages: MSPs can act as an extension of a company’s IT department, providing personnel to cover gaps due to staff shortages, vacations, or unexpected absences. This ensures continuity in IT operations and allows internal staff to focus on core business activities. 
• Improving security: MSPs use advanced security tools and practices, such as firewalls, intrusion detection systems, and regular vulnerability assessments. They can also support compliance with industry regulations and standards, which can be complex for organizations, especially those with limited in-house IT resources.
• Support business continuity: MSPs plan and implement strategies to ensure that data is regularly backed up and that systems can be quickly restored in the event of a failure or disaster. This minimizes downtime and ensures that organizations can continue operations with minimal disruption. 

Related content: Read our guide to MSP cyber security

Managed Service Provider Pricing Models

MSP pricing models vary, offering flexibility to meet different business needs and budgets. Common pricing models include:

• Per-device pricing: Clients are charged based on the number of devices managed. This model is suitable for organizations with a clear inventory of IT assets and offers transparency in billing, making it easier to budget for IT expenses.
• Per-user pricing: Clients are billed per user, covering all devices used by that user. This model is suitable for companies with employees who use multiple devices. It simplifies billing and ensures that each user receives consistent support regardless of the number of devices they use, which can include desktops, laptops, tablets, and smartphones.
• Tiered pricing: MSPs offer different levels of service packages (e.g., basic, standard, premium), each with varying features and support levels. Clients can choose the tier that best fits their needs and budget. This model provides flexibility and allows organizations to select a package that aligns with their IT requirements and financial constraints, with the option to upgrade as their needs change.

Value-based pricing: Pricing is based on the value provided rather than the number of devices or users. This model aligns costs with the business outcomes achieved. It focuses on delivering measurable results, such as increased efficiency, enhanced security, or improved uptime.

Key Types and Examples of MSPs

Managed service providers can focus on a range of service types. Here are some examples of common MSP services.

Managed IT Services

Managed IT services cover a range of IT support functions, including system monitoring, software updates, and technical support. These services ensure that IT infrastructure runs smoothly and efficiently, minimizing downtime and addressing issues proactively. 

MSPs offer extensive support that includes network management, server maintenance, and application support, ensuring that all aspects of a customer’s IT environment are optimized for performance and reliability.

Managed Security Service Providers (MSSPs)

MSSPs specialize in cybersecurity services, protecting customers from cyber threats through continuous monitoring, threat detection, and incident response. They implement and manage security protocols, ensuring compliance with regulatory requirements and protecting sensitive data. 

MSSPs provide services such as security information and event management (SIEM), vulnerability management, penetration testing, and security awareness training for employees. By using advanced technologies and expertise, MSSPs help companies stay ahead of evolving cyber threats and maintain a strong security posture.

Managed Help Desk

Managed help desk services provide technical support to end-users, addressing issues related to software, hardware, and network connectivity. These services improve user satisfaction and productivity by ensuring timely resolution of technical problems. 

MSPs offer various support channels, including phone, email, and live chat, providing users with convenient access to assistance. They also implement ticketing systems to track and manage support requests efficiently, ensuring that issues are resolved in a timely manner and preventing recurring problems through root cause analysis and continuous improvement.

Network Management

Managed network services involve the design, implementation, and management of network infrastructure. MSPs ensure network performance, reliability, and security, handling tasks such as configuration, monitoring, and troubleshooting. 

They provide services such as network optimization, bandwidth management, and Wi-Fi maintenance, ensuring a resilient and efficient network to support the customer’s operations. By proactively managing network components, MSPs help prevent outages and ensure connectivity for all users.

Managed Cloud Services

Managed cloud services help organizations migrate to, manage, and optimize their cloud environments. MSPs provide support for cloud infrastructure, including storage, computing resources, and applications, ensuring scalability and efficiency. 

They assist with cloud strategy, deployment, and ongoing management, offering services such as cloud cost optimization, performance monitoring, and disaster recovery. MSPs also ensure that cloud environments are secure and compliant with industry regulations, helping minimize risks.

Managed Backup and Disaster Recovery Services

These services focus on data protection and business continuity. MSPs implement backup solutions and disaster recovery plans to protect data and ensure rapid recovery in the event of data loss or system failure. This minimizes downtime and protects against data breaches and other disruptions. 

MSPs offer comprehensive solutions that include automated backups, offsite storage, and regular testing of recovery procedures. They work with customers to build customized disaster recovery plans that address specific needs and ensure that critical data and systems can be restored quickly, maintaining business continuity and protecting against potential losses.

Learn more in our detailed guide to managed backup services (coming soon)

Challenges of Working with Managed Services Providers

While MSPs can offer a convenient way to access some capabilities, they can also introduce several challenges:

• Limited visibility and control of activities: When outsourcing IT management to an MSP, organizations often relinquish direct oversight, which can lead to a lack of awareness of in-house teams about ongoing operations and potential issues.
• Lack of physical presence: While many IT issues can be resolved remotely, certain problems, such as hardware failures or physical network issues, require on-site support. Without a local presence, resolving these issues might be difficult and take longer.
• Potential upselling: MSPs often engage in upselling, recommending additional services or upgrades that might be useful for the client. Organizations need to carefully consider the value and ROI of additional services, or this can lead to increased costs and budget overruns.

How to Choose a Managed Service Provider

When evaluating MSPs, organizations should implement the following steps.

Assess What the Organizations Needs

Conduct a thorough assessment of the organization’s IT needs. Identify which services are essential for operations, such as network management, cybersecurity, or cloud services. This assessment should consider both current needs and future growth plans to ensure the chosen MSP can scale their services accordingly. 

Evaluate the existing IT infrastructure, identify gaps or weaknesses, and determine the areas where an MSP can add value. This assessment should involve input from various stakeholders within the organization to ensure all critical needs are addressed.

Establish a Budget

Determine a clear budget for managed IT services. This includes both the direct costs of the MSP’s services and potential indirect costs such as implementation fees or necessary infrastructure upgrades. Having a well-defined budget helps in selecting an MSP that offers the best value within the organization’s financial constraints. 

Additionally, understanding the budget limits can help prevent overspending and ensure a sustainable investment in IT management. Consider both short-term and long-term costs, including potential savings from reduced downtime, increased efficiency, and avoided in-house staffing expenses. A detailed cost-benefit analysis can provide a clearer picture.

Evaluate MSP Experience

Evaluate the experience and expertise of potential MSPs. Look for providers with a proven track record in managing IT environments similar to that of the organization. Consider their industry-specific knowledge, certifications, and the qualifications of their technical staff. 

Experienced MSPs are more likely to understand the unique challenges of the relevant industry and provide tailored solutions that meet each client’s business needs. Additionally, review case studies and client testimonials to gauge their success in handling projects and resolving issues. 

Inquire About Response Times

Consider the MSP’s response and resolution times for different types of issues. Understand their process for handling emergencies and their availability for support, particularly outside regular business hours. An MSP with a strong commitment to timely responses and a support structure can reduce downtime and enhance the IT system’s reliability. 

Request specific details about their SLA commitments regarding response times and resolution processes. Additionally, consider conducting a trial period or a pilot project to evaluate their actual performance in real-world scenarios.

Understand Contract Terms

Review the contract terms carefully before committing to an MSP. Ensure that the Service Level Agreement (SLA) clearly defines the scope of services, performance standards, and the consequences of not meeting those standards. Pay attention to the contract’s duration, termination clauses, and any penalties for early termination. 

A transparent and fair contract helps establish a trustworthy relationship and sets clear expectations for both parties. Additionally, consider the flexibility of the contract in terms of scaling services up or down based on changing business needs. 

Look for References and Reviews

Request references from potential MSPs and seek out reviews from other clients. Speaking with current or past clients can provide useful insights into the MSP’s reliability, service quality, and customer satisfaction. Online reviews and testimonials can also help gauge the provider’s reputation and performance. 

This feedback is essential for making an informed decision and selecting an MSP that aligns with the organization’s needs and expectations. Look for patterns in feedback, both positive and negative, to identify potential strengths and weaknesses. Additionally, consider reaching out to industry peers or professional networks for recommendations and insights into reputable MSPs.

Cynet: The Ultimate Cybersecurity Platform for MSPs

Cynet is a comprehensive cybersecurity platform for service providers. It streamlines cybersecurity by combining multiple critical security functionalities into a single, multitenant platform. This integration enables Cynet to offer endpoint, user, network, and SaaS security features that would typically require multiple products to achieve.

The platform features advanced capabilities such as Next-Generation Antivirus (NGAV), Endpoint Detection and Response (EDR), User Behavior Analytics (UBA), network analytics, deception technology, and Software-as-a-Service (SaaS) Security Posture Management (SSPM). These tools work together to detect and eliminate hidden threats. Cynet’s platform also includes automated incident resolution capabilities. It utilizes customizable playbooks and a range of remediation actions, enabling threats to be automatically resolved without manual intervention.

Additionally, Cynet supports its platform with the CyOps Managed Detection and Response (MDR) team. This team provides 24/7 monitoring of customer environments to quickly address any suspicious activity and respond to inquiries from both service providers and their clients. The multitenant nature of the platform makes it especially suitable for Managed Service Providers (MSPs) and Managed Security Service Providers (MSSPs), making it easy to manage services across multiple clients.

Learn more about Cynet for MSPs