Managed Service Providers (MSPs): Expert Guide

Business computing today is complex and critical, and it becomes more so daily. Every modern business relies upon IT to survive and must leverage IT to grow and evolve. And there can only be digital transformation with adequate, business-enabling IT. Meanwhile, IT is evolving at breakneck speed as new technologies change how everyone buys everything.

Public, private, and hybrid cloud services are increasingly joined or supplanted by traditional premises-based IT resources. The commercial emergence and growth of technologies ranging from artificial intelligence (AI) and big data to Internet of Things (IoT) devices and services require new responses. Cybersecurity threats grow in sophistication and potential effects. Beyond these challenges, even as demand for IT-powered business services grows, skilled, experienced IT people are difficult and expensive to find, recruit, hire, and retain.

This is why so many companies look to modern, capable, managed service providers (MSPs) for help. The right MSP can provide the additional skills, experience, knowledge, and resources your business needs, even as those needs and cloud resources evolve. Let’s dive into some background about MSPs, as well as details and recommendations to help you work with MSPs successfully.

What is a Managed Service Provider (MSP)?

An MSP, or Managed Service Provider, is a trusted partner supporting your in-house IT department. They offer a range of IT management services on an ongoing basis, typically through a subscription model – operating as a one-stop shop for all your IT needs, delivered remotely by a team of experienced professionals.

How do MSPs work and how can they help with IT?

Feeling overwhelmed by the ever-growing demands of your IT infrastructure? Managed Service Providers (MSPs) offer a strategic solution to free your internal IT team and empower your business. An MSP acts as an extension of your in-house IT department, providing an extensive list of services from network management and security to Cloud solutions and even ongoing support.

By partnering with an MSP, you gain access to a team of experienced IT professionals who can proactively monitor your systems, identify and address issues before they disrupt your workflow, and ensure your technology stays up-to-date and aligned with your business goals — freeing up your internal IT staff to focus on strategic initiatives and projects that drive innovation and growth for your company.

By outsourcing tasks to an MSP, your organization can lighten the load on internal IT resources to focus on core business objectives and strategic initiatives.

Let’s zoom in on the full range of IT services that MSPs offer, including:

• Network Management and Security: MSPs monitor and maintain your network infrastructure, ensuring its stability and security.

• Cloud Solutions: Many MSPs offer cloud-based solutions for tasks like data storage, email, and applications.

• Help Desk Support: MSPs provide ongoing technical support to your employees, resolving issues and answering questions.

• Data Backup and Disaster Recovery: MSPs ensure your data is backed up securely and can be recovered during a disaster.

• Systems Monitoring and Maintenance: MSPs proactively monitor your IT systems for potential problems and perform routine maintenance to keep them running smoothly.

A cloud-based MSP solution for all your IT needs

• Traditionally, businesses have managed their IT infrastructure on-site, requiring significant upfront investment in hardware, software, and IT personnel. Cloud-based solutions offered by MSPs revolutionize this approach by leveraging the power of remote servers and applications. 

  This translates into several key benefits for your business:

  • Scalability and flexibility: Cloud solutions are inherently scalable, allowing you to easily adjust your IT resources up or down as your business needs evolve. No more worrying about over-provisioning or under-provisioning hardware – you simply pay for what you use.

  • Enhanced security: MSPs prioritize robust security measures within their cloud infrastructure. This includes features like automatic backups, disaster recovery plans, and constant monitoring for threats, ensuring your data and applications remain protected.

  • Improved accessibility: Cloud-based IT services are accessible from anywhere with an internet connection. Work productively from the office, at home, or on the go.

  • Reduced costs: Cloud solutions eliminate the need for significant upfront capital expenditures on hardware and software. 

  • Automatic updates and maintenance: Cloud-based systems ensure your applications and software are always up-to-date with the latest security patches and features.

History of MSPs

Managed services emerged in the 1990s as businesses increasingly relied on complex IT infrastructures. In-house IT departments often struggle to keep pace with rapid technological advancements and the growing demands of a globalized marketplace. To solve this issue, MSPs were created as a cost-effective way for businesses to access the expertise and resources needed to manage their IT effectively.

Who uses MSPs?

Managed Service Providers cater to a broad range of organizations of all sizes and capabilities. They are precious for:

• Small and medium-sized businesses (SMBs): SMBs often lack the budget to hire a full-time IT staff. MSPs provide a cost-effective way to access the IT expertise they need.

• Large enterprises: Large enterprises may benefit from outsourcing specific IT functions to an MSP. This allows them to free up internal IT resources to focus on strategic initiatives.

• Organizations with limited IT expertise: Some organizations may not have the in-house IT knowledge to manage their infrastructure effectively. MSPs provide the necessary expertise to ensure their IT systems run smoothly.

What do MSPs do?

By outsourcing tasks to an MSP, your organization can lighten the load on internal IT resources to focus on core business objectives and strategic initiatives.

Let’s zoom in on the full range of IT services that MSPs offer, including

• Network management and security: MSPs monitor and maintain your network infrastructure, ensuring its stability and security.

• Cloud solutions: Many MSPs offer cloud-based solutions for data storage, email, and applications.

• Help desk support: MSPs provide ongoing technical support to your employees, resolving issues and answering questions.

• Data backup and disaster recovery: MSPs ensure your data is backed up securely and can be recovered in the event of a disaster.

• Systems monitoring and maintenance: MSPs proactively monitor your IT systems for potential problems and perform routine maintenance to keep them running smoothly.

Types of MSPs

The world of MSPs isn't one-size-fits-all.  Different providers cater to varying client needs and offer a range of services. Here's a breakdown of the three main types of MSPs:

Pure-play MSPs

Pure-play MSPs focus solely on delivering managed IT services - they specialize in remote IT management and offer a comprehensive suite of services, including network management, security, cloud solutions, help desk support, and ongoing maintenance. Typically, they target small and medium-sized businesses (SMBs) that lack the resources for a dedicated IT team.

Here's what you can expect from a pure-play MSP:

• Standardized Services: They offer a menu of predefined service packages that cater to common business needs.

• Scalability: Their cloud-based approach allows them to scale their services easily as your business grows.

• Cost-Effectiveness: Their subscription model provides predictable IT costs.

Staffing legacy MSPs

As the name suggests, legacy MSPs primarily focus on providing IT staffing solutions and can supplement your existing IT team with qualified personnel or even build an entire IT department from the ground up. 

Here's how a staffing legacy MSP can boost your IT personnel potential:

• Customized Staffing Solutions: They tailor their staffing offerings to match your specific IT skill gaps and project requirements.

• Flexibility: You can choose temporary or permanent staffing solutions depending on your needs.

• Access to a Talent Pool: They leverage their network to find qualified IT professionals who can quickly integrate with your team.

High-level MSPs

High-level MSPs offer the most comprehensive range of services, acting as a strategic partner for your entire IT infrastructure. They go beyond basic IT management and provide strategic consulting, business process optimization, and IT roadmap development. 

Check out what high-level MSP services make the biggest impact:

• Strategic Partnership: They work closely with your leadership team to understand your business goals and align your IT strategy accordingly.

• Advanced Services: They offer specialized services like cloud migration, security architecture design, and business continuity planning.

• Custom Solutions: They develop tailored solutions to address your unique IT challenges and opportunities.

What software does a Managed Service Provider use?

Managed Service Providers (MSPs) rely on a powerful suite of software tools to efficiently manage and deliver IT services to their clients. These tools can be broadly categorized into four main areas:

• Remote monitoring and management (RMM): This software forms the backbone of an MSP's operations. It allows them to remotely monitor and manage client IT infrastructure, including servers, desktops, network devices, and applications. An RMM tool like IT Infrastructure Management provides features like:

  • Automated patch management: Ensures all client systems are updated with the latest security patches to minimize vulnerabilities.

  • Real-time monitoring: Provides constant visibility into the health and performance of client systems, allowing for proactive problem identification.

  • Remote control: Enables technicians to access and troubleshoot client systems remotely, improving resolution times.

• Professional services automation (PSA): This software streamlines the business operations of an MSP. A PSA tool, like Service Management offers a wide range of functionalities:

  • Ticketing system: Provides a centralized platform for tracking and resolving client support requests, ensuring efficient communication and issue resolution.

  • Project management: Enables the MSP to organize and manage client projects effectively, with features like task scheduling, resource allocation, and reporting.

  • Customer portal: Creates a self-service portal for clients to submit tickets, track their progress, and access knowledge base articles, improving client satisfaction.

• Security and backup software: Security is paramount for any MSP. They utilize robust security software to protect client data and systems from cyber threats. Additionally, backup and disaster recovery software ensures critical client data is always secure and readily recoverable.

• Additional tools: Beyond these core categories, MSPs may leverage a variety of additional tools to enhance their service offerings. This could include cloud management solutions, collaboration tools, and business intelligence platforms, depending on the specific needs of their clients.

Common obstacles to MSP success

While the demand for their services remains high, there are certain challenges that can hinder their success. By approaching these obstacles with a spirit of adaptation and innovation, MSPs can help you overcome them with ease.

MSPs: changing roles and definitions

Clients are increasingly seeking strategic partners who can go beyond basic IT management and offer consultative services aligned with their business goals. While this role remains fluid, it requires MSPs to refine their services and invest in their expertise to stay ahead of the curve.

The future is “cloudy” for MSPs

While cloud solutions provide services and improved scalability, they also require a shift in skillsets and the ability to manage complex,  multi-cloud environments. By embracing cloud-based solutions and developing the necessary expertise, MSPs can position themselves as valuable cloud migration and management partners for their clients.

Beyond the cloud: optimism and caution for MSPs

While the cloud is a dominant force, it's important for MSPs to remain versatile – leaving room for on-premise infrastructure and legacy systems in many businesses. By offering a hybrid approach that combines cloud solutions with the management of on-premise systems, makes for a smooth and secure IT environment for clients.

MSP best practices

The Managed Service Provider (MSP) landscape is full of opportunity. By implementing these best practices, you can position your company for exceptional growth and solidify your role as a trusted IT partner for your clients:

• Focus on customer success: Prioritize building strong relationships with your clients. Understand their unique business needs and tailor your service offerings to achieve their specific goals.

• Invest in your team: Your team is your greatest asset. Recruit and retain top-tier IT talent with diverse skill sets. Provide ongoing training and development opportunities to ensure your team stays ahead of the evolving technology curve.

• Embrace automation: Leverage automation tools to streamline service delivery and improve efficiency. Automate tasks like routine patching, system monitoring, and report generation to free up your team's time for higher-value activities like strategic planning and client consultations.

• Cloud expertise is king: The cloud is the future of IT. Develop a deep understanding of cloud solutions and platforms. Invest in building the necessary skills within your team to become a trusted cloud migration and management partner for your clients.

• Security is paramount: Cybersecurity threats are constantly evolving. Implement robust security protocols and prioritize data protection. Regularly assess your clients' security posture and offer comprehensive security solutions to mitigate risks and ensure business continuity.

• Embrace a “Hybrid World” approach: While cloud adoption is accelerating, on-premise infrastructure remains a reality for many businesses. Develops the expertise to manage both cloud and on-premise environments seamlessly.

• Metrics matter: Track key metrics to measure your success and identify areas for improvement. Monitor client satisfaction, service desk performance, and operational efficiency. Use data-driven insights to optimize your service offerings and ensure you're delivering the most value to your clients.

• Stay informed and agile: The IT landscape is constantly changing. Continuously educate yourself and your team on emerging technologies and industry best practices. Embrace a culture of innovation and agility to adapt to evolving client needs and stay ahead of the competition.

MSP pricing models

Managed Service Providers (MSPs) offer a variety of pricing models to cater to diverse client requirements, so understanding these models allows you to choose the option that best aligns with your business needs and budget.

Per device

A straightforward model where you are charged a fixed monthly fee for each device  (computer, server, printer, etc.) an MSP manages. It's proven to be easy to understand and budget for, making it a popular choice for businesses with a predictable number of devices.

• Pros: Simple, transparent pricing. Easy to scale up or down as your device count changes.

• Cons: May not be cost-effective for businesses with a mix of device types or complex IT needs.

Per user

Similar to per-device, this model charges a flat monthly fee per user who accesses your IT network. It's suitable for organizations with a consistent number of users, regardless of the number of devices they use.

• Pros: Easy to budget for and manage. Scales well with changes in user base.

• Cons: May not account for variations in user needs (e.g., power users vs. basic users).

All inclusive

Offers a fixed monthly fee for a predefined bundle of services. The all inclusive bundle typically includes core IT management functions like network monitoring, security services and potentially backup and disaster recovery.

• Pros: Predictable costs and simplified budgeting. Provides peace of mind with comprehensive coverage.

• Cons: May not be suitable for businesses with specific needs outside the included services. Limited flexibility in terms of service customization.

Tiered

This model offers multiple service tiers at different price points. Each tier includes a gradually increasing range of services, which allows businesses to choose the level of support that best suits their needs and budget.

• Pros: Provides flexibility and customization options. Clients only pay for the services they need.

• Cons: Comparing tiers and service inclusions can be complex. May require careful planning to ensure you're selecting the right tier.

Monitoring only

Focuses solely on remote network and device monitoring. This MSP proactively identifies and alerts you to potential issues, but may not include services like help desk support or patch management.

• Pros: Cost-effective option for businesses with internal IT staff who can handle troubleshooting and remediation.

• Cons: Requires additional in-house IT resources to address identified issues. Limited support for resolving problems.

<h2>The Service Level Agreement (SLA): an essential part of any MSP relationship</h2>

A Service Level Agreement (SLA) is a formal document that outlines the specific services the MSP will provide, the performance metrics used to measure those services, and the remedies available if service levels are not met.

A well-crafted SLA fosters a strong and mutually beneficial partnership between you and your MSP. Check out our full list of SLA best practices before you start drafting your own.

MSPs: Help for today and the future

By carefully selecting an MSP and establishing a clear SLA, you gain a valuable partner that can:

• Free up your internal IT team: Allow your in-house IT staff to focus on strategic initiatives and projects that drive innovation.

• Reduce costs: MSPs offer a cost-effective way to manage your IT infrastructure.

• Improve security: MSPs prioritize robust security measures to protect your data and systems.

• Increase efficiency and uptime: Proactive monitoring and maintenance minimize downtime and ensure your systems run smoothly.

Stay ahead of the curve: MSPs have the expertise to help you adopt and leverage emerging technologies to gain a competitive advantage.

Freshservice: your cloud services partner

Freshservice, as a leading provider of cloud-based IT service management solutions, empowers businesses of all sizes to harness the potential of the cloud. By partnering with Freshservice, you gain access to a comprehensive suite of tools dedicated to keeping your IT operations running smoothly, securely, and efficiently.

Whether you're looking to streamline IT management, enhance security, or equip your employees with self-service capabilities, Freshservice offers a scalable and cost-effective solution from multiple angles:

Streamlined IT service management:

• Automated workflows: Freshservice allows MSPs to automate repetitive tasks such as ticketing, provisioning, and password resets, freeing up technicians' time to focus on more strategic initiatives.

• Centralized platform: Manage all your clients' IT needs from a single platform, improving efficiency and visibility for your team.

• Scalability and customization: Freshservice adapts to the unique needs of each MSP, regardless of size or client base.

Enhanced client support:

• Self-service portal: Empower clients to resolve common issues independently through a user-friendly self-service portal.

• SLM compliance: Ensure you meet Service Level Agreements (SLAs) with automated alerts and reporting features.

• Improved communication: Facilitate better communication with clients through ticketing, surveys, and integrated chat functionalities.

Robust security and visibility:

• Role-based access control: Maintain granular control over user permissions and data access for enhanced security.

• Detailed reporting: Gain valuable insights into IT service performance and identify areas for improvement.

• Compliance management: Simplify compliance tasks with built-in features and integrations to ensure adherence to industry regulations.

Additional MSP-specific features:

• Contract management: Manage client contracts electronically, track key dates, and automate renewal processes.

• Multi-tenancy: Provide secure, isolated environments for each client, at a premium level of data privacy and security.

• Powerful integrations: Extend Freshservice's functionality by integrating with popular PSA and RMM tools used by MSPs.