Managed Service Providers (MSPs): An Expert Guide

A critical IT outage during peak hours can bring business operations to a standstill— your employees struggle to resolve issues, customers face delays, and revenue takes a hit.

Over 90% of mid-size and large enterprises report that a single hour of downtime now costs them more than $300,000. This is where managed service providers (MSPs) step in.

By offering 24/7 monitoring, proactive issue resolution, and advanced cybersecurity, MSPs prevent disasters before they happen.

By 2025, 60% of organizations will rely on managed services support to drive digital transformation. This guide explores what an MSP in IT is, the growing importance of MSPs for IT teams, and much more.

Understanding MSPs: What is an MSP in tech?

A managed service provider (MSP)is a third-party company that remotely manages an organization's IT infrastructure and services.

Managed service IT providers handle tasks such as network monitoring, cybersecurity, cloud management, data backup, and IT support, allowing businesses to focus on their core operations without worrying about technical challenges.

Instead of waiting for IT problems to occur and fixing them later (like the old break-fix model), MSPs proactively manage, monitor, and secure your IT infrastructure, preventing issues before they impact your operations.

What MSPs actually do

Common MSP business functions include:

• Proactive monitoring and issue resolution: MSPs continuously track network performance to prevent downtime. For example, if an e-commerce company faces slow response time on their shopping page due to huge traffic, the MSP detects the issue in real time and reallocates resources to restore performance before sales are impacted.

• 24/7 IT support and helpdesk services: Businesses receive around-the-clock assistance for IT issues. For instance, an online banking system or application facing crashes can immediately contact the MSP’s helpdesk for remote troubleshooting, ensuring minimal disruption to operations.

• Remote work enablement: MSPs manage secure remote access for distributed teams. An IT services firm can rely on an MSP to set up VPNs and multi-factor authentication (MFA) to enable employees to work securely from any location.

• Cybersecurity and compliance management: MSPs safeguard businesses against cyber threats while ensuring regulatory compliance. A healthcare or health insurance provider working with patient data benefits from an MSP implementing HIPAA-compliant security measures, including data encryption and cyber threat monitoring.

MSPs in 2025

The managed service provider industry has evolved from simple break-fix IT support to a proactive, full-scale technology management solution.

In the early days, businesses relied on IT technicians only when problems arose. This often led to frequent downtimes and high costs.

By the 2000s, remote monitoring and management (RMM) tools allowed MSPs to offer proactive IT support, reducing downtime and improving efficiency.

The rise of cloud computing, cybersecurity threats, and regulatory compliance further increased their demand.

Today, MSPs provide cybersecurity, cloud management, AI-driven automation, and compliance solutions, helping businesses scale efficiently. As companies continue prioritizing security and innovation, MSPs are now an essential part of modern IT strategy, with the industry set for continued growth.

In-house IT vs. MSP

Managing IT in-house requires dedicated personnel, ongoing training, and investment in infrastructure, making it both costly and resource-intensive, internal teams often struggle with scaling IT operations, handling cybersecurity threats, and keeping up with evolving technology.

On the other hand, partnering with an MSP provides access to specialized expertise, industry best practices, and enterprise-grade tools at a predictable cost. MSPs handle everything from routine maintenance to cybersecurity and cloud management, freeing businesses from the burden of IT complexities. This allows organizations to focus on growth initiatives without being sidetracked by day-to-day IT challenges.

Additionally, MSPs can recommend and implement the right technologies tailored to business needs. By outsourcing IT management, companies benefit from proactive monitoring and rapid issue resolution, which is difficult to achieve with an in-house team.

What are the benefits of working with an MSP?

Managing IT in-house can be a daunting task, often pulling focus away from your core business activities.

That’s because some of the daily IT challenges businesses face include:

• Cybersecurity threats: The rise of sophisticated cyber attacks, such as ransomware, poses a significant risk. In 2024, ransomware accounted for nearly 25% of all cyber incidents, with some organizations paying up to $75 million to attackers.

• System downtime: Unexpected IT outages can bring operations to a standstill. A notable example is the 2024 CrowdStrike-related IT outage, where a faulty software update led to approximately 8.5 million systems crashing worldwide, causing an estimated $5 billion in financial damage.

• Compliance complexities: Keeping up with evolving industry regulations requires constant vigilance and expertise, which can be challenging for internal teams.

Here’s how MSPs help with these challenges:

Proactive monitoring and support

MSPs offer 24/7 monitoring. This way, they prevent issues by continuously monitoring networks, applications, and devices.

For instance, they use real-time alerts and AI-driven diagnostics to detect performance bottlenecks, security vulnerabilities, and hardware failures before they escalate.

Using automated incident response systems and remote troubleshooting ensures swift resolution, minimizing downtime and keeping businesses operational.

Robust cybersecurity measures

Cyber threats are becoming increasingly sophisticated, targeting businesses of all sizes. MSPs deploy multi-layered security strategies, including advanced threat detection, endpoint protection, and intrusion prevention systems.

They conduct regular vulnerability assessments, apply automated security patches, and implement zero-trust frameworks to safeguard sensitive data. Additionally, MSPs train your employees on cybersecurity best practices, reducing the risk of human error leading to security breaches.

Cost optimization

Managing IT internally often leads to unpredictable costs due to infrastructure costs.

MSPs can help you optimize IT expenses by consolidating services under a predictable monthly pricing model. They implement cloud-based solutions to eliminate costly on-premise hardware, automate routine tasks to reduce labor costs, and optimize software licenses to prevent overspending.

This structured approach results in lower operational costs and improved IT efficiency.

By converting unpredictable IT expenses into fixed monthly fees, MSPs help reduce IT costs by 25–45% and improve operational efficiency by up to 65%.

Regulatory compliance

Keeping up with compliance regulations like GDPR, HIPAA, and PCI-DSS requires constant vigilance. MSPs streamline this process by implementing automated compliance tracking, encryption protocols, and audit-ready reporting.

They ensure that your data storage, access control, and security policies align with industry regulations, reducing the risk of non-compliance fines and data breaches.

Scalable solutions

As your business expands, your IT needs evolve. MSPs provide scalable cloud solutions, virtualized environments, and automated deployment strategies to accommodate growth seamlessly.

They manage everything from cloud migration to implementing remote work solutions to support growing business operations.

Types of managed service providers (MSPs)

Different MSPs offer varying levels of IT support based on business needs. Understanding these types can help organizations choose the right partner for their IT operations.

1. Pure-play MSPs

These MSPs provide basic IT support services such as monitoring, troubleshooting, and helpdesk assistance. They primarily serve small businesses that need foundational IT support without the complexities of advanced infrastructure management.

How they help:

• 24/7 system monitoring to detect and resolve IT issues

• Helpdesk support for software, hardware, and network troubleshooting

• Basic cybersecurity protection, such as firewalls and antivirus solutions

2. Cloud-based MSPs

Cloud MSPs specialize in cloud computing services, helping businesses migrate to, manage, and optimize cloud environments like AWS, Microsoft Azure, or Google Cloud. They ensure scalability, security, and cost efficiency in cloud operations.

How they help:

• Assist in cloud migration and deployment with minimal downtime

• Optimize cloud costs and ensure resource efficiency

• Provide security solutions such as encryption, identity management, and backup services

3. Cybersecurity MSPs

These MSPs focus on securing IT environments by offering advanced threat detection, compliance management, and risk mitigation strategies. They are essential for businesses dealing with sensitive data or operating in highly regulated industries.

How they help:

• Implement multi-layered security measures such as firewalls, intrusion detection, and endpoint protection.

• Conduct vulnerability assessments and security audits.

• Ensure regulatory compliance with industry standards like GDPR, HIPAA, and PCI DSS.

4. Full-service MSPs

Full-service MSPs offer comprehensive IT management, covering network infrastructure, cloud services, cybersecurity, and end-user support. They cater to mid-to-large enterprises needing complete IT outsourcing.

How they help:

• Manage all aspects of IT, from network administration to data security.

• Provide strategic IT consulting and digital transformation guidance.

• Reduce IT costs by offering a predictable, subscription-based model.

5. Specialized MSPs

Some MSPs focus on specific industries such as healthcare, finance, or retail, offering customized IT solutions that align with sector-specific compliance and operational needs.

How they help:

• Provide tailored IT solutions that meet industry regulations.

• Offer industry-specific applications and infrastructure support.

• Ensure secure handling of sensitive data, such as patient records or financial transactions.

Selecting the right managed service IT provider

Finally, how do you determine if an MSP is the right fit for your business? Let's break it down:

Experience and industry fit

Does the MSP have expertise in your industry? A provider with expertise in your industry understands its unique challenges, compliance requirements, and best practices.

Evaluate their client portfolio, ask about relevant case studies, and request references from businesses similar to yours. Look for an MSP that offers tailored solutions rather than a one-size-fits-all approach.

Scalability

Can the provider accommodate your growth needs? Your IT needs will evolve as your business grows, so your MSP should be capable of scaling services accordingly.

Assess whether they offer flexible pricing models, cloud-based solutions, and infrastructure support that can adapt to increased workloads.

Security measures

What cybersecurity protocols does the MSP offer? Cybersecurity should be a top priority, and an MSP must provide robust protection against potential threats.

Ask about their security frameworks, encryption protocols, and incident response plans.

Customer support and SLAs

Does the MSP provide 24/7 support with clear Service Level Agreements (SLAs)? Reliable customer support ensures minimal downtime and quick issue resolution.

Review the provider’s SLAs for response and resolution times, and verify their availability—24/7 support is essential for businesses operating in multiple time zones.

Freshservice fulfills all of these aspects and excels in this role. It's an ideal MSP that helps IT teams streamline employee service requests, reduce response times, and improve operational efficiency.

Key features and solutions of Freshservice

✅ AI-driven ticketing: Automates issue resolution, reducing response times and improving efficiency ✅ IT asset management: Tracks, manages, and optimizes IT resources to reduce costs and prevent downtime ✅ Automated workflows: Enhances productivity with intelligent automation, ensuring seamless IT operations ✅ Integrated service management: Centralizes IT support across multiple clients with multi-tenant capabilities ✅ Security and compliance: Implements robust cybersecurity measures and ensures regulatory compliance ✅ Advanced analytics and reporting: Provides actionable insights to track performance and improve service quality. ✅ Seamless integrations: Works effortlessly with third-party apps and tools for a connected IT ecosystem

Future-proof your business with Freshservice

The modern business landscape is fast, digital, and unforgiving—companies that fail to optimize their IT operations risk falling behind. Managing IT in-house is not only costly and complex but also distracts from core business priorities.

This is where managed service providers (MSPs) become success drivers, offering proactive IT management, robust security, and seamless scalability to keep businesses ahead of disruptions.

Freshservice empowers MSPs with an AI-driven, intuitive, and scalable IT service management (ITSM) solution, ensuring seamless IT support and operational efficiency.

Don't let IT complexities slow down your business growth. Whether you need managed services for small businesses or large enterprises, we have got you covered. Empower your MSP with Freshservice today and experience seamless IT operations, enhanced security, and unmatched efficiency.