Managed Services Provider

A managed services provider (MSP), is typically an information technology (IT) services provider, who manages and assumes responsibility for providing a defined set of services to their clients either proactively or as they (not the client) determine that the services are needed. Most MSPs bill a flat or near-fixed monthly fee, which benefits their clients by providing them with predictable IT support costs.

Many MSPs now provide many of their services remotely over the Internet rather than having to perform on-site client visits, which is time consuming and often expensive. Common services provided by MSPs include remote network, desktop and security monitoring, patch management and remote data back-up, as well as technical assistance.

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Managed Services

The business model behind managed services was commonplace among enterprise level companies, provided by large IT support companies such as EDS (Electronic Data Systems), IBM Global Services, and Centerbeam. The model was later adapted to fit small to medium sized companies by the value-added reseller (VAR) community as their existing model of reselling hardware and software continually provided lower profit margins.

Managed Services Providers typically offer several price structures. Most commonly used is a per-month fee, but MSPs may also charge using a time and material model as well as price per desktop, server, or network device. For this fee they will monitor their client's IT infrastructure and resolve any issues that arise within it. This provides peace of mind and predictable costs for the client, as well as predictable revenues for the MSP. Managed services are often looked at as a way for small and medium sized businesses to outsource their IT needs at a lower cost than building an in-house IT support department.

MSPs have found difficulty in capturing all of their time and materials revenue due to time management. Engineers are people of action by default. Documentation and time entry are the last task in their responsibilities. Getting these employees in a mind set of entering time is very difficult. On average for every billable person that a managed services company employs, there is at least one 15 minute call or remote issue that was performed where no time was documented- at least 2 times per week. At an average bill rate of $100/hr; (for the sake of easy math) that is $50 of revenue per person per week not being reported. $2500.00 per person per year. If a firm has four people, they are losing 10k a year in lost revenue from 2 fifteen minute give-aways per week per person. This is why a flat fee billing model is mutually beneficial for clients and MSPs.

One major challenge that MSPs faced was in changing from the reactive break-fix model to which they were accustomed into the new proactive managed services model, particularly because this model represented a major shift in the industry. Many early adopters struggled to properly convey the benefits of managed services to their existing break-fix clients. Many continue to service break-fix clients even though it is in their best interest to make the shift to managed services only.

As the buzz around Managed Services and MSPs grew within the IT support community, some early adopters attempted to make their service available to other, emerging, MSPs allowing them to slowly transition to an MSP model while still enjoying revenue from a time and materials billing model. Some of these providers began marketing themselves as Master Managed Service Provider.

According to the Institute for Partner Education & Development, most established Managed Services Provider's revenues come from delivering contracted recurring services onsite or remotely. Including any combination of hardware and software in a managed services solutions as well as an ASP (Application Services Provider) model.

Managed Services

At NIXSYS, you'll find a dedicated and accomplished sales and service team. Our job starts by evaluating and selecting both the latest and time-tested technologies. This includes a selection of best MSP tools. We'll help you adjust options to your specific project requirements, and we'll give you the service you need to get functional and stay functional.

Got questions about Manage Services? Don't hesitate and Contact us today.

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Managed Services Provider