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Understanding MSPs: Managed Service Providers Explained

by Marcin Wieclaw
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what is an msp

Welcome to our article series on Managed Service Providers (MSPs)! In this section, we will introduce you to the world of MSPs and help you understand what exactly they are and what they do. So, let’s dive in and explore the fascinating realm of MSPs and their significance in the modern business landscape.

So, what is an MSP? A Managed Service Provider is a third-party company that specializes in remotely managing an organization’s IT infrastructure and end-user systems. They handle a wide range of day-to-day management services, including network and infrastructure management, security, and monitoring. MSPs are experts in various IT segments and vertical markets, offering services such as data storage, security, and managed print.

MSPs play a pivotal role in organizations by providing expertise, filling staff shortages, and improving cost efficiency. They assess the organization’s environment, offer different service options, and deliver services based on Service Level Agreements (SLAs). There are various types of MSPs categorized by the size of their target customers and the type of services they offer.

Throughout this article series, we will delve deeper into the world of MSPs, exploring their key features, benefits, challenges, and pricing models. So, stay tuned and enhance your understanding of the vital role MSPs play in today’s rapidly evolving technology landscape.

What is a Managed Service Provider?

A managed service provider (MSP) is a third-party company that remotely manages a customer’s IT infrastructure and end-user systems. They offer a defined set of day-to-day management services, including network and infrastructure management, security, and monitoring. MSPs specialize in specific segments of IT or vertical markets, such as data storage or healthcare.

MSPs handle management services on a daily basis, allowing customer organizations to focus on improving their services without downtime or interruptions. They can perform their tasks remotely over the internet, providing services like remote firewall administration and managed print services.

The evolution of MSPs began in the 1990s with the emergence of application service providers (ASPs). Today, the terms cloud service provider and managed service provider are sometimes used interchangeably.

As MSPs are remote experts in managing IT infrastructure, they play a vital role in enabling organizations to optimize their IT systems and operations.

What are MSPs used for?

MSPs, or Managed Service Providers, play a crucial role in supporting various organizations, including small and medium-sized businesses (SMBs), nonprofits, and government agencies. SMBs often rely on MSPs to obtain the necessary IT expertise, as they may have limited in-house capabilities to handle complex IT tasks. Similarly, larger enterprises, facing budget constraints or limited hiring options, often contract with MSPs to supplement their in-house IT staff. By outsourcing IT management to MSPs, organizations can focus on their core business activities and improve their operations in various ways.

Benefits of MSPs:

  • Access to IT Expertise: MSPs bring specialized knowledge and experience to the table, providing SMBs and other organizations with access to a wide range of IT skills and resources. This partnership allows businesses to tap into the expertise of dedicated IT professionals without the expense of hiring a full in-house IT team.
  • Improved Efficiency: MSPs handle the management of IT infrastructure, such as network configuration and maintenance, ensuring smooth and reliable operations. They also provide technical support, helping organizations resolve issues quickly and minimizing downtime, which is crucial for maintaining productivity.
  • Enhanced Cybersecurity: MSPs play a vital role in securing organizations’ IT systems by implementing robust cybersecurity measures. They add cybersecurity software, set up firewalls, and regularly update security protocols, protecting organizations from cyber threats and reducing the risk of data breaches.
  • User Account Management: MSPs manage user access accounts, ensuring that employees have appropriate permissions and access to resources. This helps organizations maintain data privacy and control, preventing unauthorized access and potential security breaches.
  • Contract Management: MSPs help organizations navigate the complexities of IT contracts, ensuring that service-level agreements (SLAs) are met and providing guidance on licensing and vendor management. This frees up organizations to focus on their core business activities.
  • Compliance and Risk Management: MSPs assist organizations in meeting regulatory compliance requirements and mitigating potential risks. They stay up-to-date with the latest regulations and industry best practices, ensuring that organizations adhere to legal and industry-specific standards.
  • Payroll Services: Some MSPs also offer payroll services, simplifying the administrative burden for organizations. By incorporating payroll management into their IT services, MSPs streamline payroll processes and reduce the likelihood of errors.

Overall, MSPs provide organizations with the IT expertise they need, supplementing their in-house IT staff and allowing them to improve efficiency, boost cybersecurity, and focus on their core business activities.

benefits of MSPs

How do MSPs work?

MSPs play a crucial role in an organization’s IT system, filling in gaps and providing valuable support. Communication between the MSP and the organization begins with a comprehensive assessment of the current IT environment, identifying areas for improvement and aligning with business goals.

MSPs offer a range of service options to meet the specific needs of organizations. One option is technical support fix services, where MSPs remotely resolve issues or send technicians to address them. Another option is subscription services, which focus on delivering high-quality service with fixed rates per computer or equipment.

To ensure quality and accountability, MSPs operate on the basis of Service Level Agreements (SLAs). These agreements define performance expectations, quality metrics, and specifications for service delivery. By establishing clear SLAs, both the MSP and the organization have a shared understanding of the expected outcomes.

MSPs leverage various tools to efficiently manage IT systems. Remote Monitoring and Management (RMM) tools allow MSPs to perform off-site maintenance, monitoring, and troubleshooting. This enables them to proactively identify and address potential issues, minimizing downtime and disruptions.

Project Management and Professional Services Automation (PSA) applications are also used by MSPs to streamline workflows, manage projects, and maintain inventory. These tools enhance efficiency and help ensure that projects are executed smoothly and resources are effectively allocated.

Depending on their capabilities and partnerships, some MSPs offer native services, while others integrate services from different providers. This flexibility allows organizations to access a diverse range of solutions that best meet their specific IT requirements.

“MSPs provide organizations with the necessary expertise and resources to support their IT systems effectively. By leveraging tools, SLAs, and a range of service options, MSPs play a vital role in optimizing IT operations and ultimately driving business success.”

What are the types of MSPs?

MSPs, also known as managed service providers, can be categorized based on their target customers and the level of responsibility they take on. Understanding the different types of MSPs can help organizations choose the right provider that aligns with their specific needs and requirements.

Pure-play MSPs

Pure-play MSPs are smaller providers that specialize in monitoring networks and application performance. They focus on offering their own native services and excel in providing proactive support and ensuring optimal performance. These MSPs often have a niche expertise and are well-suited for organizations looking for highly specialized managed services.

Staffing legacy MSPs

Staffing legacy MSPs target midlevel organizations and Fortune 500 companies. They provide a wide range of services, including monitoring, reporting, software installation, and IT staffing. These MSPs often have extensive experience working with larger enterprises and can handle complex infrastructures and high-demand environments.

High-level MSPs

High-level MSPs offer comprehensive IT outsourcing solutions, enabling clients to outsource as much of their IT processes as needed. These MSPs provide a wide range of services, including network monitoring, remote support, proactive support, centralized management, scheduled maintenance, and simplified billing. High-level MSPs are ideal for organizations looking to have a strategic partner that can handle all aspects of their IT operations and provide end-to-end solutions.

MSP service categories

In addition to categorizing MSPs based on their target customers and level of responsibility, MSPs can also be differentiated based on the types of services they offer. Some common MSP service categories include:

  • Monitoring: MSPs that specialize in continuous monitoring of IT systems and networks, ensuring uptime and performance.
  • Remote support: MSPs that provide remote technical support, resolving issues without the need for on-site visits.
  • Proactive support: MSPs that focus on proactive maintenance and optimization to prevent issues before they occur.
  • Centralized management: MSPs that centralize IT management and provide a unified view of the organization’s IT environment.
  • Scheduled maintenance: MSPs that perform routine maintenance tasks, such as software updates and patches, on a regular schedule.
  • Simplified billing: MSPs that offer transparent and straightforward billing structures, making it easier for organizations to budget and manage IT costs.

Understanding the different types of MSPs and the services they offer can help organizations make informed decisions when selecting a managed service provider that best fits their needs.

MSP Type Description
Pure-play MSPs Smaller providers specializing in monitoring networks and application performance.
Staffing legacy MSPs MSPs targeting midlevel organizations and Fortune 500 companies, offering a wide range of services, including monitoring, reporting, and software installation.
High-level MSPs MSPs that provide comprehensive IT outsourcing solutions, offering a wide range of services such as network monitoring, remote support, and centralized management.

What are the benefits of managed service providers?

Managed service providers (MSPs) offer several benefits to organizations, helping them overcome challenges and maximize efficiency. Here are some key advantages of partnering with MSPs:

  1. Access to expertise:
    By collaborating with MSPs, organizations can tap into a pool of skilled professionals who bring specialized knowledge and experience. MSPs fill staff shortages by providing additional IT expertise, ensuring that organizations have access to the right skills when needed.
  2. Business continuity:
    MSPs play a crucial role in ensuring business continuity. By creating Service Level Agreements (SLAs) that document expectations and preparations for disasters, MSPs help organizations maintain smooth operations even during unexpected events. This proactive approach helps minimize downtime and enables organizations to focus on their core business activities.
  3. Constant network monitoring:
    MSPs offer continuous network monitoring services, ensuring that IT systems are constantly monitored for any security threats or performance issues. This constant vigilance helps improve security and provides organizations with real-time visibility into their IT infrastructure, allowing them to address potential issues promptly and prevent any disruptions.
  4. Cost efficiency:
    One of the significant benefits of engaging MSPs is the cost efficiency they provide. Instead of paying hourly rates for unplanned repairs, MSPs often offer fixed monthly charges, enabling organizations to budget effectively. This predictable pricing model helps organizations optimize their IT spending and avoid any unexpected financial burdens.
  5. Focus on core business:
    By entrusting day-to-day IT management to MSPs, organizations can redirect their resources and attention towards core business activities. This allows them to concentrate on service improvement, growth, and innovation, without the distractions and challenges associated with handling IT infrastructure and support.

Partnering with MSPs also grants organizations access to top technical and industry expertise, helping them stay up-to-date with technology advancements and industry trends.

“By leveraging the expertise and services of MSPs, organizations can focus on what they do best, while leaving the IT management and support in the hands of professionals.”

What are the challenges of managed service providers?

While managed service providers (MSPs) offer many advantages, there are also challenges that organizations need to consider. It’s important to be aware of these challenges to make informed decisions when choosing an MSP.

Lack of Security Measures

One of the key challenges organizations may face with MSPs is the lack of robust security measures. Some MSPs may not prioritize cybersecurity, putting organizations at risk of potential data breaches or other security incidents. It is crucial for organizations to thoroughly evaluate an MSP’s security practices and ensure they align with their own security requirements.

Reliance on MSPs

Organizations that heavily rely on MSPs for their IT infrastructure and management may face system downtime if the MSP fails to meet the service level agreements (SLAs) they have committed to. This reliance on MSPs can leave organizations vulnerable in situations where the MSP experiences technical issues or fails to provide the expected level of support.

Response Time

When issues arise, response time is critical. However, there may be delays in response time when organizations depend on MSPs for technical support or issue resolution. It is important for organizations to establish clear expectations and SLAs regarding response times to minimize any potential impact on their operations.

Potential Upselling

Another challenge organizations may face with MSPs is the potential for unnecessary upselling. MSPs may try to promote additional technologies or services that an organization may not actually need. It is important for organizations to have a clear understanding of their requirements and carefully evaluate any proposed additional services or solutions to avoid unnecessary expenses.

Increasing Security Risks with MSPs

What is the pricing model for managed service providers?

Managed service providers (MSPs) offer a range of pricing models to accommodate the diverse needs of organizations. One popular pricing model is per-device pricing, where an MSP charges a fixed fee for each device they manage. This model is suitable for organizations with a large number of devices that require continuous monitoring and management. Another option is per-user pricing, which charges a flat fee for each user, allowing organizations to include all devices used by that user.

For organizations looking for comprehensive IT support and management, MSPs offer all-inclusive pricing. Also known as the all-you-can-eat model, this pricing option charges a flat fee for all IT infrastructure support services, eliminating the need for individual device or user fees. This model provides organizations with predictable costs and ensures they have access to comprehensive IT support without worrying about the number of devices or users.

Alternatively, MSPs may offer tiered pricing. This pricing model allows organizations to choose from different service bundles based on their specific needs and requirements. Each tier offers a different set of services and features, allowing organizations to select the one that best aligns with their budget and IT goals. MSPs can also provide monitoring-only pricing, where they offer monitoring and alerting services without full management, ideal for organizations that want to complement their existing IT resources.


What is an MSP?

An MSP, or managed service provider, is a third-party company that remotely manages a customer’s IT infrastructure and end-user systems.

What services do MSPs offer?

MSPs offer a defined set of day-to-day management services, including network and infrastructure management, security, and monitoring.

How are MSPs used?

MSPs are used by organizations to fill staff shortages, obtain IT expertise, and improve cost efficiency by outsourcing IT management.

How do MSPs work?

MSPs work by assessing the organization’s environment, providing service options, and delivering services based on SLAs.

What are the types of MSPs?

MSPs can be categorized based on their target customers and the types of services they offer.

What are the benefits of MSPs?

MSPs provide benefits such as filling staff shortages, access to expertise, business continuity, and constant network monitoring.

What are the challenges of MSPs?

Challenges of MSPs include lack of security measures, reliance on MSPs, response time, and potential upselling.

What is the pricing model for MSPs?

MSPs typically use pricing models such as per-device pricing, per-user pricing, all-inclusive pricing, and tiered pricing.


  • Marcin Wieclaw

    Marcin Wieclaw, the founder and administrator of PC Site since 2019, is a dedicated technology writer and enthusiast. With a passion for the latest developments in the tech world, Marcin has crafted PC Site into a trusted resource for technology insights. His expertise and commitment to demystifying complex technology topics have made the website a favored destination for both tech aficionados and professionals seeking to stay informed.

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