What is a Managed Service Provider, and Why Should You Hire One?

What is a Managed Service Provider, and Why Should You Hire One?

Business owners probably feel like they're in the clutches of a cruel twist of fate these days. At a time when it's increasingly difficult to run an efficient, profitable business without a solid IT staff and IT infrastructure, there's a serious tech talent shortage.

Businesses must vie for employees to manage these absolutely critical systems. Yet, the median wage for tech employees hovers around $85,000 a year. That prices most tech workers right out of the budgets of many small businesses.

In the face of the need for tech skills and the inability to pay for them, many businesses enlist a managed service provider to help them cope with their IT needs.

That begs two questions. What is a managed service provider? Why should you hire one? Let's start with the first question before jumping into the reasons you should hire one.

What Is a Managed Service Provider?

A managed service provider offers tech services, such as device or infrastructure support. The term managed service provider can prove somewhat nebulous, with customers and MSPs setting different expectations.

As a general rule, MSPs work with the technology a business already owns. The MSP may install software that helps them monitor performance and establish parameters. Depending on your exact needs and the equipment in use, the MSP may adjust settings, update firmware/software, and engage in other best practices.

Some MSPs will provide hardware and perform the setup. These services typically come as a la carte options that you pay for separately. If they do come as part of a service plan, it's typically in a top tier plan with premium pricing.

A few of the more common service offerings include:

  • network monitoring
  • backup services
  • disaster recovery
  • server migration
  • cloud services
  • VoIP

Every MSP offers a slightly different range of services. That means you must select one based on your specific IT needs and their specific offerings.

Cost Reduction

One of the biggest reasons most businesses hire an MSP is cost reduction. Since no tech worker can provide expertise in every area, you must either hire an IT team or contract work out as it crops up.

At the above mentioned $85,000 a pop for tech workers, a team isn't a realistic option for many businesses. Contracting the work out can prove just as expensive if you need tech work carried out on a regular basis.

An MSP will typically work on some form of flat fee structure. They may choose a per device, per user, or full-service model. In each case, though, the fees remain flat, which lets you project total cost for a quarter or a year.

Since the MSP does most of its work remotely, they can hire a team and spread the expertise around to multiple clients. By stacking clients and engaging in practical automation of routine tasks, they can charge enough collectively to afford the workers and still provide reliable services to you. 

Refocus on Your Core Competencies

Most businesses don't specialize in technology. They specialize in providing some other service or product.

Let's say that you provide cleaning services to local businesses. You probably know everything about cleaning solutions, floor buffers, and finding employees who can work those night shifts.

Your core competencies all relate very specifically to cleaning and managing employees to do that cleaning. If you spend half of your time banging your head against IT problems, you aren't focused on your core competencies. It's a lose-lose situation.

Your core business suffers because you don't devote all of your time to working on it. Your IT systems suffer because you lack the depth of skills necessary to manage them to best effect.

Outsourcing your IT needs to an MSP lets you focus all your attention on the parts of the business you do know best.

Shift Risk

When you manage your own IT systems in-house, you assume all the risk. The tech landscape is in a constant state of change.

Do you handle medical information? How sure are you that you're in compliance with the current HIPAA regulations?

Do you do business with European customers? Are you in compliance with the GDPR regulations?

An MSP knows for sure if they're in compliance because it's their business to know. If they don't keep up-to-date and a client comes up on the wrong side of a government crackdown, they can expect their business to go under very soon.

Of course, it never hurts for you to ask some pointed questions before you pay for the service. It's ultimately still your responsibility to protect customer data after all.


Scalability often proves a serious challenge for businesses. Scalability of your tech often requires a substantial investment in hardware that you may not use. A truly scalable system requires processing power, memory, and bandwidth that far exceeds your current level of demand.

The money you invest in all of that is money you can use on things you need in the near term.

If you work with an MSP, scalability is part of the service. Let's say they provide you cloud services that host your online software. Your software gets featured in an article in a major business magazine.

The demand skyrockets. Since your MSP serves a lot of clients, they must build out a very robust infrastructure. You can typically scale up with nothing more than a click of a mouse in your account settings.

You get the extra service you need when you need it with a comparatively modest cost increase in your subscription plan.

Parting Thoughts on What Is a Managed Service Provider

Answering the question what is a managed service provider is fairly simple. An MSP fills the IT skills gap in your business when you can't afford a full, in-house IT team.

It lets you get back to focusing on your business with confidence that your IT needs get met with professional skill.

Preactive IT Solutions provides managed IT services for businesses. For more information about our services, contact Preactive IT Solutions today.