Managed services is the practice of outsourcing the responsibility for maintaining, and anticipating need for, a range of processes and functions, ostensibly for the purpose of improved operations and reduced budgetary expenditures through the reduction of directly-employed staff.[1][2][3] It is an alternative to the break/fix or on-demand outsourcing model where the service provider performs on-demand services and bills the customer only for the work done.[4][5]

Advantages and challenges edit

Adopting managed services is intended to be an efficient way to stay up-to-date on technology, have access to skills and address issues related to cost, quality of service and risk.[6][7][8] As the IT infrastructure components of many SMB and large corporations are migrating to the cloud,[9] with MSPs (managed services providers) increasingly facing the challenge of cloud computing, a number of MSPs are providing in-house cloud services or acting as brokers with cloud services providers.[10][11] A recent survey claims that a lack of knowledge and expertise in cloud computing rather than offerors' reluctance, appears to be the main obstacle to this transition.[12][13] For example, in transportation, many companies face a significant increase of fuel and carrier costs, driver shortages, customer service requests and global supply chain complexities. Managing day-to-day transportation processes and reducing related costs come as significant burdens that require the expertise of Transportation Managed Services (or managed transportation services) providers.[14][15]

History and evolution edit

The evolution of MSP started in the 1990s with the emergence of application service providers (ASPs) who helped pave the way for remote support for IT infrastructure. From the initial focus of remote monitoring and management of servers and networks, the scope of an MSP's services expanded to include mobile device management, managed security, remote firewall administration and security-as-a-service, and managed print services. Around 2005, Karl W. Palachuk, Amy Luby, Founder of Managed Service Provider Services Network acquired by High Street Technology Ventures, and Erick Simpson, founder of Managed Services Provider University, were the first advocates and the pioneers of the managed services business model.[16][17]

The first books on the topic of managed services: Service Agreements for SMB Consultants: A Quick-Start Guide to Managed Services[18] and The Guide to a Successful Managed Services Practice[19] were published in 2006 by Palachuk and Simpson, respectively. Since then, the managed services business model has gained ground among enterprise-level companies. As the value-added reseller (VAR) community evolved to a higher level of services, it adapted the managed service model and tailored it to SMB companies.

In the new economy, IT manufacturers are currently moving away from a "box-shifting" resale to a more customized, managed service offering. In this transition, the billing and sales processes of intangible managed services, appear as the main challenges for traditional resellers.

The global managed services market is expected to grow from an estimated $342.9 Billion in 2020 to $410.2 Billion by 2027, representing a CAGR of 2.6%.[20]

Types edit

In the information technology area, the most common managed services appear to evolve around connectivity and bandwidth, network monitoring, security,[21] virtualization, and disaster recovery.[7] Beyond traditional application and infrastructure management, managed services may also include storage, desktop and communications, mobility, help desk, and technical support. In general, common managed services include the following applications.

Name Functions Providers
Information services / Cloud * Software – production support and maintenance
* Authentication
* Systems management
* Data backup and recovery
* Data storage, warehouse and management
* Cloud transformation
* Network monitoring, management and security
* Human Resources and Payroll
IT managed services provider
HCM Platforms
Business-to-business integration * Supply chain management
* Communications services (mail, phone, VoIP)
* Internet
* Videoconferencing
Internet service provider,
Video managed services provider
Supply chain managed services[22] * Supply chain planning, monitoring and control
* Sourcing and procurement
* Logistics and distribution
Supply chain managed services provider
Transportation[23] * Daily transportation planning
* Process execution and enforcement (freight audit/accounting & payment)
Managed transportation services provider
Marketing * Marketing strategy, planning

* Integrated marketing / advertising agency services

(graphic design, copywriting, PPC, social media, web design, SEO)

Marketing managed services provider, outsourced marketing providers
Media * Systems operation and support services
* Broadcast managed services
Media managed services provider
Water[24] * Water quality testing
* Water storage and transfer systems management
* Smart irrigation monitoring, scheduling
Water managed services provider
Power[25] * Advanced metering infrastructure
* Smart grid deployments
Power managed services provider

Provision edit

Definition edit

A Managed IT Services Provider[26] (also known as an 'MSP') is a third-party service provider that proactively monitors & manages a customer's server / network infrastructure, cybersecurity and end-user systems against a clearly defined Service Level Agreement (SLA). Small and medium-sized businesses (SMBs), nonprofits and government agencies hire MSPs to perform a defined set of day-to-day management services so they can focus on improving their services without worrying about extended system downtimes or service interruptions. These services may include network and infrastructure management, security and monitoring..[27][28] Most MSPs bill an upfront setup or transition fee and an ongoing flat or near-fixed monthly fee, which benefits clients by providing them with predictable IT support costs. Sometimes, MSPs act as facilitators who manage and procure staffing services on behalf of the client. In such context, they use an online application called vendor management system (VMS) for transparency and efficiency. A managed service provider is also useful in creating disaster recovery plans, similar to a corporation's.[29]

The managed services model has been useful in the private sector, notably among Fortune 500 companies,[30] and has an interesting future in government.[31]

Main players edit

Main managed service providers originate from the United States (IBM, Accenture, Cognizant), Europe (Atos, Capgemini) and India (TCS, Infosys, Wipro).

Company Country 2017 revenue[needs update]
IBM   United States $79bn
Accenture   United States $35bn
Cognizant   United States $18bn
Tata Consultancy Services   India $18bn
Atos   Europe $16bn
Capgemini   France $15bn
Infosys   India $10bn
Wipro   India $8.5bn
HCL Technologies   India $7bn
ATEA   Europe $4.7bn
Computacenter   United Kingdom £4.4bn
Datapipe   United States $2.4bn
ALTEN   France $2.4bn

See also edit

References edit

  1. ^ "Inside Outsourcing: More Bad News from Business Regulation?". The Brookings Institution. November 1996. Archived from the original on 31 January 2022.
  2. ^ "Introduction to Managed Services" (PDF). CA Technologies. September 2012.
  3. ^ Palachuk, Karl (January 2013). Managed Services in a Month. Great Little Book Publishing Co., Inc. p. 208. ISBN 978-0981997858.
  4. ^ OryxAlign. "An Insight Into IT Service Delivery: Traditional Break-Fix vs A Managed Service" (PDF). Archived from the original (PDF) on 2017-02-02. Retrieved 2016-03-28.
  5. ^ Nimsoft Guest (5 March 2010). "How Break/Fix Can Break Your Managed Services Business". MSPMentor. Archived from the original on 7 July 2017. Retrieved 28 March 2016.
  6. ^ Randy Perry (June 2013). "Business Value of Managed Services" (PDF). IDC.
  7. ^ a b Sarah Kuranda (4 June 2014). "Top Five Functions Outsourced To Managed Services". CRN Magazine. Archived from the original on 16 July 2018. Retrieved 28 March 2016.
  8. ^ Robert Peretson (2011). "Managed Services:The Win-Win Model for Your IT Support Success" (PDF). MSP Business Management.
  9. ^ Wood, J.B.; Lah, Thomas. "The Case for Managed Services: A Stepping Stone to the Cloud". Technology-as-a-Service Playbook. Technology Services Industry Association.
  10. ^ Spencer Smith (February 2016). "Managed services companies rethink their portfolios". TechTarget.
  11. ^ David Linthicum (19 May 2015). "The case for managed service providers in your cloud strategy". InfoWorld.
  12. ^ "Making the Transition from VAR to MSP" (PDF). CA Technologies. October 2014.
  13. ^ John Moore (May 2015). "Cloud-based service revenue lags among MSPs". TechTarget.
  14. ^ Steve Banker (11 February 2014). "A Holistic Approach to Transportation Managed Services". Forbes.
  15. ^ Adam Robinson (2 September 2014). "What are Managed Transportation Services? The Old Model vs. The New Model". CERASIS. Archived from the original on 22 March 2016. Retrieved 28 March 2016.
  16. ^ "MSPmentor 250 List 2014: Honorees N to P". MSPMentor. 2015. Archived from the original on 2017-06-27. Retrieved 2016-03-28.
  17. ^ "MSP Partners Recognizes Outstanding Contributions in Managed Services". BusinessWire. 7 August 2008.
  18. ^ Palachuk, Karl (July 2011). Service Agreements for SMB Consultants. Great Little Book Publishing Co., Inc. ISBN 978-0976376026.
  19. ^ Simpson, Erick (15 August 2006). The Guide to a Successful Managed Services Practice. Intelligent Enterprise. p. 320. ISBN 978-0978894306.
  20. ^ "IT Outsourcing - Global Market Trajectory & Analytics". Global Industry Analysts, Inc. April 2021. Retrieved 2021-09-21. Amid the COVID-19 crisis, the global market for IT Outsourcing estimated at US$342.9 Billion in the year 2020, is projected to reach a revised size of US$410.2 Billion by 2027, growing at a CAGR of 2.6% over the analysis period 2020-2027.
  21. ^ Chloe Green (7 March 2016). "How to use managed services to overcome the top 6 app security hurdles". Information Age.
  22. ^ "Supply Chain Managed Services". Deloitte. 2015.
  23. ^ Adam Robinson (22 September 2014). "What are Managed Transportation Services? The Old Model vs. The New Model". CERASIS. Archived from the original on 22 March 2016. Retrieved 28 March 2016.
  24. ^ "Managed services". Water Centric. 2015.
  25. ^ Dan Pegan (16 July 2014). "The Growing Trend of Managed Services for Advanced Metering". Electric Light and Power.
  26. ^ "What is a Managed Service Provider (MSP)?". SearchITChannel. Retrieved 2022-03-10.
  27. ^ Margaret Rouse (2015). "Managed service provider (MSP)". TechTarget.
  28. ^ "Top ten criteria for selecting a managed services provider" (PDF). IBM Global Technology Services. 2015.
  29. ^ "Cloud Data Backup & IT Disaster Recovery Solutions". Retrieved 2023-06-23.
  30. ^ Joe Panettieri (23 April 2012). "60% of Fortune 500 Companies Running ManageEngine". MSPMentor. Archived from the original on 2 February 2017. Retrieved 28 March 2016.
  31. ^ Casey Morgan (4 June 2015). "IT Managed Services in the Public Sector". storagecraft. Archived from the original on 2 February 2017. Retrieved 28 March 2016.

Further reading edit