Understanding Managed Services

Managed services in the IT world can be described as the outsourcing of specific IT functions and applications to an offsite provider. This outsourcing is done for a number of reasons, both economic and technical, that we will address in this series of articles.

What Are Managed Services?

In the IT shop, a managed service is an IT task for which the day‐to‐day responsibility has been transferred to an outside organization. The service is offered by a Managed Service Provider (MSP) who is contractually obligated to deliver the service at the level specified by the contract.

What Is an MSP?

An MSP offers a specific application or set of applications to the IT customer. The MSP offering is, in most cases, an end‐to‐end application filling a specific need that is delivered via the Internet over the customer's existing network‐based infrastructure. As Figure 1 shows, the service offering has the Internet as its delivery mechanism, allowing it to be used at any site with Internet access. In many cases, MSP will offer services tailored to any Internet connection speed.

The contracted service is managed, maintained, upgraded, and delivered to the users as if it was a local service, and may include both hardware and software on the client‐side. The basic idea is to deliver a service that the IT customer could not afford, in terms of money, time, or personnel, to implement as a standalone solution within their own infrastructure.

Figure 1: Managed services delivery.

How Do Managed Services Work?

The specifics of how a managed service works vary depending upon the service being provided, but the basic structure goes as follows:

  • Managed service is contracted
  • A site survey is performed to assure the ability to deliver the service by the MSP
  • Customer‐side components are installed—This can range from a simple piece of software installed on client computers to complex hardware installations at the client site configured to communicate to the provider; the amount of client IT support required at this point is determined by contract
  • Configuration and communications are completed and configured
  • Service is turned "on" for the client
  • Ongoing operations are managed by the MSP.

The key component of the process is that the responsibility for keeping the service available is that of the MSP. The customer IT‐related responsibilities will generally be laid out in the contract, but in most cases, will require little more than assuring a network connection is available from the client site and that client computers run supported operating systems (OSs).

How Managed Service Fits in Your Business

Managed services fit in by allowing IT to deliver services that they might not otherwise be equipped or budgeted to provide. From the perspective of the users within the enterprise, the service is provided by and is the same as any IT service that they are currently using.

Common Managed Services

Unsurprisingly, managed service offerings fall into two basic categories: tasks every business does and tasks that provide significant value‐add but are difficult for smaller businesses to implement. There is some crossover between the two categories. In the first category, you'll find tasks such as backup, storage, and email. These tasks are easily supported, usually require little more than agent or client software be installed on each computer (or, as in the case of MSP‐provided email services, that the existing email client be configured to work with the new server), and can be utilized by both end user knowledge workers and IT staff.

The second category is comprised of the more complex tasks: disaster recovery, business continuity, systems management, and network management. These tasks are very IT focused and take on responsibilities that would otherwise require significant internal IT resources, in terms of both time and money. In some cases, the provided services require very specific levels of technological expertise that can be very expensive to maintain internally, especially for smaller companies.

You will also find MSPs that offer a completely different approach to the process, providing a complete knowledge worker solution that is maintained, managed, and run offsite. This setup is accomplished by using some form of terminal services, where the client uses a remote display protocol to operate a virtual client that resides on the MSP's servers. In this type of MSP model, the complete user environment is maintained remotely and is unavailable if the user has no Internet connection. Conversely, it is available from anywhere the user can make a secured Internet connection. This approach is usually applied to a very specific set of business circumstances, such as geographically dispersed employees.

Key Benefits of Managed Services

The primary benefit to IT of managed services is the simplification of the delivery and management of a significant component of the business infrastructure. It also allows IT departments to invest in the areas of the business that they are managing internally without the need for often‐expensive specialized skills required to deliver the same level of service that an MSP can provide.

Key benefits include:

  • Faster service implementation—There is no longer a need to build a complete service infrastructure before delivering a service in‐house. The MSP‐offered service can be quickly and efficiently implemented and deployed.
  • Better utilization of existing resources—Internal IT resources don't need to be retrained or redistributed to provide and support the new service offering.
  • More secure and reliable IT service—Security and reliability of the MSP offering are contractually guaranteed and don't require internal IT resources.
  • Improved flexibility and responsiveness—Offering MSP services means that IT can expand the technical services offered to users and more quickly adapt to changing business needs using internal and external resources combined.

Understanding the Process

From the initial decision to implement a managed service in your computing environment to the continuing operation and management of the service, choosing and using an MSP is an ongoing process. The most important factor in selecting an MSP is to develop a thorough understanding of your business processes and how IT generally, and the selected MSP service specifically, will fit into your business model.

Once you have defined the need exactly, you will be able to select an MSP that is able to offer you what you need with the most flexibility. It is likely you will find that making use of the MSP‐delivered service will increase your business flexibility and expand the eventual requirements for the MSP service. Keep this goal in mind when choosing an MSP.

How Managed Services Are Implemented

The implementation of your selected managed service e is a multi‐step process designed to ensure that the service you have contracted for meets your business needs. At its most basic, the process is purely internal, with IT determining what service they need (off‐site backup, for example) and determining which MSP offers what the business needs at the most competitive value.

More complex services, such as systems management, disaster recover, or business continuity MSP offerings will require a much closer relationship with the MSP services vendor. These services will need tasks such as vendor site surveys; detailed understanding of the affected services, networks, and users; and the maintenance of an ongoing close relationship between the business and the MSP.

The Client‐Vendor Relationship

Most important with the more complex MSP offerings, the relationship between client and MSP vendor is a critical one. Because these services become such an integral part of ongoing business operations, the business needs to select a vendor that is able to deliver on the contracts, is able to quickly respond to the changing business environment (client and server OS changes, application upgrades, security patches, and so on), and provides simple and straightforward means of communication to allow the MSP customer to change and upgrade their services as needed to meet their business needs.


Managed services can fill existing needs of the business customer and offer the ability to implement IT process that would otherwise be out of the reach of smaller businesses. Managed services are not a "be all, end all" solution for customers but an effective tool for IT to expand the range of service options that can be offered to their users.

For IT users in the SMB space, managed service should definitely be part of the evaluation process when considering adding new services or updating existing services. Weighing the cost and benefits of fully internalized solutions versus the possibility of using an MSP to deliver parts of the IT infrastructure that can effectively be outsourced allows IT the ability to best maximize budgets, both in dollars and manpower.