What are managed IT services?

Managed IT services are information technology tasks that are outsourced to a third-party vendor. Common managed IT services include: 

• Managing a client’s digital help desk
• Monitoring the health and security of client networks
• Overseeing software installations and updates
• Implementing business continuity and disaster recovery (BCDR) protocols

Small- to medium-sized businesses (SMBs) can leverage these services on a subscription basis to elevate their companies to the same level as the industry giants in their field at a fraction of the cost. 

With the help of third-party IT service management, businesses can keep their critical networks, endpoints, and data operating smoothly and securely, without the high upfront costs, infrastructure, or talent required to handle these systems in-house.

The managed IT services model

Managed service providers (MSPs) support a company’s technology needs through ongoing IT support that may include setup, installation, configuration, and monitoring of a company’s networks and endpoints. Unlike the reactive IT services of the past, modern MSPs will proactively assess a client’s IT infrastructure for potential threats and opportunities for improvement. They will then provide a plan of action, which may include a combination of software solutions and services, to improve their digital architecture and security posture. 

MSPs typically offer services at a flat, recurring rate in tiered levels. As service levels increase, clients receive greater automation and management per their specified service level agreement (SLA). Customers, or end users, can commit to the level of service that meets their business needs, but always have the opportunity to shift their service packages as business needs or demands change. 

IT managed services enable partners to run their businesses more smoothly and efficiently than otherwise possible. Additionally, they offer software-as-a-service (SaaS)-based solutions at a price that in-house options can’t beat. 

MSPs vs. internal IT staff

Contrary to popular thought, managed IT services do not necessarily make internal IT professionals obsolete. For the end user, an IT professional can act as an endpoint liaison who manages the relationship, delivers feedback, and analyzes the reports the MSP provides. In the context of outsourced NOC or SOC services, the MSP works as an extension of the main team, helping to address issues and accelerate service delivery without the end user even knowing.

Because the MSP completes most of the routine work, the internal IT professional can tackle more extensive, complex projects they would otherwise not have the time or capacity to handle. Freeing up these workforce resources makes MSPs a valuable resource to businesses of any size and during any stage of growth. Co-managed services also add another dimension to this, with the teams being able to work together to resolve issues in many cases.

History of managed IT services

At the outset of enterprise computing, information technology services and management operated on a break/fix model. A technician would fix computer systems only after they stopped working. Often, this technician was the same person who built or installed the computer system. 

This method of maintenance was time-consuming, labor-intensive, costly, and reactive. It left little room for the technician to grow their business or take on new clients without massive investments in labor and infrastructure. 

Over time, the number of computers in the overall marketplace would continue to increase exponentially year after year. The gap between technicians and the number of computers they could reasonably service grew wider and wider.

As a result, managed IT services emerged to meet this need in the early 2000s, upending the traditional break/fix model. This new approach to IT centered on proactive maintenance, upgrades, system monitoring, and issue resolution on a routine basis—preventing problems before they start.

Efficiency, consolidated resources, and client satisfaction—coupled with fixed rates, the ability to offer greater service offerings, and the capacity to take on more clientele—led to managed IT becoming the industry-standard approach to managing computer systems large and small for SMBs.

Managed IT services categories

There’s a broad spectrum of services MSPs can provide for their customer base. Ultimately, the menu of services should depend on the objectives, the target audience, and the business structure. Here are examples of the different managed IT services categories MSPs can operate in. 

Cybersecurity

Cybersecurity management solutions are an essential part of a MSP’s service offerings, especially as the threat landscape continues to evolve. Key aspects of these services include:

• Handling software updates and patch management
• Installing antivirus and anti-malware platforms 
• Meeting industry compliance standards (when necessary)
• Implementing access controls like multi-factor authentication (MFA)
• Educating end users on cybersecurity best practices
• Conducting risk assessments to routinely evaluate clients’ cyber defenses

The comprehensive cybersecurity management software and solutions available today make it possible for MSPs to provide cybersecurity support in-house. However, MSPs that lack the internal expertise or resources to support this service offering may opt to pursue a strategic partnership with a managed security service provider (MSSP) to elevate their security offerings.

Cloud services

Cloud services help clients to take their existing infrastructure and make it virtual, and there’s been a mass exodus from legacy on-prem IT assets to cloud-based architecture in recent years. And while it’s a necessity to stay competitive these days, transitioning to the cloud can be a massive undertaking.

MSPs can guide their clients through every step of the transition to a cloud environment by offering a number of services, from implementing cloud-based remote monitoring and management (RMM) software to cloud app security.

Remote monitoring and management (RMM)

RMM software allows MSPs to proactively and remotely monitor and optimize client networks and endpoints. This can help with performing routine tasks, assessing network health, and other tasks without disrupting regular operations. 

Supporting a client’s network encompasses any routers, switches, firewalls, and connectivity resources that keep their operation running smoothly. An MSP’s job is to take a proactive approach to network support via monitoring to ensure they maximize a client’s uptime and take the daily minutia of network management off their plate. 

Specific services an MSP might offer as a part of RMM solution could include:

• Patching – Simplify the deployment, approval, and scheduling of patches for clients with the help of network support software tools. MSPs can also help them adhere to any mandatory industry compliance standards.
• IT automation – Monitor devices, identify and troubleshoot IT problems, and help clients streamline their IT support. 
• IT asset discovery – Assist clients in detecting and keeping an accurate inventory of network devices. MSPs can also deploy agents to manage client endpoints if the network is large enough. 

Business continuity and disaster recovery (BCDR)

BCDR software solutions help clients prepare for drastic events such as natural disasters, data breaches, and cyberattacks by reducing downtime and expediting recovery of data. There are a variety of services MSPs can provide to help with this facet of their business including performing routine system tests, managing data backups, and implementing disaster recovery procedures.

Having a straightforward plan of action is essential not just to preserve client operations, but in some cases, as a matter of legal compliance. For more information about this, check our MSP's Guide to BCDR.

Benefits of managed IT services

The biggest corporations in the world make IT a priority. They can build out first-class internal IT teams because they pull in the revenue needed to cover the costs. As a result, SMBs face the challenge of finding a solution to fill that gap and level the playing field. When put in this position, smart business owners leverage managed IT services.

Here is a quick rundown of what managed IT services can deliver for clients.

Reduce IT spending

With the help of MSPs, SMBs can reap the benefits of IT support at a much lower cost than creating a comparable internal team. SMB owners can pay for the services they need, allowing them to scale as needed.

Contracting managed IT services to an MSP also makes internal budgeting and expense tracking easier. Organizations can forecast their monthly, quarterly, and yearly expenditures on IT since the costs of MSP subscription packages are generally fixed and consistent. This frees SMBs to focus on more mission-critical tasks like business development or marketing.

Leverage expert knowledge

Another benefit of managed IT services is the breadth of expertise MSPs can bring to a client organization. These professionals possess in-depth expertise on things like effective cybersecurity policies, industry compliance, and knowledge from real-world experience. 

An MSP’s intricate cybersecurity and regulatory compliance knowledge are invaluable tools for mitigating a client’s risk. As the go-to experts in charge of a company’s managed IT support, MSPs are always up to date on the latest information, technologies, and processes that will keep infrastructures working efficiently and successfully well into the future. 

Regulatory compliance is mandatory for some business sectors, like finance, healthcare, and education. Strict regulations that govern data management, storage, and overall cybersecurity in these industries require the expertise and experience that a managed IT company can provide.

MSPs regularly work with standards such as Payment Card Industry (PCI) compliance and can advise an organization on the parameters and regulations for their industry. Additionally, MSPs often have more cybersecurity management experience than in-house teams because they manage security for multiple clients. 

Bridge the talent gap

Additionally, high-level IT roles are becoming more challenging for companies to fill internally. The worldwide tech marketplace is experiencing a talent gap at never-before-seen levels. Companies are struggling to find quality talent to fill tech roles within their company. In many cases, these openings sit vacant for months on end. 

Bringing a third-party MSP on board may be an attractive, low-cost solution to bridge the gap during these difficult times. In time, the client may find them as a permanent solution for their IT needs.

Dependable service

Not only do clients experience the skills of an MSP, but they also benefit from their resources. Finding the skilled talent to build an internal IT team can be bad enough. Most business owners tend to forget that IT operations are resource-intensive as well.

Partnering with a third-party MSP can make services more dependable and reduce interruptions. Furthermore, vendor-client SLAs clarify what’s to be expected and when to expect it, making both IT services and utility services (electricity, internet, etc.) reliable.

Better operational efficiency

Bringing a third-party vendor on board to handle managed IT services could also boost client productivity. Their internal staff no longer needs to bog themselves down with tasks that aren’t the highest priority or best use of their time. With things like software patch updates, equipment monitoring and maintenance, and cybersecurity in the hands of true professionals, their teams can rest at ease and focus on what they do best.

Managed IT services pricing

A pricing strategy is just as important to MSP success as the menu of services and customer service. The wrong pricing model can make services seem cost-prohibitive and severely hinder revenue potential. It’s important to research pricing strategy considerations and pitfalls and make an informed choice about what’s most profitable.

The four basic MSP pricing structures are:

• Tiered: A package-based subscription pricing model with different service levels, tiered pricing can help support effective upselling through bundling services. 

• Á la carte: Much like a restaurant menu, á la carte means clients choose and pay only for the services they want.  The average cost of this pricing model is $30 to $100 per service per device (which can add up quickly). 

• Per user: The most common model, clients are charged a fixed price per user per month which is inclusive of all end users’ devices.

• Per device: Pricing revolves around a flat fee for each endpoint device (computers, servers) on your client’s network. These devices could be computers, mobile devices, tablets, or servers. Average prices vary based on the devices in question.

For more information on pricing, check out our eBook, Pricing IT Services: A Complete Guide.

Best practices for selling managed IT services

Managed services are the bread and butter of any MSP’s offerings. Whether you are looking to build a strong program or refine their existing one, here are a few best practices to keep in mind:

• Documentation: There are a couple of levels of documentation to consider. First, document the structure of the organization, planned services to offer, and the overall MSP strategy. Secondly, document any repeatable processes within the business. Entering these in detail will eventually showcase areas that may need to be outsourced or automated in the future.

• Planning: Examine things from the client perspective. What services or tools do they need? Also, consider their schedule when running tests or diagnostics. The goal here is to provide the best service possible while keeping business disruptions to a minimum.

• Service management structure: MSPs can lean on several IT service management (ITSM) frameworks to standardize their workflow. The Information Technology Infrastructure Library (ITIL) has a managed IT services structure MSPs can use to keep their workflow organized and increase their operational capacity. 

• Talent acquisition and management: Focus on building a client-centric team of high-quality professionals. The right team adds value to MSP offerings and helps them stand out from the competition. In situations where finding this talent is difficult, consider strategic outsourcing to bolster internal teams.
• Double down on cloud services: Thousands of companies worldwide rely on cloud architecture in today’s business marketplace. Providing cloud services as part of MSP packages will be a value-add to clients and ultimately helps sales and marketing teams close new business. 

Managed IT services tools for MSPs

MSPs have come a long way from the early days of managed IT services. Now, these experts have a range of IT expertise and tools to resolve issues efficiently. And with AI security and robotic process automation (RPA) elevating IT practices to new heights, MSPs can support more clients than ever before using ever-evolving processes, tools, and software.

ConnectWise offers a suite of software solutions designed to support MSPs in providing modern software solutions to their clients. From cybersecurity management to remote monitoring and management, take a live tour of the ConnectWise platform to learn how ConnectWise can help take your business to new heights.