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What Is an MSP? How It Compares with On-Site Support

Published on June 21, 2023

Est. Read Time 9 minutes

Published on June 21, 2023

Est. Read Time 9 minutes

What Is an MSP? How It Compares with On-Site Support

Published on June 21, 2023

Est. Read Time 9 minutes

Published on June 21, 2023

Est. Read Time 9 minutes

Written by Shannon Perry
Reviewed by Alex Koval

Written by Shannon Perry
Reviewed by Alex Koval

What exactly are managed service providers? Compare MSPs to on-site support to determine what your organization needs.

Managed service providers (MSPs) are becoming increasingly popular as a cost-effective option for companies lacking internal IT support. Whether due to budget constraints or choice, MSPs provide IT outsourcing services that can keep an organization compliant with local and global regulations and up to date on the latest technologies. MSPs are becoming so popular that by 2027, the industry is expected to reach over 311 billion USD by 2027 — an around 12% CAGR increase.

What is an MSP?

MSPs provide organizations with technology services like networking, infrastructure, security, and applications. These services are often provided in addition to or in place of an IT department. Here is a deep dive into managed service providers and their alternatives.

How Do MSPs Work?

Most commonly used by small and medium-sized businesses, MSPs typically operate as a third party providing both general and specialized IT support. They can function as consultants, providing one-time services, or they can provide ongoing services based on an organization’s needs.

Often, these services occur in one of two categories:

  • Recurring work. Some MSPs generate the vast majority of their revenue from ongoing services via a subscription model.
  • Hybrid. Other MSPs operate both with reoccurring work and by providing one-time project-based services. Most MSPs fall into this category. 

MSPs often have relationships with other service providers (such as on-site support providers, like Techmate). This allows IT departments to meet the company’s demands via resourcing.

Functions of an MSP

Are you considering an MSP? Here are the four most notable functions of managed service providers and how they can bolster or stand in for IT departments:

1. IT management and support. MSPs typically provide a remote help desk to troubleshoot IT issues for a company’s employees.
2. Network monitoring and security. MSPs might offer threat detection and response plus data backup and recovery.
3. Cloud services management. MSPs also offer various services related to cloud management, such as IaaS, PaaS, and Saas.
4. Support for a remote workforce. While MSPs offer support for seated, on-site staff, they also provide it for a remote or WFH workforce. This often includes mobile device management as well.

5 Benefits of Managed Services in IT

Third parties, like MSPs and staff augmentation providers, are invaluable resources for many businesses. For companies with an IT department that cannot support the organization’s needs, staff augmentation can be the answer to the day-to-day issues that IT professionals face. MSPs are an ideal option for companies that lack an IT infrastructure entirely to ensure that the company runs smoothly.
Here are the top five reasons CIOs should consider outsourcing some or all of their IT needs.

Cost Reduction and Control

Managed service providers and staff augmentation alike help companies save money in various ways. From downsizing IT infrastructures to improving productivity for your existing IT staff, utilizing external help for your tech needs is a cost-effective solution to the many IT challenges and problems large companies face.

Enhanced IT Security

Larger organizations with multiple sites and diverse work environments require a security operations center, ideally one that functions 24/7, to ensure that the company’s interests remain safe from internal and external threats. Cybercrime is becoming increasingly commonplace, and the cost can be high for targeted organizations.

Access to Expertise and Latest Technologies

A large MSP can train across more specialized skill sets than a single IT department. Rather than train your in-house staff on a particular piece of software that’s seldom used, for example, an MSP already has the necessary expertise. A staff augmentation provider like Techmate combines those same skill sets with in-person service from a local technician familiar with the community and your particular industry and situation.

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Increased Efficiency and Productivity

In some organizations, particularly those experiencing drastic change, IT staff may take on roles outside their typical responsibilities or have an increased workload. MSPs can help offset that by absorbing responsibilities that existing staff don’t have as much experience with or don’t have space for.

Scalability and Flexibility

MSPs that provide quality services and invest in their own companies are scalable, flexible, and adaptable to client needs. Quality MSPs should be able to determine your business objectives, the best technology to meet those objectives and provide a strategy with the best value while providing the services your business needs.
In some cases, that strategy and flexibility may be the result of another partnership. Staff augmentation is invaluable for internal IT teams, but it’s also utilized by MSPs that need specialized support with an in-person presence. Many MSPs have a remote-only approach, so partnering with on-site services is invaluable.

Potential Challenges of MSPs

While MSPs are an excellent option for many organizations, there are certain challenges that MSPs must overcome. Such as:

  • No, or limited, physical presence. Most MSPs operate as a remote service. For situations that require on-site expertise, MSPs aren’t able to provide a local presence (whereas on-site services can).
  • Lack of understanding. Your IT needs are holistically intertwined with your business goals and operations. External vendors without expertise in your industry cannot fully appreciate your needs.
  • Limited involvement. As an external service provider, MSPs aren’t part of your organization. Because of this, clients have limited managerial oversight of what may serve as a vital component of your organization — your IT team.

Managed Services vs. On-Site Services

On-site IT and managed services are often at odds in the minds of many IT professionals. The notion that companies can only have managed services when they don’t have an IT department is a misconception. Both managed service providers and on-site services, such as Techmate, can work with internal IT teams.
When an organization has an internal IT department, the role of managed services is to supplement existing staff rather than replace them. De-prioritized or incomplete tasks can be delegated to external IT staff. Both teams can work in tandem to increase efficiency and productivity and eliminate IT issues before they become serious problems.

Managed Services vs. Traditional IT

Like technology, IT services have evolved. Traditional external services, called “break-fix” services, would come in after a problem developed or hardware broke and try to fix it. This reactive form of service evolved into the managed services model of prevention — the idea is that an ounce of prevention is worth a pound of downtime and expensive repairs, though some companies still prefer the break-fix model.
A proactive approach to technology resolves minor IT issues quickly and efficiently before they become bigger problems that can cost organizations downtime and revenue.

Selecting the Right Provider

When choosing an IT service today, whether it’s an MSP or staff augmentation, look for affordable and predictable costs that can scale up to accommodate organizational changes. MSP pricing varies, so look for managed services that meet your organization’s unique needs at a price point that isn’t painful. Plus, make sure the provider is staffed with experienced field technicians.

Assessing Your Business Needs

Before shopping around for the right provider, you must understand your business needs. Ultimately, you may not need the services a managed service provider offers but instead staff augmentation. A firm understanding of your business needs allows you to select the right kind of provider.

Evaluating Services and Expertise

When evaluating managed service providers, here are the top three questions CIOs should consider.
1. Do they offer a pooled resources model? While this may be a less expensive option, it’s often riddled with problems relating to the quality of services and consistency.
2. What is the turnover rate? A high turnover rate, combined with other problems like a pooled resources model, may mean your MSP struggles to fully understand your environment and personnel.
3. Is proactive support vague in the SLA? If an MSP’s proposed agreement doesn’t spell out proactive measures, this might indicate that they aren’t as prepared as they should be.

Service Level Agreements (SLAs)

While some troubling red flags only show after the SLA is signed — namely, poor communication — there are some features that companies can look for before starting their partnership. For example, CIOs should ensure that the technology an MSP uses is up to date.

Pricing Models and Contract Terms

Compare the proposed price with other comparable services from competitors.
  • Is the MSP overcharging? This can be a sign of a company that cares more about its interests instead of yours.
  • Is it significantly undercharging? If so, it’s important to investigate why that may be. Some companies may offer an attractive rate because of less than favorable reviews.

Pricing: MSPs vs. On-Site Support

Generally speaking, MSPs have a one-size-fits-all approach to services and pricing. In some cases, that may solve some or most of the IT issues and problems an organization faces. Typically, MSPs operate using one of three pricing models:
  • Comprehensive managed services. This type of plan has 24/7 coverage that’s comprehensive, predictable, and provides on-hand experts. The average price range for this service is $125-$174/user monthly.
  • Per device. Like the first option, this one provides 24/7 coverage and allows the client more control over that coverage. Clients pay, on average, $35-$250/device monthly.
  • Break/fix. This service is as-needed and pay-as-you-go. Typically, this model has a single price, or an hourly range.

This is where on-site support, such as Techmate, is different. Techmate provides on-site expertise that isn’t dependent on users, devices, or an unpredictable break/fix model. Techmate’s services come at a flat rate that depends on the number of hours purchased per month, and whether clients sign a monthly or annual contract.

The Future of MSPs

Some MSPs see a future in specialization: either by industry or technology such as artificial intelligence, automation, and cybersecurity, to name a few. If specialization matters most to your organization, match your interests to those of your MSP. If on-site support is most important, look for an MSP that partners with other MSPs in the geographies where you need in-person attention. Alternatively, look for a staff augmentation provider like Techmate with nationwide coverage — they combine boots-on-the-ground support and the knowledge of your organization, industry, and tech requirements that come with them.
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