What Are Managed IT Services?
In today’s economy, filling technology gaps is essential for businesses to thrive. In this article, we’ll discuss the various types of managed IT services, the benefits they offer, and expected price points.
If you own or operate a business in the modern economy, you’ve probably run up against a technology gap that in some way negatively impacts your business’s ability to meet client needs or operate day-to-day. That has less to do with your team or poor management or strategy on your part as it does with how complex business technology solutions have become over the last decade. Increasingly complex business requirements need increasingly advanced technologies to support your business, and hiring sufficient staff or maintaining constantly evolving technology can quickly leave your business in a lurch.
In the same period that we’ve seen technology outpace our ability to keep up with at a business management level, we’ve also seen what we’ve come to refer to as the managed IT services industry grow exponentially. To meet increasing client needs in the management and strategic planning of IT systems, managed IT services as an industry reached a value of $174 billion in 2019, and is predicted to reach a value of $411 billion by 2027. The industry has been able to expand and grow to such a level by diversifying the types of services that can be outsourced.
What Is Meant By Managed IT Services?
Managed IT services, also referred to as managed service providers, are defined as B2B services that extend a business’s technology capabilities or provide solutions to clients’ mission-critical IT tasks. Rather than the client company hiring and maintaining in-house staff to handle these technology-based tasks, they rely on the staff of the service provider to fulfill those roles. Similarly, other managed services cover the installation and management of technology infrastructure and software. Let’s drill down on this and talk about the specific list of managed IT services on the market today
What are the Different Types of Managed IT Services?
Managed services providers are as varied as the average company’s technology needs. It’s important to remember that there are niche service offerings and highly customizable a la carte technology services operating throughout the economy that might fall beyond the primary categories of managed IT services we enumerate below, and these categories will evolve over time with the technologies that drive business.
Hear From Industry Experts
Read the latest tips, research, best practices, and insights from our community of expert B2B service providers.
How Much Should IT Services Cost?
One of the most critical advantages a managed service provider brings to the table is a flexible cost model. When a business has to manage its own IT infrastructure in-house and maintain a staff of professionals, it remains at the mercy of the service plans on offer by network service providers and Internet Service Providers (ISPs), vendors of the equipment they need to operate, and the software developers of the tools they use. Managed services providers bring bulk leverage to the table and therefore can provide their clients with customizable solutions often at a per-user rate.
The cost of IT services depends on the services being provided. Network administration, for example, is billed on a monthly fee per user or workstation and can range anywhere between $25 to $100. Server management and data storage is priced per server and the amount of storage required, and often come with extremely flexible conditions to allow the storage solution to flex in response to business demand. For support services, businesses can expect to pay hourly rates from $30-$200 an hour in addition to a service fee per month. SaaS models can range dramatically depending on the scope and function of the solution in question, and how many users are in play.
With such variability involved in pricing and services, the important takeaway for those looking to secure managed IT service solutions is to do your research, compare service providers and work with client managers to create a service model that works for your budget and provides the IT solutions that you need.
What Are the Advantages of Outsourcing Managed IT Services?
With the all-encompassing focus on value and efficiency driving business practices across every industry, there are some key advantages to businesses embracing managed IT services driving the popularity of the business model.
MSP Pricing Plans Reduce Costs
As we talk about briefly above, managed service providers reduce the costs of all information technology solutions due to the volume of business they bring to the table for vendors. A well-structured service level agreement can pass these savings on to clients, creating more affordable and flexible solutions.
Simplify Associated Accounting Practices
The additional benefit of simplifying costs is that IT-related costs can be shifted away from the capital expenditures line on an accounting level. When managed in-house, IT technology and infrastructure are unavoidable and difficult to control, with fixed costs of equipment and vendor costs but also the associated complications of depreciation.
IT-related costs are also difficult for the business to truly anticipate due to repair, maintenance, and upgrade requirements. Further complicating matters in traditional IT models are having to hire, train, and maintain a team of IT professionals, including the costs of maintaining certifications, that generates no income for the organization. Shifting to a service-based model for IT in both infrastructure and staffing shifts IT costs to a controllable cost that is more easily anticipated and budgeted for based on established pricing models.
Increased Productivity and Efficiencies
Shifting IT infrastructure and staffing offsite to a service provider allows the organization to create more efficient and income-generating focused business practices and staffing models. This does require efficient and robust support services underpinning the offsite solution, ensuring that the IT systems remain operational and client staff is supported in the event of any issues or failures in the IT infrastructure. With these supports in place, your organization’s staff can remain focused on servicing clients, improving the flow to the bottom line. From a leadership position, IT can be properly planned out and executed in a way that supports the business without having to worry about bloated, uncontrollable costs of managing the infrastructure on-site.
From a technology point of view, shifting IT solutions to managed IT services providers allows businesses to embrace more complex and impactful tools that allow employees to work faster and without wasted effort. Big data solutions reduce the number of unqualified leads sales teams have to sort through, improving conversion rates and driving more sales to the bottom line.
Affordable Scalability of Services to Changing Business Requirements
Information technology equipment and infrastructure are expensive to manage and maintain, and when your organization grows, the associated IT costs necessary to meet that growth could significantly diminish the flow-through to the bottom line of the increased sales. In a managed services arrangement, however, scalability is often a part of the contract and affordable, helping to maximize profitability. On the flip side, during times when business might be reduced, MSPs allow a business to only pay for the services they are using. This may include a little extra in added fees or having to pay for unused equipment or storage, helping the business to save costs.
No matter the scope and scale of the managed IT service solution, the MSP’s primary selling point to its clients is the MSP’s ability to provide industry-leading solutions, which requires them to onboard and retain top talent. Because these businesses are often focused on specific services, their staff are exposed to real-world experience that keeps their skills sharp, polished, and grounded in the realistic needs of their client base.
Find the Right Managed Services Provider for Your Business Needs
In order to compete in the modern economy, businesses must lean into information technology solutions. The costs and complexities associated with IT infrastructure, however, make it challenging for businesses of all sizes to implement IT solutions without the support of a third-party service provider that specializes in providing IT services. Explore the B2B services that will help you extend and improve your IT infrastructure and get access to the solutions you need to dominate your competition.