Managed service provider

Managed services is the practice of outsourcing on a proactive basis management responsibilities and functions and a strategic method for improving operations and cutting expenses. It appears as 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.

Under this subscription model, the client or customer is the entity that owns or has direct oversight of the organization or system being managed whereas the managed services provider (MSP) is the service provider delivering the managed services. The client and the MSP are bound by a contractual, service-level agreement that states the performance and quality metrics of their relationship.

Adopting managed services is known to be an efficient way to stay up to date on technology, have access to necessary skills and address a range of issues related to cost, quality of service and risk. As the IT infrastructure components of many SMB and large corporations are migrating to the cloud, many 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. 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. For example, in transportation, many companies are facing significant increase of fuel and carrier costs, driver shortages, customer service requests and global supply chain complexities. In addition, 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.

The evolution of MSP started around 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 (Managed Services Provider University) were the first advocates and the pioneers of the managed services business model.

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Wikipedia