Managed Service Providers boosts transparency reducing operational cost under a subscription model

A managed service provider (MSP) is an IT service facilitator that manages your infrastructure remotely. Managed Service Providers help your IT infrastructure increase functional efficiencies under a monthly subscription model. Besides, managed cloud service providers not only reduce your IT costs but also improve the skills of your IT staff effectively.

The terms “cloud service provider” and “managed service provider”  interchangeably. If you are entering into a client-managed service provider partnership, you need to sign a service level agreement (SLA) contract. As a matter of fact, the agreement outlines your obligations and service provider’s responsibilities. However, based on the expectations set, you and the MSP mutually agree to the performance metrics. In the same fashion, the SLA reflects agreement terms and conditions.

Evolution of Managed Service Providers model

To know how the MSPs originated, take a look at the points below:

  •  MSPs evolved in the 1990s as Application Service Providers (ASPs)
  • The users of ASPs hosted remote applications at a remote location
  • Redesigning of the ASP model via the internet made them early cloud adopters
  • ASPs offered support services for your IT infrastructure via remote access
  • Initially, MSPs  managed the business via remote management and monitoring (RMM) of servers
  • Today, with enhanced service and scope, MSPs differentiate themselves from the crowd

MSP and MSSPs Service Specializations

Managed Service Provider (MSP)

Are you yet to find the first MSP client? In fact, MSPs can deliver a wide range of services depending on the client category:

  • By cloud storage: Data storage refers to architecture for managing your voluminous data
  • By vertical specialization: This includes vertical market clients specializing in legal, financial services, healthcare, and manufacturing.

MSSP

Managed security services providers (MSSPs) not only offer you a host of security solutions but also specializes in security-as-a-services. This equips you with deploying, configuring, and managing cybersecurity. Likewise, services such as Firewall administration, vulnerability scanning, patch management, Data Loss Prevention (DLP), etc. are MSSP practices.

MPSP

Managed Print Service Providers (MPSP) offload device management tasks for you. In fact, they optimize print workflows and supply consumables.

MSP pricing

Are you yet to figure out the right pricing strategy for your MSP services?

If you are running a mission-critical business, it’s important to identify the right pricing model for the best customer experience. However, if you are not familiar with the right MSP pricing strategy, it might be daunting.

Take a closer look at the popular managed services pricing models:

Per-user monitoring

In this pricing model, you will be charged a flat fee for monitoring all your devices under management.

For example, you will be charged for the IT support for laptops, smartphones, tablet or desktop systems. Besides, one of the advantages of this model is that you can use multiple devices.

Per-device monitoring

In per-device monitoring pricing, you are billed a flat fee for each type of device in the customer environment.

All-you-can-eat model

This is an all-inclusive pricing model that MSP charges for all your IT infrastructure support.

  • First, you can enjoy the flexibility to receive round-the-clock on-site support for all IT issues.
  • Second, for all the pricing approaches, you will be charged a flat monthly fee for recurring services.
  • Third, based on a subscription model, you receive the transaction billing of the Monthly Recurring Revenue (MRR) cashflow model. It is the income that generates predictable revenue for the MSPs.

Did you know that Managed IT services differ from MSP offering break-fix services, IT solutions provider and channel partner model?

The solutions providers for your billing break/fix contract project usually follows (T&M) Time & materials pricing model. If you want a flexible process for project execution, this model will dramatically appeal to you. Consequently, you have to pay a stated hourly rate for repair services and materials replacement. Moreover, MSPs with recurring revenue streams generate predictable sales for you to take advantage of IT support costs.

Service-Level Agreements (SLA)

An agreement well-documented by you and the MSP is Service Level Agreement. SLA defines quality metrics and service performance to dictate the client-MSP relationship.

The MSP’s pricing formula usually applies to Contract Management with Service Level Agreements. So, MSP SLA includes a tiered pricing structure. Similarly, if you are okay with paying higher fees for dealing with complex issues, you can opt for it.

The MSP challenges

Although this may be true that MSPs are struggling to establish their ongoing success in the market.  Unlike the would-be MSPs, the MRR has attracted traditional solutions providers like VARs, to the MSP model. Henceforth, before you take steps to alter your MSP strategy, ask these questions to identify MSPs common challenges:

  • Is the MSP proposing a lower rate pricing than the current valuation?
  • Is the MSP quantifying the Managing operating costs and MSP labor charges? Check.
  • Is the increased pricing strategy for cloud adoption going beyond your IT cost?
  • Is the MSP able to manage a hybrid cloud environment?
  • What are the performance metrics to predict success?

Most MSPs improve your IT productivity by keeping tabs on IT systems. In reality, this is done by employing remote monitoring and management software (RMM). Furthermore, you can monitor your IT administration functions using the RMM software.

Who are MSP customers?

Above all, being a small to medium-sized business can outweigh benefits if you are an MSP customer. It’s a great opportunity for you to garner in-house IT capabilities. Likewise, larger MSPs such as government agencies, hospitals may contract MSP staff for their complex IT needs.

Still, have questions related to MSP offerings and pricing models? Contact us today to know how you can capitalize on mutually advantageous client partnerships with us!