Mythbusting - 4 Common Misconceptions About Managed Services Providers

Aug 10, 2017 1:49:42 PM | By John Way

About 12 months ago I reached an interesting tipping point. Up until then, I had mainly been opening engagements with prospective customers by introducing and explaining the Managed IT Services concept. 

That is reflected in my previous blogs - 7 indicators that you need a Managed Services provider and Managed IT Services: A powerful enabler for your businessWhile that still happens, more of these conversations today are with people who have heard of the MSP concept, and start off outlining what Managed Services do not do. So I have decided to condense those discussions into 4 common misconceptions.


1. Managed Services Providers are the same as Cloud Computing providers (and vice versa)


(See also my previous blog on the difference). 

Servers in the Cloud still need to be managed by somebody. If you consume Infrastructure as a Service, then the virtual servers you run on that IaaS are still your responsibility to manage, maintain and patch. For example roughly half of the servers for which we provide Managed IT Services today exist in the Cloud. 

What does change is the responsibility for the underlying infrastructure- the IaaS provider is responsible for the upkeep of their machinery and the virtualisation layer, and some elements of licensing for the guest virtual servers. But maintaining the virtual servers remains firmly with the customer's IT staff/Managed Services Provider.


2. Managed Services are cheaper than time-and-materials

Not always

...And that is not the core value proposition for Managed Services Providers.

For example you may have spent little on server maintenance for the last  2 years, and had the good luck not to suffer an outage in that time. A Managed Services contract is definitely going to be more expensive than spending nothing - until you do suffer an outage and spend a fortune on systems engineers rebuilding an undocumented and unmaintained computing environment, which will itself be dwarfed by your loss of productivity and reputation. 

However if your enterprise is beset with constant systems engineering bills and/or irksome outages, there is a good chance a Managed Services agreement will reduce your IT expenditure immediately. 


3. Managed Services contracts are just an "all-you-can-eat" alternative to time-and-materials.


The MSP model is a paradigm shift away from reactive fix-it-bill-it thinking, not just a different way of billing.

The MSP model aligns the "win/loss" scenarios for provider and customer. Fixed price "all you can eat" arrangements are zero-sum gambles in which there must be a loser.  See also here on the subject of the MSP value proposition.


4. Managed Services removes the need for warranties on hardware and support contracts on software. Or vice versa.

Generally no.

The Managed Services agreement usually acts as an orchestration layer between your business and the rest of the IT industry.

Thus an MSP's service desk will translate a user's business issue into a technical incident, and apply the necessary remedy. In the case of hardware failure, this will mean registering the warranty claim with the manufacturer, and then reintegrating the device back into the business once repaired or replaced. 

If there is no warranty on the hardware, the the process of sourcing and applying replacement parts will take longer and create more cost in lost productivity. Plus you will still be up for the cost of parts even if the Managed Services agreement covers labour.


This is by no means an exhaustive list, but rather the top four based on my experience. The key lies in rational thought- when engaging an MSP frame your questions in terms of business scenarios rather than technical ones.

Please feel free to reach out to me if you have any questions or you are seeking guidance on building a relationship with an MSP.


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John Way


John Way

John has led Designertech’s Continuous Computing division since 2013, and was instrumental in developing our Managed IT Services offering ContinuITy. Although he has 22 years’ experience in IT services, he originally trained to be an archaeologist.

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