What is a managed IT service?
A managed IT service (or managed IT) is an IT task performed by a third-party contractor and delivered to a customer.
A managed service arrangement means that the managed services provider is responsible for the operation of the IT service and equipment. The customer usually pays a monthly fee to receive the service. Although there are many types of managed IT services, the goal is to shift the responsibility of IT maintenance from the customer to the service provider. In an effective managed services relationship a customer benefits from predictable pricing and the ability to concentrate on core business issues rather than IT management tasks.
Which services are the most commonly used?
Remote monitoring and management of desktops, servers, and mobile devices is a popular type of managed IT service. Remote monitoring and management are often the foundational services of a managed services provider. This service is offered by many managed service provider firms, which means that profit margins are under pressure.
Managed services providers have had to differentiate themselves from the competition due to the commoditization and commoditization of basic managed services. Managed security services are a popular option. Service providers are increasingly being asked to provide IT security services for their customers. Services providers are now developing managed security services or partnering to offer cybersecurity services.
With the introduction of cloud computing, Cloud services are now part of managed IT services. For example, service providers may be focused on infrastructure as a Service (IaaS), offering managed cloud services together with cloud providers like Amazon Web Services (AWS), Google, and Microsoft. Service providers might also offer managed platform as a service (PaaS), or partner with software-as-a-service (SaaS), vendors like Salesforce in the CRM space, and ServiceNow in service management.
Providers of managed IT services might also want to differentiate themselves in the communications sector. One example is managed IP telephone services, in which a managed service provider assumes the responsibility of voice services within a customer’s account.
Managed IT Service Contracts
The master services agreement is often used to define the terms and conditions that a managed service provider will work with customers. The SLA service-level agreement is another important document for managed IT services. It identifies the services that the provider will provide and the success of delivery.
Also read: Top 10 Desktop as a Service Providers
Service providers can charge for managed IT services in many ways. There are three types of pricing options: per-device, per-user and all-inclusive.
Remote monitoring and management services can be charged per device, with the service provider paying a flat fee per device. If a customer uses multiple devices, such as smartphones, tablets, and laptops, the service provider might adjust its pricing to reflect this.
For managed IT services, all-inclusive pricing establishes a flat rate for the entire service that a provider provides to its client.
Managed IT services are usually billed on a regularly scheduled basis, with monthly fees a common approach. Flat fees are billed on a regular basis to provide predictable pricing for customers and the service provider stability in a monthly stream of recurring revenue.
When managed IT services are offered for a monthly flat fee, channel partners who were previously dependent on hourly billing rates will face difficult transitions. However, service providers who are interested in offering managed IT services can take a gradual approach to a managed pricing model. They should ensure that their processes are predictable and repeatable.
The history of managed IT service providers
Managed IT service providers have founded in the 1990s with the advent of application service providers (ASP), which offered remote application hosting services. Remote support was possible through ASPs, as opposed to on-site support for customers’ IT infrastructure.