The Role of Managed Service Providers

Mounting market pressure from competitors due to global convergence has resulted in service providers requiring solutions that allow for faster delivery of modern multi-media services whilst simultaneously providing heightened customer attention. Convergence has also meant a proactive strategy in responding to market needs and an emphasis placed on the service itself, requirements which have increasingly validated the idea of outsourcing networks. This is exactly where managed service providers (MSPs) come in.

A managed service provider is an external company that manages the network operations of a customer via the internet,  straddling the support and project-based services within a company. MSPs work from outside the client's internal networks, and orientate themselves around integrating and certifying the online security of software and content. MSPs are not necessarily synonymous with Management Service Providers, since the former offers a wider spread of it managed services, whilst the latter revolves mostly around monitoring servers, routers, firewalls and other software. A typical MSP's services are more advanced and customized, including remote networking, patch management, technical support and remote data back-up. Essentially, MSPs are outsourcing vehicles for organizations, especially internet service providers, that don't wish to allocate resources towards the maintenance and enhancement of their computer networks.

Managed service providers proffer three general strategic models, namely strategic outsourcing, selective network out-tasking and managed and hosted applications. The first relates to an exhaustive network transformation  and migration into new technologies that supports all stages of the life-cycle of an organization's network. Here a managed service provider will provide expert consultation, planning, design, installation, maintenance and maturation strategies. The second model targets specific management functions that the MSP can streamline, in response to the client's requirements. The third refers to the hosting or management of applications stemming from the outsourced company's data infrastructure or the clients, which are primarily desirable as new sources of revenue. An MSP enables these applications to enter the markets quickly once having minimized initial investment, analyzed and discriminated application viabilities and mitigated the risks.

Debating Cloud Services Versus On-Premise Solutions

The difference between hosted versus on-premise software is analogous to renting a flat versus owning it, and both the benefits and disadvantages follow accordingly.

Cloud services are similar but not directly equivalent to Saas (software as service), this is when software is provided externally by a third party which houses the IT infrastructure. Access is on-demand, but unlike the popular SaaS, hosted software does not support the synchronicity of multiple customers on a single application, meaning that separate installations and servers are required for each user.

Hosted software is like renting the hypothetical flat – it means generally lower costs and lower risks. Compared to an outright purchase, the initial payments are less, investment (in software or hardware) is less likely, licensing and renewal are reduced. There’s no maintenance, backup worries, reduced responsibility, and the seductive notion of a dependable monthly cost.

But like renting a flat, there can be unanticipated expenses – once-off payments here arriving in the form of customization, training or supplementary functionality. The landlord’s also got the spare keys, so there are potential security concerns – and the rules (regarding the timing of upgrades for example) and fee enlargement decisions are not the customers to make. Cloud services also provoke worries of vendor reliability and problematizes the vendor’s system becoming redundant, financially or otherwise.

On-premise software is basically traditional software management – software installed and run on the customer’s own computer. It’s like owning the flat – the customer retains control over the administration and maintenance of the software, allowing for greater flexibility. This means that all data is dealt with internally, and in conjunction with an IT staff for support, the payoff is usually in security and supervision.
But ownership also means a higher original investment (hopefully paying itself off over time) unpredictable management costs, complex and expensive upgrade procedures, limited scalability, difficulties with optimization/customization and higher long terms costs.

Like owning versus renting a flat, neither is necessarily better and both can be, depending on the company’s needs regarding their business, security and technical requirements.