IT service providers deliver the technical expertise small businesses need at a much lower cost than hiring IT staff. They can recommend, install, and manage technology according to business objectives and core competencies and ensure that critical data is safe. That's why nearly 70% of U.S. small to medium sized businesses (SMBs) work with an IT service provider for some or all of their IT needs.

70% of U.S. small to medium sized businesses work with an IT service provider.

What is a MSP

A MSP, or managed service provider, is an IT service professional to which SMBs outsource their IT needs. MSPs deliver ongoing technical management of a clients applications (email, web site, security, etc.) and IT infrastructure. This is typically accomplished through alert management services, which allows them to keep tabs on the health of their clients' IT environments, change and update systems and troubleshoot problems.

Why Outsource

Small businesses outsource IT to ensure all their business systems, operations and networks remain up and running. Managed service providers take a proactive approach to IT. Rather than waiting for something to break or shut down, MSPs ensure a customer's IT can avoid most tech issues in the first place. This is huge, because IT related downtime can have a devastating impact on revenue and reputation-especially for smaller businesses trying to grow.

How Managed Services Works

MSPs typically deliver services on a subscription basis; companies pay a fixed amount, usually monthly, for a specific set of IT services. Some common examples include Applications, Alert Management, Helpdesk, E-mail, Security, Storage, Backup and Disaster Recovery. These services are typically offered either as packaged services, or a la carte, depending on the needs of the SMB. They are also often priced at a fraction of the cost of a full-time IT resource. MSPs work with a variety of technology vendors in order to deliver these services. However, it's not just about the technology. Rather, the expertise of the service provider holds the most value for SMBs.

Greater Value Lower Costs

Depending on the company, cost savings may also be a factor-especially among smaller SMBs with straightforward IT needs. Monthly fees for managed services will vary depending on the services delivered. But, managed services are generally more cost effective than hiring in-house IT staff for smaller businesses.

According to Kaseya's 2018 MSP Benchmark Survey Results, 24% of respondents pay under $1,000 a month for managed services ($12,000 per year) - a fraction of the yearly salary of an IT professional in the U.S. An additional 28% said they pay between $1,001 and $2,500. Larger companies with internal IT can also recognize cost savings from IT managed services. However, cost saving isn't the primary driver for managed services adoption among larger companies. According to CompTIA, larger SMBs are more likely to contract with MSPs for strategic reasons.

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