Is Your Company a Good Fit for Managed IT Services?

"Managed Services” in the IT world, refers to having a third party operate and administer your IT system from a remote location over a WAN or internet connection. Managed Service Providers (MSPs) are independent companies that specialize in the remote management of IT systems for their clients. They become, in effect, the IT department for the customer. So why is this service becoming so popular, and who is a good candidate for it? The answers are below.

Paradigm Shift in IT

Thanks to server and desktop virtualization, high-speed and low-cost bandwidth availability, and an abundance of good IT management tools, remote management is not only possible, it is the wave of the future. As a response to this, many quality third-party data centers have popped-up and make it affordable for companies to enjoy the benefits of redundant electrical sources and diesel generators for backup, as well as redundant internet connection sources, all things that would be prohibitively expensive to accomplish in most company IT sites. Combine all this together, and there is a massive move to co-location, hosting and managed services. IT is becoming a utility to many companies just like purchasing electrical power, or securing off-site expertise like legal services.

What Factors are Involved in a Managed Services Decision?

There are several issues that factor into the answer to this question. They are listed here in order of importance:

• Company and staff size. There are two big costs associated with running an IT shop… hardware/software and personnel. Assuming you want or need to continue owning your own IT hardware and software resources, then the cost of personnel is you next big issue, and managed services addresses that directly.

If you are a small company, you are likely to be a good candidate for having all of your IT services managed because it is difficult and expensive to find and keep the right IT skills as employees. Plus, when that person is sick or on vacation, having appropriate backup is challenging at best, and a big problem in normal situations. Larger companies tend to have larger staffs and can deal with these problems far more easily. However, even those larger firms may be good candidates for outsourcing portions of their IT management for areas where their expertise or depth is lacking.

• Redundancy and/or additional skills.  Any size company may choose to use IT managed services as a supplement to their own staff or because they need the redundancy.
• Hosting too? If you are tired of paying the equipment costs, or  your IT equipment is old and needs to be replaced, then you should consider hosting, which is managed services combined with a third party renting the hardware and software resources to you. This turns IT into a completely operational expense rather than having to deal with the capital expenditures of buying new equipment. Depending on your industry and tax situation, this may be a good option for you.

So What Companies are Good Candidates for Managed Services?

Now that we know the factors involved in the decision, we can boil this down to a specific list of attributes for companies that are good candidates for Managed Services:

• Small Companies in General. This is due to the high cost of hiring and keeping qualified IT personnel, and having enough depth to cover them when they are unavailable.
• Companies of all sizes that want to supplement their internal staff either for redundancy or skillset reasons.
• Larger companies that want to outsource the management of a portion of their IT management.
• Companies that wish to get out of the IT business. By this, I mean that they no longer wish to own and maintain their own IT hardware and software, and wish to rent these services (along with the services to manage them) from a hosting provider.

Most smaller business are moving to this model because the cost savings are so compelling. As time goes on, larger and larger companies will be doing this as well for the same reason. In 10 years, we expect the majority of companies to be hosting and only the largest enterprise corporations will be maintaining their own data centers and key IT staffs. IT as a service is becoming just like electricity… a utility!