Guide to Managed IT Services: Everything You Need to Know

Today, IT infrastructure is the backbone of any business – regardless of the industry you operate in. But does it mean your company needs its own dedicated IT team? Not necessarily. In many cases, hiring outside professionals to take care of your technology needs is what makes the most sense. It’s why the managed IT services market is thriving, projected to reach nearly $300 billion by the end of 2024. But what exactly are those – and how can you tell your company can benefit from implementing them?

Read our detailed guide to find out:

• What is a managed IT service?
• How managed services differ from other IT models?
• What are the top benefits of managed IT services?
• Where are managed IT services used?
• How do you mitigate potential risks when hiring an IT managed services provider?
• What are 5 steps to a successful implementation of IT managed services?

What Are Managed IT Services?

Managed IT services are when a business hires an outside company to handle its tech infrastructure, including setup, maintenance, support, ensuring data security, and managing software.

Imagine you run a big accounting firm (or maybe you don’t have to!). Your job is to take care of your clients’ taxes and finances – not worry about software, hardware, and all those other complicated words you may not even understand. Yet, you also need reliable technology that’s always secure and available. That’s when IT managed services come in handy, as they allow you to focus on your core business activities while tech issues are taken care of by the third-party provider.

What is a Managed Service Provider (MSP)?

A Managed Service Provider (MSP) is a third-party company that takes care of the entire IT infrastructure of their client – including network, systems, and services. Instead of hiring an in-house team, businesses can rely on MSPs to handle tasks related to cybersecurity, data backup, and software updates. That way, companies using IT managed services can focus on their actual work and business objectives – without worrying about technology.

MSPs offer a range of service models. For instance, some focus on technical support, either remotely resolving issues or dispatching technicians on-site, charging based on troubleshooting time and parts. Others use a subscription model, providing ongoing network maintenance, remote monitoring, and problem-solving for a set monthly fee based on the number of devices or systems covered.

Managed IT services in modern IT strategy

What role do managed IT services play in the current IT landscape? Well, for starters, it’s on par with the outsourcing trend that’s overtaken global companies – in 2024, over 90% of Forbes Global 2000 businesses used some form of IT outsourcing. But, of course, managed IT services are not just about outsourcing (more on the difference later). It’s a critical component of modern IT strategy, as it encompasses management, continuous monitoring, and solutions that are tailored to each business’s unique needs, which makes it a more strategic approach.

Managed IT Services vs. Other IT Models

• Managed IT services vs. Internal IT Staff
  While internal IT teams manage day-to-day technology needs, managed IT services provide a broader, proactive approach. MSPs handle tasks like cybersecurity, data backups, and software updates, allowing internal teams to focus on core business goals. For example, an e-commerce business may rely on an internal IT team for product development but turn to an MSP for secure payment processing and system monitoring.

• Managed IT services vs. Outsourcing
  Outsourcing typically involves contracting specific IT functions, like help desk support services, on a temporary or ad-hoc basis. In contrast, managed IT services provide ongoing, comprehensive management of all IT operations. For instance, an MSP might handle everything from network security to disaster recovery, offering more integrated, long-term solutions.

• Managed IT services vs. Cloud services
  Cloud services offer virtual infrastructure and storage solutions, but managed IT services go a step further by ensuring these services are monitored, maintained, and optimized. An example is a company using cloud storage for data backup while an MSP oversees the security and availability of that data.

• Managed IT services vs. Professional IT services
  Professional IT services are typically project-based, such as implementing a new software system. Managed IT services, however, provide ongoing support and optimization for IT systems, ensuring businesses have continuous, reliable performance.

• Managed IT services vs. Hybrid and Co-managed IT models
  In a hybrid or co-managed model, businesses share IT responsibilities with an MSP or internal team. For example, a company might have an internal team that handles user support while an MSP manages network security. This model combines the best of both worlds but requires more collaboration than fully outsourced managed IT services.

Top 6 Benefits of Managed IT Services

1. Strategic cost management

How much does IT infrastructure cost? While it’s impossible to give an exact number, the statistics show most companies spend between 4-7% of their annual revenue on tech. That’s not necessarily so bad, but the problem is – the performance of IT assets is declining rather quickly, with their effectiveness dropping by almost 70% within 7 years of use. For example, estimates show that by year 5, the expenses of supporting IT servers will rise by 150%. That’s why entrusting IT infrastructure to a managed IT service provider can be a very beneficial choice from the financial POV. By providing predictable pricing and reducing the need for expensive in-house teams or emergency repairs, managed IT services can help a company save up.

2. Access to top specialists

When using professional managed IT service providers, you gain access to specialized expertise that you would have to seek out and keep on your payroll otherwise. MSPs employ highly skilled professionals across various IT disciplines, including cybersecurity, cloud management, and software development. These specialists stay up-to-date with the latest technologies and industry trends, helping you stay competitive while also saving on recruitment, training, and staffing costs. Convenient, right?

3. Enhanced security

In the second half of 2024, global cyber-attacks increased by 30%, reaching a whopping 1,600 weekly per single organization. While managed security services don’t make these numbers any smaller, they can protect your company from their impact. From 24/7 monitoring to implementing strong measures like firewalls or multi-factor authentication, MSPs make sure your software stays safe – plus, they prepare your IT infrastructure for worst-case scenarios with backup and disaster recovery plans.

4. Minimized downtime

Any time your system is down, your company – and reputation – pays the price. How much exactly? The hourly cost of downtime for small-to-medium-sized businesses is $8,000 to $25,000. Managed IT services can greatly diminish this through proactive monitoring and maintenance of IT systems. They use advanced tools to identify and address potential issues before they escalate into serious problems. Regular updates, patches, and security measures ensure systems remain stable and protected against vulnerabilities. Additionally, MSPs offer backup and disaster recovery solutions to quickly restore operations in case of an unexpected outage. With 24/7 support, they ensure that any disruptions are resolved promptly, keeping business operations running smoothly and efficiently.

5. Scalability suited to your needs

One of the best things about not having an in-house team but rather outside help that can cater to your needs as they change is the flexibility this option offers. By using cloud-based infrastructure and remote tools, managed IT services provide scalable solutions that may grow – or get reduced – with time, without costly changes to the entire company’s IT structure. This means you can easily handle increases in users, data, or workload without overhauling your IT systems.

6. Insight into emerging technology

Research leaves no doubts – digitally mature companies report much higher net profits than their less tech-savvy industry counterparts and are outperforming them by as much as 53%. The thing is, if your company isn’t specialized in IT, it can be difficult to keep up with all the changes in the tech world. That’s when MSPs come in. Since they continuously monitor industry trends and innovations to ensure their clients get access to the latest tools and strategies, they know what’s up. And this approach can elevate your business and help you adapt to market changes faster.

Core and Advanced Managed IT Services

Core Services

1. Network and infrastructure management
   What do managed IT services providers do? Well, for one, they take care of a business’s IT network and infrastructure, ensuring everything runs smoothly and efficiently. This includes maintaining servers, routers, and other hardware to prevent downtime and optimize performance. For example, they monitor systems to detect and fix issues before they cause disruptions.
2. Security management
   Another aspect of managed IT services relates to protecting a company’s safety. According to IBM Security’s annual “Cost of a Data Breach Report,” the global average cost of a data breach reached $4.45 million in 2023 – an all-time high for the report and a 15% increase over the last 3 years. MSPs can protect businesses from that by implementing firewalls, antivirus software, and encryption. They also monitor for suspicious activities and ensure compliance with industry regulations, reducing the risk of breaches and data loss.
3. Cloud services management
   According to a 2022 survey by Flexera, companies with over 1,000 employees spend, on average, around $5 million per year on cloud computing and management. MSPs can help cut down on this cost as they manage cloud-based platforms and storage, ensuring businesses can securely access data and applications from anywhere. They help set up and optimize cloud environments, making operations more flexible and scalable.
4. End-user support and helpdesk services
   New estimates show that “resolving a support incident can cost up to $100 or more, depending on its complexity”. Obviously, the risk of that happening is much bigger if a company doesn’t have a specialized team to deal with those issues and a. prevent them, b. solve them instantly. Managed IT services can be of help here since they provide direct support to employees, addressing IT issues like software bugs or hardware malfunctions. Helpdesk services ensure staff productivity by resolving problems quickly and minimizing downtime.

Advanced Services

1. Managed dev-ops and agile practices
   MSPs help businesses adopt DevOps and Agile methodologies to transform how software is developed and deployed. They introduce automated pipelines for coding, testing, and deployment, reducing manual errors and increasing reliability. By making the collaboration between development and operations teams easier, MSPs also boost productivity and can ensure faster delivery of high-quality software. For example, they can implement Continuous Integration/Continuous Deployment (CI/CD) systems, enabling businesses to roll out updates seamlessly and respond swiftly to changing customer demands.
2. AI and ML integration
   MSPs play a critical role in integrating AI and machine learning technologies into various business operations. They help organizations leverage AI-driven analytics to make data-informed decisions, predict market trends, and uncover customer insights. For instance, they can deploy machine learning models to optimize supply chain logistics or integrate AI-powered chatbots for enhanced customer service. By automating repetitive tasks, such as data entry or fraud detection, MSPs also allow businesses to focus on strategic growth initiatives.
3. IoT and edge computing management
   For organizations utilizing Internet of Things (IoT) technologies, MSPs ensure that devices are interconnected, secure, and perform optimally. They manage networks of sensors and devices, safeguarding data transmission and minimizing downtime. Another thing they do is handle edge computing solutions, which process data closer to its source, reducing latency and enhancing real-time decision-making. For instance, in industries like healthcare, MSPs can oversee edge-enabled IoT systems that monitor patient vitals, ensuring rapid responses in critical situations.
4. Microservices and containerization support
   One of the lesser-known functions of MSPs is they aid modernization by adopting microservices and containerization. This enables faster software updates and scalability while reducing costs and complexities. By breaking applications into smaller, independent services, businesses can develop, test, and deploy features more efficiently. Another perk? Containerization ensures consistency across environments and simplifies resource allocation, enhancing system reliability and performance.

Industry-Specific Managed IT Services

How are managed IT services used in real life? They find applications in many different industries and sectors, including:

Healthcare

Healthcare organizations rely on managed IT services to ensure compliance with stringent regulations such as HIPAA and HITECH, safeguarding patient data and ensuring privacy. Managed IT providers support Electronic Health Records (EHR) systems and enable seamless telemedicine platforms, empowering healthcare providers to deliver efficient, remote care while maintaining robust cybersecurity measures.

Finance and banking

In the finance and banking sector, managed IT services focus on compliance with standards like PCI DSS to secure sensitive payment data. Providers assist in implementing fraud detection systems, leveraging advanced analytics and artificial intelligence to identify risks and protect financial assets. These services also optimize IT infrastructures to ensure high availability and security in transaction systems.

Manufacturing

Manufacturers benefit from managed IT services through the integration of automation and robotics, which enhances production efficiency. These services also optimize supply chain management by implementing advanced tracking systems and analytics, enabling just-in-time manufacturing and reducing operational costs. A good example of a solution that’s being implemented in the industry is the TISAX standard responsible for information security designed specifically for the automotive industry and its supply chain. For manufacturers, implementing TISAX is not just about compliance; it’s a strategic move to secure operations. That’s why it’s important to choose an IT managed service provider who is a TISAX participant – such as Comarch.

Retail and e-commerce

Retailers use managed IT services to develop omnichannel strategies, integrating online and in-store shopping experiences. Advanced customer data analytics provided by these services offer insights into buying behavior, which helps target customers better and, consequently, boosts sales.

Government and public sector

Government agencies leverage managed IT services to address data sovereignty concerns, ensuring that sensitive data complies with jurisdictional regulations. These services also power citizen services platforms, enabling efficient delivery of public services such as digital identity verification, tax collection, and public safety initiatives.

Pricing Models and Contract Strategies

Traditional pricing models

Value-based and outcome-based pricing

Beyond traditional models, value-based and outcome-based pricing focuses on delivering measurable business outcomes. Pricing is tied to the tangible benefits or efficiencies achieved, such as improved uptime or enhanced cybersecurity. This approach fosters a deeper partnership between service providers and clients, emphasizing performance and results.

SLA negotiations and customizations

A Service Level Agreement (SLA) is a contract between a business and its MSP that defines the services the provider will deliver and the expected performance standards. Think of it as a detailed "promise" from the MSP about what they will do for your business. It outlines key points, such as expected response time, uptime guarantees, and support availability. SLAs make sure that everyone knows what to expect, creating a clear framework for service quality and good communication between the two parties.

Risk-sharing agreements

Innovative contract strategies include risk-sharing agreements, where both the provider and client assume risks tied to performance outcomes. For example, if the MSPs fail to deliver specific benchmarks, there may be some penalties or incentives put in place. The goal is to foster mutual accountability so that each party is equally responsible.

Advanced Security Strategies in IT Managed Services

With so many benefits managed IT services offer, it seems like they’re the perfect deal for virtually any business. Yet, many entrepreneurs wonder about their safety. Is entrusting your entire IT infrastructure to an outside provider really such a smart idea? In this section, we’ll dive into what makes managed IT services safe – and rest assured, the strategies they rely on do not disappoint. Here are some of them:

• Zero-trust security models
  According to 2023 data, zero-trust security models protected around $4.45 million by preventing data breaches in that year alone. Why are they so effective? Zero Trust models operate under the principle of “never trust, always verify.” Instead of assuming users or devices within a network are safe, these systems continuously validate credentials and access levels before granting entry.

• Cybersecurity mesh architecture
  Cybersecurity mesh architecture creates a modular security framework that focuses on securing individual components rather than a centralized network perimeter. This approach enables managed IT providers to isolate threats and protect decentralized systems, such as remote workplaces, making them that much safer.

• AI-driven threat detection and response
  Managed IT services leverage artificial intelligence to monitor networks for abnormal patterns and suspicious activities. AI-driven tools can identify threats faster than traditional systems, providing proactive defense mechanisms. For example, a retail company might rely on an AI-driven platform to detect unusual login attempts across e-commerce portals, allowing immediate mitigation of potential breaches.

• Incident management and disaster recovery
  In the event of a cyberattack, managed IT services implement structured incident response plans to contain and resolve threats swiftly. They also ensure disaster recovery solutions, such as off-site data backups and recovery protocols, are in place to minimize downtime.

• Compliance and continuous monitoring
  Regulatory compliance is critical in many industries – and managed IT services help businesses adhere to evolving standards. Continuous monitoring systems ensure ongoing security, flagging any deviations from compliance requirements.

5 Managed IT Services Challenges & Solutions

However useful managed IT services are, they don’t come with zero faults or challenges. Below, we’re listing the most common ones – with ideas on how to mitigate the risks.

1. Dependency and vendor lock-in

Though having a trusted provider is great, relying on just one can lead to dependency, where switching to a new MSP becomes difficult and costly. That can seriously limit your company’s flexibility and access to new, innovative solutions that may just be the thing you need.

Solution?

• Go for providers that offer flexible contracts and integration options. Alternatively, you can consider using multiple vendors for different IT services to reduce dependency and increase bargaining power.

2. Data security and privacy concerns

In an ideal world, your provider should be so trustworthy that there’s no need to worry about data safety. However, this can be a potential issue as entrusting any third party with sensitive data is always risky and can raise privacy concerns.

Solution?

• Prioritize providers with strong cybersecurity measures, including encryption, regular audits, and compliance with data privacy regulations like GDPR. Establish clear data access controls and monitoring systems to safeguard sensitive information.

3. Integration with legacy and modern systems

Many organizations use a combination of outdated and new systems, making integration with managed IT services a complex challenge. Sometimes, joining these systems without disrupting operations can be difficult and expensive.

Solution?

• Assess both your legacy and new systems carefully before implementation. Collaborate with the provider to ensure the integration is as breezy as possible and invest in testing to identify and resolve potential issues early.

4. Change management and organizational culture

While not the biggest issue on this list, adopting managed IT services often involves significant changes in processes, which can be frowned upon by your employees and make the process unnecessarily complicated.

Solution?

• Create a very clear-cut plan with employee training, clear communication, and support resources to help staff adapt to new IT systems.

5. Inadequate support or lack of expert knowledge

Some managed IT services may fail to provide adequate support when issues arise, particularly if the provider lacks specialized expertise. This can lead to prolonged downtimes, unresolved problems, and frustration, making it crucial to select a provider with the right skills and responsive customer service.

Solution?

• Choose a provider with a strong track record of responsive support and ensure that they have the necessary expertise for your specific needs. Regularly review service performance and adjust contracts if necessary to maintain high-quality service. 

5 Steps to Successful Managed IT Services Implementation

1. Assessing organizational readiness
   Before onboarding a managed service provider (MSP), evaluate your current IT infrastructure, resources, and needs. This step identifies gaps and areas where an MSP can deliver the most value, ensuring readiness for the transition.
2. Selecting the right MSP partner
   Choose an MSP that aligns with your industry, operational needs, and long-term goals. Look for expertise, scalability, and a proven track record in delivering tailored solutions. For example, an MSP with healthcare expertise ensures HIPAA compliance and secure EHR management.
3. Defining clear objectives and SLAs
   Collaboratively establish clear objectives and Service Level Agreements (SLAs) with your MSP. These agreements define performance benchmarks, response times, and accountability, ensuring that services meet business expectations consistently.
4. Governance structures and communication plans
   Develop governance frameworks and regular communication schedules to maintain transparency. Clear roles, escalation paths, and review meetings foster a collaborative relationship between your organization and the MSP.
5. Continuous improvement and innovation
   Encourage a culture of continuous improvement where the MSP proactively innovates and adapts solutions to evolving needs. Regular evaluations and feedback loops ensure that services remain efficient and relevant over time.

What’s the Future of Managed IT Services?

Given the rapid growth of the managed IT services market, their future looks at least very bright. The landscape is set to be shaped by emerging innovations in areas such as AI, quantum computing, and 5G. Due to raising ethical and ecological concerns, MSPs will also have to adopt green practices and prioritize a smarter, moral-focused approach to data usage. Preparing for future challenges will require them to remain agile and continuously evolve their delivery models.

Managed IT Services – Key Takeaways:

• The managed IT services market is expanding, projected to reach over $300 billion by the end of 2024.
• Over 90% of Forbes Global 2000 businesses are expected to use some form of IT outsourcing, including managed IT services, by 2024, showcasing its widespread adoption.
• Managed IT services can protect companies from costly data breaches, cyberattacks, and downtime – the hourly cost of which ranges between $8,000 and $25,000 for a regular business.
• Companies with over 1,000 employees spend, on average, $5 million per year on cloud computing and management, with managed IT services helping optimize these costs through better efficiency and security.
• While managed services offer many benefits, they come with challenges like vendor lock-in and integration with legacy systems. Successful implementation requires careful readiness assessment, selecting the right MSP, defining objectives through Service Level Agreements (SLAs), and fostering continuous collaboration.