Managed services are when you enlist a company—a “managed services provider,” or MSP—to run the day-to-day management of all or part of your IT infrastructure. This MSP assumes responsibility for the monitoring and management functions that are essential, yet non-strategic, to your business. Yet, you remain in control of your infrastructure and have visibility into performance. There are two different kinds of managed services—traditional managed services, in which the MSP monitors and reports on performance of infrastructure that you own; and hosted managed services, in which the MSP owns, installs, monitors, manages and upgrades all your systems for set monthly fee.
More small businesses are turning to managed services, with 40 percent of them depending on MSPs to manage at least some of their infrastructure by the end of 2014. Here are seven reasons why.
Reason No. 1: Focus on more strategic IT initiatives
Once the tasks of simply keeping the IT lights on are taken off your plate, you suddenly have time to focus on those IT initiatives that generate revenue, enable employee efficiencies, or otherwise help your business become more competitive. Rather than having to respond to alarms when the network slows down, you could be revamping the website or building a new mobile app for customers.
Reason No. 2: Make your IT budget stretch further
Because you don’t own the infrastructure, but instead subscribe to it, you transform your capital expenditures (CapEx) into operating expenses (OpEx)—a good thing in a recovering economy when the future still looks uncertain. In one survey, 74 percent of companies agreed or strongly agreed that the ability to replace capital expenditure with an ongoing monthly subscription fee was an important reason to go with managed services. Not incidentally, this dramatically lowers the TCO of your systems. (Source: B2B Managed Services, Barchi Gillai and Tao Yu, Stanford Graduate School of Business, 2013)
Reason No. 3: Get access to higher-grade technology
But managed services do more than just address your budget issues. You also get access to technology you wouldn’t otherwise be able to afford. Because MSPs provide similar services for multiple clients and therefore have large economies of scale, they can invest in carrier-grade data center technology—something you wouldn’t be able to touch on your own. A study by Research and Markets found that managed services reduce recurring IT costs by 30 percent to 40 percent and achieve between a 50 percent and 60 percent increase in efficiency. (Source: “Global Managed Services Market to 2018,” Research and Markets, October, 2013.)
Reason No. 4: Gain the specialized expertise you need
Approximately 40 percent of small businesses say finding workers with the right technology skills is an issue. And even when the right skill sets can be found, they are pricey—the high cost of IT labor is another challenge for 28 percent of SMBs (Source: “SMEs: Equipped to Compete,” Oxford Economics, June 2013.). Sixty-one percent of small businesses in one survey said that their MSP gives them access to greater technical expertise than they have in-house. (Source: “Managed Services Survey,” Spiceworks, December 2013.)
Reason No. 5: Stay up-to-date with the latest technologies
You’re not managing your daddy’s IT shop. Today’s technologies are evolving at an incredibly fast rate. Although some of the newer technologies—take tablets and smartphones—are easier and more convenient for your users, managing them is proving to be somewhat of a challenge. Let your MSP handle it. Leading MSPs don’t try and force feed technology to you—they consult with you to make sure you have the right technology to meet your needs while relieving you of the burden of having to constantly upgrade and enhance your infrastructure. As you know, upgrades are a royal pain. And as the number of devices and operating systems you support proliferates, they only become more difficult. With an MSP, you know all your users are up to date on the same version of a system, and that technology refreshes are done in a timely manner.
Reason No. 6: Protect your business
One of the worst things that can happen to a small business is a security breach. Imagine the chaos if your computers were infected with a virus, or if key data was stolen. Imagine where the blame will fall—on you. The scope and complexity of security threats is always growing, which is why you need a dedicated professional on your side. Backing up data, preparing for disaster recovery, ensuring that anti-virus and malware protection are enabled, managing firewalls, installing security patches and updates, encrypting data, managing mobile devices, preventing unauthorized network access, and ensuring governance and compliance standards are enforced—these are just some of the issues concerning security that an MSP can handle for you.
Reason No. 7: Be proactive in preventing disruptions to the business due to IT issues
Most MSPs pride themselves on being highly proactive when it comes to potential infrastructure issues, frequently preventing problems before they happen and minimizing the impact of IT woes on business operations. In many cases, you’ll get notice of a potential vulnerability in a system from the MSP in advance of an actual failure. And as you certainly know, if you can be proactive with the CEO on the state of potential IT challenges, you’ll be a true hero.
All in all, small businesses have many reasons to consider managed services. And with leading MSPs becoming very interested in the small business market, there are a rich array of choices to select from. In my next blog, I’ll talk about what you should look for in an MSP.
The economy is improving. Companies are hiring again. Technology is increasingly viewed as essential to the success of small businesses. Yet only one-quarter of small business IT budgets are larger in 2014 than in 2013, according to the 2014 annual Spiceworks State of IT Budget survey of small businesses. Another survey shows that a full 53 percent of small businesses say that their IT budgets are either “very” or “somewhat” inadequate to their needs.