As many as two thirds of businesses are using some form of managed service to provide some or all of their IT infrastructure today, leaving them more time and resources to spend on other parts of their business whilst the IT specialists do what they do best. However, exactly what “managed” means depends greatly from provider to provider, and even contract to contract, so it is worth explaining what such services are and what’s good (and not so good) about them.
Why the shift to managed services?
Traditionally, companies of all sizes would need to create their own IT infrastructure, and then would work with IT specialist firms on an ad-hoc basis to install the system and fix things when they go wrong. This was both expensive, as every business needed to have their own IT in-house, insecure as in reality most executives have little clue about digital security, and could be very expensive when things went wrong. It was difficult for businesses to know how much they would have to pay for the IT services as the costs would vary wildly from month-to-month, and IT was a major source frustration for many businesses.
Managed services solve most of these issues, with IT specialists providing either the hardware, the software, or both, and maintaining it on an ongoing basis in return for a regular monthly or yearly fee. This means that IT professionals take care of the maintenance and security, and they are on-hand if something goes wrong. As the infrastructure is better maintained, there are fewer issues and most importantly the regular monthly fee helps businesses plan for the future and focus on innovation and sales.
Managed services can cover everything from network, application, system, servers, and backup systems to workstation and printer management. However, it is cloud services and managed IT security that are how most people will come into contact with managed services today. All companies that use GMail or Outlook for their email rather than running their own IMAP and SMTP servers are using managed cloud services, even though many would not necessarily think of them as such.
What are the Pros and Cons?
Advantages of managed services
1. Predictable and regular cost
Companies want certainty, and outsourcing IT infrastructure for a single monthly fee is both a relief and a serious cost saving compared with having to deal with the fires in-house or expensive IT engineers charging on an ad-hoc basis.
2. Expertise on-demand
Managed service firms provide support to their clients, so that when an IT issue or idea arises, they are always on hand to answer questions or fix the problem. There are no extra fees involved, infrastructure and support are provided together under specific service level agreement terms.
3. Maintenance and upgrades
Maintaining a secure network and running software updates can be a major headache for any company (just ask Microsoft), so it is always the safest and generally most efficient option to have IT specialists available to perform the work for you, where they can handle any issues that may arise.
4. Time, money and focus
Regular costs are a good benefit, but in reality the overall costs of a managed service can often be significantly less than trying to create and maintain the infrastructure in-house too. The money, time and effort (and stress) executives were expending on IT could be much better spent trying to find new clients and innovate their own products.
The cloud-based nature of managed service providers mean that they can grow your infrastructure allocation along with your needs. They will generally charge a fee per user, and as your company headcount grows, the fee grows alongside that. A company will never be left without the capacity to add new employee email accounts or having to install another HDD or server to squeeze on one more user.
Disadvantages of managed services
By far the biggest disadvantage of managed services is the loss of direct control. When a company has their own IT infrastructure it is theirs to do with as they please – repurposing a server or adding a new service can be done without the need to work with an IT partner. Smaller businesses could never have done this anyway, but for large and medium-sized firms, the ease of use and regular cost of a managed service has to be weighed up against the idea of renting infrastructure form another company and not owning it outright.
Cloud-based managed service providers may be able to grow your service along with your team-size, but the services they offer will be limited. They will offer a range of services from which a company can pick-and-mix, but for a company with truly bespoke needs they may not be the answer. In reality most companies have at least some services they need that work just like many other companies, such as email, but sometimes a mix of managed services and bespoke in-house infrastructure may be required.
Managed services can be a fantastic option for businesses that need to scale but don’t have the resources or expertise on-staff to support such growth and prefer to focus their attention on building their business rather than putting out IT fires, but they may not be for everyone. However, one thing is clear, with the industry expected to expand to be worth $258m by 2022, the sector has a lot of room to grow yet.
Photograph by Michael Jarmoluk