Evolution of Managed Services

April 17, 2015

Nothing has changed IT Support Service delivery over the past few years more than the advent of Managed Services Agreements (MSA for short). “Flat Fee” services have become all the rage as businesses seek opportunities to obtain meaningful and reliable IT services at a fixed monthly cost.

But how did we get to this point?


Evolution of Managed Services


The following is a synopsis of the evolution of modern day IT managed services.


Internet Age


With the advent of network computing in the 1990’s many organizations sought to build out infrastructure teams to service the rapidly expanding needs of their employees. Buildings were wired, internet connectivity delivered, and hordes of new computers were placed on workers' desks all across the world. At first, organizations hired PC Support Specialists, Network Technicians, and Systems Engineers. However; the complexity of these environments quickly grew beyond the ability of a few individuals, and the modern day infrastructure-oriented technology firms were born.


Break-Fix Support Model


Organizations that could no longer completely handle day-to-day operations on their own were greeted by a "pay as you go' - “break-fix” approach to escalated support help. This model fulfilled the immediate need; however, lacked the proactive approach needed to actually leverage all the new technology.


Proactive Need


Businesses rapidly learned just how important their systems were when problems started to arise that affected business operations. A need quickly developed to standardize support models, proactively monitor systems and networks, and align technology to the business. However with the growing complexity of systems and sheer number of new technologies being deployed, more outside help was required.




Many of today’s small and medium sized businesses simply do not have the expertise to manage every aspect of the network and systems infrastructure. With so many new technologies, support for a way of tapping expertise for an on-demand basis was needed.


Dawn of Managed Services


Managed Services began when large companies with increasingly large and complex Wide Area Networks (WAN for short) sought to push the responsibility of managing their networks to providers. After all, they had the expertise and scale needed to properly administer, monitor, and support their own services and network hand-offs. As part of this evolution, a whole new industry of third party monitoring and administration tools developed to further improve the critical everyday aspects of monitoring and maintaining an environment.


These same companies liked the model so much that they began to seek managed services for servers, backups, and even help desk support. They looked for anything that could be packaged up and done by a third party better, faster, and cheaper than their own internal IT Staff.


Managed Services for Small and Medium Sized Businesses


Naturally, smaller businesses wanted in on the action too. They had many of the same problems as large enterprise companies; however, could not readily afford the same services. With this increasing demand, a few of the traditional break-fix oriented IT support companies evolved to provide managed services to their customers. What followed was an avalanche of providers jumping into the fray to provide fixed pricing to their customers.


Problems Arise


Business was looking to save money and providers were excited by the prospect of having a fixed revenue stream. But how do you price such services? The answer can be complex, but it lies in balancing three key components to a Managed Service Agreement. Unfortunately many businesses and providers still miss the mark.

  1. Proactive Support and Monitoring. Responsibility is key to any managed service arrangement. Without it, the business that relies on such services will have some serious buyer’s remorse and the provider might find themselves in an unsustainable downward spiral of support issues. Providers must have developed standards, tools, and staff for taking over the responsibility of your environment.
  2. Service Level Agreement (SLA). In today’s world, a down computer or wider outage can seriously impact the operations of a business. To balance need with price the business, a provider must come to terms with an agreed upon SLA. This agreement dictates the contractually obligated response and resolution times to various events.
  3. Consultative Technology Solution Development. Maintaining isn’t good enough. A successful Managed Service Agreement requires the business and provider to work together to improve overall operations. This balanced approach allows for a win-win scenario.

The Promise of Managed Services


Managed Services done right have the ability to help businesses of all sizes operate more efficiently and compete on a global scale. Managed Services can allow for a business to put more investment and resources into the technologies and processes that actually help grow the business.

By partnering with a technology provider to outsource services, businesses can be better served by a third party organization that is dedicated to common practices across many clients.


The result should be that proactive support measures such as patching, backup administration, and security tasks are done in a timely, cost effective manner on a scale that internal IT staff simply cannot match.


Benefits of Managed Services

  1. Reduced overall IT support costs.
  2. Reducing or nearly eliminating downtime.
  3. Improved service for end users.
  4. Increased efficiency through better performing systems.
  5. Improved security via well maintained and monitored solutions.
  6. Reduced administrative overhead of day-to-day activities frees up valuable time for you to focus on your business.
  7. Peace of mind knowing your environment is in good hands.

How are Managed Services Priced?


There are several trains of thought when it comes to pricing managed services. Ultimately though, the service behind the solution is key. Typically the following illustrates today’s typical pricing models:

  1. Monitoring Only
  2. Per Device (Computer, Server, Tablet and Smartphone)
  3. Per User
  4. All-you-can-eat

Each model can be influenced by the specific amount of proactive maintenance required, SLA, and various value added services. Many service providers offered tiered flavors of each, which may include onsite visits and emergency after hours support.

The key to know is that every business is different and, generally speaking, services are customizable within certain parameters.

Though Managed Services can seem expensive at first, if implemented properly they will reduce operating expenditures.


Managed Services Warning Signs


It’s critical that a Managed Service Agreement be in the mutual interests of both the business and the provider.  Demand value but also understand that good service costs money. It’s important to match up your provider to the size and culture of your business. Here are some warning signs that your managed service agreement needs an overhaul:

  1. Frequent outages are a symptom that proactive maintenance is not being done well.
  2. Varying skill sets of responding technicians and engineers shows that the provider is struggling to keep up, cutting corners, or not focusing on training.
  3. Malware, viruses, or other security related issues.
  4. Lack of timely reporting or overtly canned and/or useless reports.
  5. Lack of frequent checkpoint meetings to maintain alignment to the business.
  6. Loss of trust in your provider’s services. Go with your gut here. If it doesn’t feel right, it’s probably worse than you think.

Looking for a Managed Service Provider?


If you are interested in learning more about Managed Services, consider ETS. We are Chicago area’s premiere provider of IT managed Services. ETS can conduct a free stability report and work with you to move your business forward.


Learn more now by contacting us for a free consultation!

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