Business administration |
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Management of a business |
Managed services is the practice of outsourcing the responsibility for maintaining, and anticipating need for, a range of processes and functions, ostensibly for the purpose of improved operations and reduced budgetary expenditures through the reduction of directly-employed staff. [1] [2] [3] It is an alternative to the break/fix or on-demand outsourcing model where the service provider performs on-demand services and bills the customer only for the work done. [4] [5]
Adopting managed services is intended to be an efficient way to stay up-to-date on technology, have access to skills and address issues related to cost, quality of service and risk. [6] [7] [8] As the IT infrastructure components of many SMB and large corporations are migrating to the cloud, [9] with MSPs (managed services providers) increasingly facing the challenge of cloud computing, a number of MSPs are providing in-house cloud services or acting as brokers with cloud services providers. [10] [11] A recent survey claims that a lack of knowledge and expertise in cloud computing rather than offerors' reluctance, appears to be the main obstacle to this transition. [12] [13] For example, in transportation, many companies face a significant increase of fuel and carrier costs, driver shortages, customer service requests and global supply chain complexities. Managing day-to-day transportation processes and reducing related costs come as significant burdens that require the expertise of Transportation Managed Services (or managed transportation services) providers. [14] [15]
The evolution of MSP started in the 1990s with the emergence of application service providers (ASPs) who helped pave the way for remote support for IT infrastructure. From the initial focus of remote monitoring and management of servers and networks, the scope of an MSP's services expanded to include mobile device management, managed security, remote firewall administration and security-as-a-service, and managed print services. Around 2005, Karl W. Palachuk, Amy Luby, Founder of Managed Service Provider Services Network acquired by High Street Technology Ventures, and Erick Simpson, founder of Managed Services Provider University, were the first advocates and the pioneers of the managed services business model. [16] [17]
The first books on the topic of managed services: Service Agreements for SMB Consultants: A Quick-Start Guide to Managed Services [18] and The Guide to a Successful Managed Services Practice [19] were published in 2006 by Palachuk and Simpson, respectively. Since then, the managed services business model has gained ground among enterprise-level companies. As the value-added reseller (VAR) community evolved to a higher level of services, it adapted the managed service model and tailored it to SMB companies.
In the new economy, IT manufacturers are currently moving away from a "box-shifting" resale to a more customized, managed service offering. In this transition, the billing and sales processes of intangible managed services, appear as the main challenges for traditional resellers.
The global managed services market is expected to grow from an estimated $342.9 Billion in 2020 to $410.2 Billion by 2027, representing a CAGR of 2.6%. [20]
In the information technology area, the most common managed services appear to evolve around connectivity and bandwidth, network monitoring, security, [21] virtualization, and disaster recovery. [7] Beyond traditional application and infrastructure management, managed services may also include storage, desktop and communications, mobility, help desk, and technical support. In general, common managed services include the following applications.
Name | Functions | Providers |
---|---|---|
Information services / Cloud | * Software – production support and maintenance * Authentication * Systems management * Data backup and recovery * Data storage, warehouse and management * Cloud transformation * Network monitoring, management and security * Human Resources and Payroll | IT managed services provider HCM Platforms |
Business-to-business integration | * Supply chain management * Communications services (mail, phone, VoIP) * Internet * Videoconferencing | Internet service provider, Video managed services provider |
Supply chain managed services [22] | * Supply chain planning, monitoring and control * Sourcing and procurement * Logistics and distribution | Supply chain managed services provider |
Transportation [23] | * Daily transportation planning * Process execution and enforcement (freight audit/accounting & payment) | Managed transportation services provider |
Marketing | * Marketing strategy, planning * Integrated marketing / advertising agency services (graphic design, copywriting, PPC, social media, web design, SEO) | Marketing managed services provider, outsourced marketing providers |
Media | * Systems operation and support services * Broadcast managed services | Media managed services provider |
Water [24] | * Water quality testing * Water storage and transfer systems management * Smart irrigation monitoring, scheduling | Water managed services provider |
Power [25] | * Advanced metering infrastructure * Smart grid deployments | Power managed services provider |
A Managed IT Services Provider [26] (also known as an 'MSP') is a third-party service provider that proactively monitors & manages a customer's server / network infrastructure, cybersecurity and end-user systems against a clearly defined Service Level Agreement (SLA). Small and medium-sized businesses (SMBs), nonprofits and government agencies hire MSPs to perform a defined set of day-to-day management services so they can focus on improving their services without worrying about extended system downtimes or service interruptions. These services may include network and infrastructure management, security and monitoring.. [27] [28] Most MSPs bill an upfront setup or transition fee and an ongoing flat or near-fixed monthly fee, which benefits clients by providing them with predictable IT support costs. Sometimes, MSPs act as facilitators who manage and procure staffing services on behalf of the client. In such context, they use an online application called vendor management system (VMS) for transparency and efficiency. A managed service provider is also useful in creating disaster recovery plans, similar to a corporation's. [29]
The managed services model has been useful in the private sector, notably among Fortune 500 companies, [30] and has an interesting future in government. [31]
Main managed service providers originate from the United States (IBM, Accenture, Cognizant), Europe (Atos, Capgemini) and India (TCS, Infosys, Wipro).
Company | Country | 2017 revenue[ needs update ] |
---|---|---|
IBM | United States | $79bn |
Accenture | United States | $35bn |
Cognizant | United States | $18bn |
Tata Consultancy Services | India | $18bn |
Atos | Europe | $16bn |
Capgemini | France | $15bn |
Infosys | India | $10bn |
Wipro | India | $8.5bn |
HCL Technologies | India | $7bn |
ATEA | Europe | $4.7bn |
Computacenter | United Kingdom | £4.4bn |
Datapipe | United States | $2.4bn |
ALTEN | France | $2.4bn |
Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity which otherwise is or could be carried out internally, i.e. in-house, and sometimes involves transferring employees and assets from one firm to another. The term outsourcing, which came from the phrase outside resourcing, originated no later than 1981. The concept, which The Economist says has "made its presence felt since the time of the Second World War", often involves the contracting out of a business process, operational, and/or non-core functions, such as manufacturing, facility management, call center/call center support.
A service-level agreement (SLA) is an agreement between a service provider and a customer. Particular aspects of the service – quality, availability, responsibilities – are agreed between the service provider and the service user. The most common component of an SLA is that the services should be provided to the customer as agreed upon in the contract. As an example, Internet service providers and telcos will commonly include service level agreements within the terms of their contracts with customers to define the level(s) of service being sold in plain language terms. In this case, the SLA will typically have a technical definition of mean time between failures (MTBF), mean time to repair or mean time to recovery (MTTR); identifying which party is responsible for reporting faults or paying fees; responsibility for various data rates; throughput; jitter; or similar measurable details.
AppNeta is a computer software company headquartered in Boston, Massachusetts, with research and development based in Vancouver, British Columbia.
A vendor management system (VMS) is an Internet-enabled, often Web-based application that acts as a mechanism for business to manage and procure staffing services – temporary, and, in some cases, permanent placement services – as well as outside contract or contingent labor. Typical features of a VMS application include order distribution, consolidated billing and significant enhancements in reporting capability that outperforms manual systems and processes.
Level Platforms was a provider of remote monitoring and management (RMM) software products and services for managed services providers (MSPs), IT service providers and valued added resellers (VARs) that provide IT support services for small and medium size businesses (SMBs) and branch offices.
Outsourcing relationship management (ORM) is the business discipline widely adopted by companies and public institutions to manage one or more external service providers as part of an outsourcing strategy. ORM is a broadly used term that encompasses elements of organizational structure, management strategy and information technology infrastructure.
Cloud computing is the on-demand availability of computer system resources, especially data storage and computing power, without direct active management by the user. Large clouds often have functions distributed over multiple locations, each of which is a data center. Cloud computing relies on sharing of resources to achieve coherence and typically uses a pay-as-you-go model, which can help in reducing capital expenses but may also lead to unexpected operating expenses for users.
Samsung SDS Co., Ltd., established in 1985 as a subsidiary of Samsung Group, is a provider of Information Technology (IT) services, including consulting, technical, and outsourcing services. SDS is also active in research and development of emerging IT technologies such as Artificial Intelligence (AI), Blockchain, Internet of Things (IoT) and outsourcing in engineering. In 2019, Samsung SDS reported a net profit of 750.4 billion won, an increase of 17.5% year-on-year. The company is estimated to have the 11th most valuable brand among global IT service companies, at US$3.7 billion as of January 2020. Samsung SDS has headquarters in South Korea and eight other overseas subsidiaries, one in America, Asia-Pacific, China, Europe, Latin America, Middle East, India, and Vietnam.
Dynamic Infrastructure is an information technology concept related to the design of data centers, whereby the underlying hardware and software can respond dynamically and more efficiently to changing levels of demand. In other words, data center assets such as storage and processing power can be provisioned to meet surges in user's needs. The concept has also been referred to as Infrastructure 2.0 and Next Generation Data Center.
In computing, managed security services (MSS) are network security services that have been outsourced to a service provider. A company providing such a service is a managed security service provider (MSSP) The roots of MSSPs are in the Internet Service Providers (ISPs) in the mid to late 1990s. Initially, ISP(s) would sell customers a firewall appliance, as customer premises equipment (CPE), and for an additional fee would manage the customer-owned firewall over a dial-up connection.
Netcracker Technology Corp., a wholly owned subsidiary of NEC Corporation, is a provider of business support system (BSS), operations support systems (OSS) and software-defined networking (SDN) and network functions virtualization (NFV) solutions. The company also offers professional services, as well as managed services.
IT as a service (ITaaS) is an operational model where the information technology (IT) service provider delivers an information technology service to a business. The IT service provider can be an internal IT organization or an external IT services company. The recipients of ITaaS can be a line of business (LOB) organization within an enterprise or a small and medium business (SMB). The information technology is typically delivered as a managed service with a clear IT services catalog and pricing associated with each of the catalog items. At its core, ITaaS is a competitive business model where businesses have many options for IT services and the internal IT organization has to compete against those other external options in order to be the selected IT service provider to the business. Options for providers other than the internal IT organization may include IT outsourcing companies and public cloud providers.
Managed private cloud refers to a principle in software architecture where a single instance of the software runs on a server, serves a single client organization (tenant), and is managed by a third party. The third-party provider is responsible for providing the hardware for the server and also for preliminary maintenance. This is in contrast to multitenancy, where multiple client organizations share a single server, or an on-premises deployment, where the client organization hosts its software instance.
HP Cloud was a set of cloud computing services available from Hewlett-Packard that offered public cloud, private cloud, hybrid cloud, managed private cloud and other cloud services. It was the combination of the previous HP Converged Cloud business unit and HP Cloud Services, an OpenStack-based public cloud. It was marketed to enterprise organizations to combine public cloud services with internal IT resources to create hybrid clouds, or a mix of private and public cloud environments, from around 2011 until 2016.
Karl W. Palachuk is a public speaker and an author, widely recognized as one of the pioneers of managed services. Palachuk has trained technology consultants and business owners all over the world. He's the author of fifteen books, including several of the best-selling books on Amazon for the topic "managed services.”
Pythian Services Inc., commonly known as Pythian, is an American and Canadian multinational corporation that provides data and cloud-related services. Pythian Services provides services for Oracle, SQL Server, MySQL, Hadoop, Cassandra and other databases and their supporting infrastructure. It also provides transformation services that include cloud migration services, cloud managed services and analytics data platform design and management products and services. Pythian has partnerships with major public cloud vendors including Amazon, Google and Microsoft.
Remote monitoring and management (RMM) is the process of supervising and controlling IT systems by means of locally installed agents that can be accessed by a management service provider.
MSP360, formerly CloudBerry Lab, is a software and application service provider company that develops online backup, remote desktop and file management products integrated with more than 20 cloud storage providers.
Datto was an American cybersecurity and data backup company. Founded in 2007 in Norwalk, Connecticut, in 2017 it became a subsidiary of the Vista Equity Partners and merged with Autotask Corporation before being acquired by Kaseya in late 2022 and dissolved, being retained as a brand name only.
Data center management is the collection of tasks performed by those responsible for managing ongoing operation of a data center. This includes Business service management and planning for the future.
Amid the COVID-19 crisis, the global market for IT Outsourcing estimated at US$342.9 Billion in the year 2020, is projected to reach a revised size of US$410.2 Billion by 2027, growing at a CAGR of 2.6% over the analysis period 2020-2027.