Before you look at the question of whether to outsource part or all of your IT needs to a managed services provider (MSP) ask yourself this essential question, “what business are we in?” If you didn’t answer that with something that contains the words ‘information technology’ and ‘as a service’ then your business may use information technology, but that’s not your product.
The fact that you are looking into outsourcing all or part of your IT function to an MSP means you’ve already realized that your IT infrastructure is not what makes your bottom line profitable, nor does it directly grow your business.
According to CompTIA’s 4th Annual Managed Services Trends Study, ROI/Cost Savings only ranked fourth in factors driving the decision to use an MSP (tied with ‘access to new technologies’ in companies with less than 100 employees.)
While cost savings is a goal of using an MSP, improving the efficiency/reliability of IT operations was the number one reason for both large and small companies. In businesses with less than 100 employees, access to new technologies was as important as the cost savings.
Why It Isn’t All About Money, But It Really Is
Look at the list in the chart above—it’s easy to see what priorities drive the decision to find a good managed services provider. But hidden inside many of those other reasons are actually concerns about cost savings. The financial outlay necessary to gain the same benefits in-house is often out of reach of the average small to medium sized business. Let’s take a second to break down some of the factors driving the use of MSPs by businesses.
Improve Efficiency/Reliability of IT Operations. To get to the heart of the matter—unless your business has Information Technology as a core function, you are not likely to staff fully 24 hours a day, seven days a week. But, if you are backing up data or running internet or mobile-based applications, that’s exactly what you need. Partnering with an MSP will provide you with skilled IT personnel able to troubleshoot problems and resolve issues when they happen. The costs associated with staffing a similar 24/7 operation internally include space, salary, utilities, and redundant systems that are not already in place.
Enhanced Security/Compliance. In fields like health care, financial services, or other highly regulated businesses it’s not just a good idea to have good security, it’s mandated by law—and the penalties for noncompliance are steep. A trusted MSP vendor partner will ensure the safety of your data, both logically/virtually and physically. Many secure facilities require two-factor authentication for physical access and include surveillance and around-the-clock monitoring. When it comes to Logical Security, the right MSPs have invested in advanced monitoring software and intrusion detection systems, and they also can be counted on to run regular security audits. This level of security and compliance with regulatory requirements is often inaccessible to the non-enterprise level businesses. But again, the expenses associated with providing both types of security are high.
The cost of building a secure data center and providing the level of expertise required to monitor against data breaches successfully is significantly higher than trusting it to an MSP that has already built just such a system.
Access to New Technology. Technology changes quickly. Unless there is a business need for your company to maintain cutting edge software and hardware, you are unlikely to be constantly upgrading. But an MSP makes its living by having and providing access to state-of-the-art systems. Defending your critical data from today’s hackers requires keeping up with the latest intrusion techniques, patching software to end vulnerabilities as soon as they are discovered, and running the most efficient software on the fastest hardware. Technology is always cost-prohibitive in the early stages of adoption, but for both hackers and MSPs that’s what makes your profit. That’s what you invest in. For a small to mid-sized business, those kinds of investments aren’t always top-of-mind—or possible. So for many businesses, not having to budget for new software, security measures, and ongoing training for the people to make these things work is a definite cost savings.
Everything as a Service Is the Present and the Future
Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service are all components of Cloud services and all common offerings of today’s MSP. And, as the hidden costs of building it all and hiring people to work internally to design, maintain, and upgrade IT systems become more and more apparent, businesses are opting more often to outsource these functions to MSPs.
All of the above are important, but one of the key factors in deciding which MSP to do business with is evaluating how they integrate into your business. Dependable Service Level Agreements (SLAs) which clearly define what the customer can expect and what the expenses associated with those services will be, as well as solutions that are designed to take into account the individual needs of your particular operation are essential to choosing the right provider. Having the ability to update your IT strategy on a continual basis; and not needing to spend a lot of money on upgrading hardware, software and infrastructure are by far the strongest arguments for companies that choose to stay competitive through strategic allocation of resources.
While OnRamp’s managed hosting services address our customers’ infrastructure and data center needs, we’re frequently asked for help with services that we don’t provide. When that happens, we turn to our partner community, which includes a number of MSP’s with expertise in a wide variety of services. Doing so provides new recurring revenue opportunities for our partners and helps us to create comprehensive solutions for our customers.
If you are interested in tapping into our partner network or learning about the benefits of partnering with OnRamp, please contact me today for more details. I look forward to connecting with you.
Additional Resources On This Topic:
Managed Services and Outsourcing: Strategies to Optimize Business Growth
A Matter of Perception: What Managed Services Users Really Want
Managed Service Provider (MSP)
10 Outsourcing Trends to Watch in 2016