Let’s Talk Management: A Close-Up on the MSP

Topic: Web Hosting Business |

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For the small or medium-sized enterprise, IT technicians represent a major expense. Even when a small business can afford to hire one or two techies or developers, those employees are often spread so thinly that essential, specialized functions such as security get short shrift.

For this reason, MSPs, or managed service providers, have become extremely important; some of biggest MSPs, like Lucent, Checkpoint, and Nortel Networks, inhabit a very profitable niche. Although the dot-com recession has clipped the wings of some Web-related industries, the market for MSPs seems to be growing, and The Yankee Group predicts that it will to increase at a rate of approximately 20 percent annually.

In essence, MSPs are a subset of ASPs, or application service providers. However, instead of delivering focused payroll or sales tools over the Internet, MSPs offer Web-delivered network management, network monitoring or security services. The best MSPs are located in full-fledged NOCs, where they maintain their clients’ firewalls, messaging and call center, IP telephony or VPN systems; they offer businesses around-the-clock attention and the ability to response promptly to any network crisis. Since MSPs address only very specific network functions, they also allow clients to retain control of their own networks and data centers.

The feature that makes MSPs most appealing to small businesses is their affordability: due to their economies of scale, managed service providers can supply even state-of-the-art technology at a reasonable price. Like other ASPs, managed service providers assume all financial responsibility for upgrading and updating their software.

Does your company need the services of an MSP?

The answer may just be that it depends. Some of the services that MSPs provide are also offered by traditional hosting companies, and many large operations are capable of fulfilling these needs in-house. On the other hand, MSPs offer specialization; your host might supply you with network monitoring services, but an MSP whose core competency is network security might be more inclined to stay on top of upgrades and emerging technologies.

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