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What are Managed Service Providers?

By David White
Updated May 16, 2024
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A managed service provider supplies businesses with information technology needs via the Internet. These needs are typically network monitoring, remote data backup, and network security, but can also include other more new age technology services such as Virtual Private Networks and Voice Over Internet Protocol services. A business will contract with a managed service provider to fill certain needs that are met more cost effectively by outsourcing than by purchasing and supporting equipment in-house. This sort of arrangement makes good economic sense for both small and large companies, especially since managed service providers specialize in technologies that all businesses might not have the resources to support.

For example, a company that specializes in remote data backup does this all the time, all day long, for clients near and far. This company will have all the latest equipment and all the latest encryption techniques and protocols, as well as a vested interest in making sure that its services are top-notch. Because security is its focus, this company has security on the front burner all the time. The company that hires this managed service provider to produce remote data backups, on the other hand, will necessarily have other concerns that struggle for notice in the company's daily business.

Outsourcing other parts of a company's business makes economic and technological sense as well, especially if it's something like Voice Over Internet Protocol (VoIP), which is continually updated with newer and more powerful functionality. Virtual Private Networks (VPNs) also necessarily have security protocols that are nearly always rotating or changing to provide protection against hackers. Many companies find it easier to take advantage of a VPN provided by a managed service provider; in this way, they spend only money, not time and money.

In addition to Internet telephony, other kinds of telephone services can be outsourced to a managed service provider. For example, a large catalog company that boasts a large volume of telephone sales and service might opt to hire a managed service provider as a call center. This is general practice nowadays, even if you dial 411. The catalog company might even hire a different managed service provider to process all of the orders it receives. Outsourcing is the name of the game here in more ways than one. The general idea behind a managed service provider is using Internet-related procedures to give companies things that they can't easily or inexpensively get for themselves.

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Discussion Comments

By SZapper — On Jun 19, 2011

@indemnifyme - The article is right, managed IT services are really the way to go these days. The advent of cloud computing and reliable networks has made it easier and easier to provide services over the internet.

There is one small drawback though: if the internet goes down, the company purchasing the services is totally out of luck!

By indemnifyme — On Jun 17, 2011

My company uses managed network services providers for a VPN phone system. The system is really amazing and every time the technology changes the company automatically updates our system. We don't have to worry about anything except knowing how to use the actual physical phone on our desks!

By MrMoody — On Jun 17, 2011

My beef is with companies that outsource their call centers overseas. I am sure it makes perfect economic sense, and no disrespect intended for the overseas workers whom I believe are hard workers, but sometimes it’s difficult to understand their English.

If I talk to someone with a really heavy accent, then I have to ask them to repeat themselves several times before I can understand them. It can lead to a very frustrating customer service experience.

Some experiences are better than others, and again, I’m not knocking their work ethic. I just think that American companies would better serve their customers if they keep their call centers in the United States, even if they have to outsource other operations.

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