A managed service provider or MSP is a company that receives compensation for services it provides to other companies or organizations. Many businesses today work with consulting firms who provide information technology services to help keep the networks of these organizations running smoothly.
Services that are used infrequently or are more expensive to hire and train existing staff within an organization are usually outsourced to msp firms. Many companies outsource things like call centers or technical support because it can be cheaper in the long run to do so.
An example of a company using an msp is with a cable provider that brings television and internet services to customers all over the country. The corporate call center and phone support office might be in New York and the company may service customers in California. By working with a network of managed service providers, the cable company can dispatch technicians and pay a contracted fee to the msp in California rather than keeping a fully staffed office in California to answer service calls.
Many individuals or households rely on msps everyday to provide services such as telephone, Internet, television, water delivery, among other services. Sometimes an msp can be a party that works between two organizations to provide a service to both of them. A law firm providing services to companies working to merge might be an example of an msp acting as a middleman between two other parties.
Many services that are used by millions of people every day come from managed service providers and in some cases the end user does not even realize this is the case. However, any time a service is used without many tangible goods, the Internet, television, and even pizza delivery, these services are provided by an msp. In some cases the manufacturer is also the msp and will not be specifically compensated for the service portion, but for the product itself.
Managed Service Providers may also add value to another service. For example, when a manufacturer outsources the support of their products to another company, the third party may add other things to the product. Perhaps they will have onsite support for one price, customization or modification and support for another price, or support via chat and email for a lower price. If the third party msp can add other services or values to the original product, this will make the msp even more valuable to the end user.