White Paper – July 2015

Surhit Dey1-908-448-2429+91 9836426589

Managed IT Services

INDEX

Page

1. What is Managed IT services? 2

2. History 3

3. Why do companies need managed services? 4

4. Growth of managed services 5

5. Conclusion 6

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What is Managed IT Services?

Elementary level definition of managed IT service is proactive management to maintain & monitor company’s IT system on a regular basis by a third party who has the expertise to do so. The third party here is known as Managed IT Service Provider or MSP. The company is charged a monthly fee to get this service from the MSP.

MSP also have extensive package to offer to its customer, these include software and technology updates, firewall monitoring, document management, data security, data storage, intrusion detection and restoration of operations.

To keep labor costs in check and improve efficiency, most MSPs employ remote monitoring and management (RMM) software to keep tabs on clients' IT functions. RMM software lets MSPs remotely troubleshoot and remediate issues with servers and endpoint devices. With RMM, MSPs can manage numerous customers' IT systems simultaneously.

The proactive management of MSP ensures system optimization which in turn increases employee productivity and therefore company profitability. MSP is equipped with technology to prevent any problem to occur or detect it before hand and resolve it so that the system functions uninterrupted.

In general MSP does the maintenance & monitoring remotely. In some cases they go to the customers place to provide the service.

Small and medium-sized businesses are typical MSP customers. Many smaller companies also hire MSP to obtain IT expertise as they have limited in-house IT capabilities. Government agencies, facing budget pressure and hiring limitations, also contract MSP to supplement in-house IT staff.

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History

In the early 1990’s technology service was on a “break/fix” basis. There were many small companies building PC. Then many local hardware engineers started assembling PC as per the end users requirement. If the end user had some problem with the computer they used to call someone to fix it for a charge. It was not unusual that many a times the person who used to come for the service was the person who built it.

Later, came large companies to dominate PC manufacturing in a large scale. They have a large network of customer base. To provide support to its customers they have their own technical team. When the customers have any problem with their computer they get the support from the manufacturer.

In the 2000’s, industry shifted dramatically away from “break/fix” model, as early versions of managed services emerged. Computer companies started scheduling regular visits with the customers ensuring the system is working properly and to prevent a problem to occur beforehand.

With the enhancement in technology and increasingly large and complex Wide Area Network (WAN) companies started facing problem in controlling the complex IT operational system and the business simultaneously. They started looking for experts who can take the proactive responsibility to manage the IT system so that they could focus on the business. In other words they were looking for anything that could be packaged up and done by a third party better, faster and cheaper than their own internal IT Staff.

With this increasing demand a few of the traditional break-fix oriented IT support companies evolved to provide managed services to their customers. This is what we know today as Managed Service Providers or MPS. What followed was an avalanche of providers jumping into the fray to provide fixed pricing to their customers.

Today, it’s hard to imagine any company operating without MSP. Over the years, the learning is that proactive, preventive care beats always waiting until something breaks and then fixing it. Of course, problems can and do come up occasionally – and it’s also part of job of MSP to respond quickly and efficiently when they do. The importance of timely, reliable service, whether to prevent or to fix problems, is one lesson of the shift from fee-for-service to managed services today.

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Why do companies need managed services?

In this fast and rapid changing world of politics, policies, funding, goals & technology, companies demand of fleet of experts to not only maintain the systems but to exploit them to full

advantage. That’s why companies need managed services.

Few points that are fueling increased demand for managed services are:

a.) 24 X 7 X 365 support: A Managed Service Provider works twenty-four hours a day, three-sixty-five days a year. Using sophisticated software which pro-actively watches the health of critical equipment and services running the business. No matter what time a crisis hits, there would be a team ready to resolve it as soon as it happens. Trying to maintain that level of support with an in-house IT crew is an expensive proposition.

b.) Early issue detection: Often, day-to-day computer issues starts without being noticed. Managed IT providers run reporting and monitoring tools that detect issues and report back whenever a potential problem is discovered. That way, it can be fixed before it causes frustration and downtime for the business.

c.) Remote technical support: Many issues can be solved remotely without the need for an on-site visit. Utilizing remote access reduces the expenses of the IT provider which are then passed on to the customer. This also grants faster response times since the technician doesn’t need to physically go to the customer’s site.

d.) Manage Increasingly complex IT solution: With both hardware and software components of IT systems constantly evolving, businesses with limited resources may find it very difficult to cope up with the same. But with Managed Services, they are able to enjoy the advantages of the latest IT solutions at a fraction of the cost enabling MSP to provide the best possible service to their clients.

e.) Capacity Planning Information: Monitoring the capacity and performance of the client’s file system space, database size, network bandwidth and more, helps to capture the information and held it as historical data. The client has access to this data and can use it to analyze trends in performance or capacity associated with a specific device or database and to make educated, informed decisions about future IT capacity and performance needs as a result.

f.) Managing compliance: The marketplace is becoming more and more complex and competitive. In this situation meeting different regulatory compliances has become a fundamental need. Managed Services Providers help these companies not only fully understand the requirements of these regulations, but also comply with them.

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g.) Cost affective: Company hires a full time IT staff to take care of the system. His or her worth might come into play say after 3 or 4 months, during the down time. In the mean time he/she is paid for these 3 or 4 months as well. During this down time the company is also paying to the other employees despite a major loss of productivity. It becomes a costly affair. However, Managed IT is based on a flat-rate payment model where the company pays to prevent downtime, both greatly reducing downtime and minimizing unexpected costs.

Growth of managed services

The study by research and consulting firm MarketsandMarkets predicts that the global managed services market is expected to grow from $107.17 Billion in 2014 to $193.34 Billion by 2019, at an estimated CAGR of 12.5% from 2014 to 2019.

TechNavio's analysts forecast the Global Managed Services market to grow at a CAGR of 13.7 percent over the period 2014-2019.-(Technavio is a leading technology research and advisory company with a global coverage)

Recent research by Gartner supports this view: "The market opportunity arising from broad technology changes is creating a digital business opportunity that is forcing a restructuring in strategy, talent, portfolio and organization within services providers," said Susan Tan, research vice president at Gartner. The impact of these technology changes coupled with increasing demand for Managed Services is revolutionizing the IT industry, its channels and supply models, as new players emerge to lead the market.-( Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company )

The new CompTIA study Trends in Managed Services reveals that among current users of managed services, 46 percent of firms have trimmed their annual IT expenditures by 25 percent or more as a result of their shift to managed services, including 13 percent that have slashed annual IT expenditures by 50 percent or more. An additional 50 percent of organizations have saved between 1 percent and 24 percent in IT costs annually.

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Conclusion

In this volatile business world, where technology is upgrading itself in rocket speed and making it more complex, it is becoming very difficult for companies who are not keeping pace with it. It is like putting legs in two different boats and steer it to perfection- one being their business and the other being the complex IT system. Both go side by side to succeed in business. If one sinks the business as a whole sinks. So it makes sense to hand over the boats to specialized sailors who are experts- company can focus on their main stream business while MSP can focus on the IT system. This will in turn help the business to boom.

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