Exactly what is an MSP?

Scott Calonico

MSP is an acronym that is bandied about quite a bit, especially on this website (just look up there in the title). However, we still see a bit of confusion about the use of the term MSP.

It's okay to be confused about the acronym. After all, there are a lot of them in the tech world and, to make things even more confusing, there's more than one meaning out there for MSP.

Just type the term "What is an MSP"  into your favorite search engine and you'll see a wide range of different things pop up. Here are some of the search results that you're likely to see:

  • Minneapolis/St. Paul airport - Hosts both domestic and international flights. Free WiFi available in the terminal.
  • Minister of Scottish Parliament - In addition to being part of the national assembly in Westminster, Scotland also has its own Parliament in Edinburgh. Did you know that? Now you do.
  • Managing Successful Programs - A type of project management system.
  • Managed Service Provider - An IT company that provides services, such as server monitoring and maintenance, for a number of different clients.

It's this last definition we're concerned about.

Other terms in usage that mean the same thing as MSP include IT Support Provider, IT Managed Services Provider, Remote Monitoring and Management Provider, and many others. But they all pretty much mean the same thing.

How do MSPs work?

MSPs are chiefly used by small to medium sized businesses without a dedicated IT staff. A medical office, for example, will use computers for data management, records keeping and billing, as well as incorporating computer systems into their medical equipment for taking digital scans and analyzing data. This office might not need a full-time IT employee on hand to maintain all the equipment. However, when something goes wrong, they'll need someone right away to come in and fix the problem. This is where the MSP comes in.

The MSP business model

Most MSPs operate on two different service platforms: break/fix and managed contracts. A break/fix platform is exactly what it sounds like: when something breaks on a customer's computer, the MSP goes out to fix it. MSPs using this model will charge for equipment, as well as by the hour for replacing the computer parts. On a managed contract, the customer will pay the MSP a set service fee every month to watch and maintain all their computers. If something breaks, the MSP will come out and fix it, and no additional fee is charged because it's part of the contract.

SaaS and The Cloud

One of the terms that's currently being bandied about when talking about MSPs are "the cloud" and "SaaS". The cloud simply refers to the process of moving applications from server based technology to hosted technology available from anywhere. You're already using cloud technology if you use any Google applications, such as Google Docs. Microsoft currently offers many of it's Office programs in an online service called Office 365. These platforms are also sometimes referred to as SaaS, which stands for "Software as a Service". Instead of buying the software outright, you instead rent it at a fixed price, typically paid per month.

The Future for MSPs

Some analysts are predicting a bright future for MSPs, as companies start cutting costs by reducing IT staffs, while others think that MSPs might be in trouble as the big boys, Microsoft and Cisco, for example, start coming on board and penetrating the SMB (Small Medium Business) computer management market.