What is a managed service?
Author : Matt Yarranton
4 March 2020

If computers are an essential part of your business you will probably have someone looking after them for you, but what type of service are you getting from them?  Have you heard the expression “Managed Service” or “Break/Fix”?

You may have heard these expressions and wondered what they mean and how they differ. First, let’s understand how managed services came to exist.

Managed Services – Brief History

In the early days, everything was centralised; businesses used mainframes and hired their own teams to look after them.   Mainframe software was written in house and the people who wrote the software were on the payroll so they could fix any problems.  Computers were just dumb terminals, so there was very little to go wrong. If it broke, you just put a new terminal on the desk and away you went.

Then IBM introduced its Personal Computer.  The PC started replacing the dumb terminal, and network servers like Novell Netware and Windows NT started to appear.  Processing was sitting away from the mainframe and PCs were far more expensive than the dumb terminals.  PCs ran off-the-shelf software and, if they broke, it was not easy or cheap to replace them.

New complexities call for new skills and teams, formed to deal with PCs and servers. As the balance shifted further away from centralised computing, so the PC and server teams grew. Some were big enough to break off and become companies in their own right and sell their services back to their parent company, as ITNet did with Cadbury’s.

Companies like ITNet are IT outsourcing companies, not Managed Service Providers.  Early outsourcing was quite crude, effectively taking on all of the IT operation and existing IT staff. 95% of the team involved in the outsourced service would be physically present on the customer’s site so that the service could be delivered. Outsourcing companies provide the teams to run a customer’s IT department.   However, they are reactive to issues, waiting for problems to occur before fixing them. This is known as “Break/Fix“; you wait for something to break, and then you fix it.

Over the next 25 years, things evolved and Managed Services were developed and refined. It is now possible to offer a managed service for almost any piece of IT equipment, software or service. Thanks to the internet and cloud computing, everything can be managed remotely and it is usually not necessary to install dedicated systems physically at the customer’s site.

Managed Service or Break/Fix – What is the Difference?

The key differentiator of a Managed Service over Break/Fix is that Managed Services are proactive and not reactive. A managed service does not wait for something to break before fixing it. It monitors and maintains your systems so that they are much less likely to break in the first place.  In a Break/Fix model you pay a small monthly retainer and are charged by the hour for work that is required.  With a Managed Service you pay a fixed monthly fee but all support is included, and you are only charged for new software, hardware, project work, and any changes that you request.  Managed Service Providers (MSPs) will typically bundle everything into the service and manage the lot for a fixed monthly fee.  This can also include hardware and software if you wish, and your other  IT systems such as:

  • Network and WiFi
  • PCs
  • Servers
  • Backup, Disaster Recovery and Business Continuity
  • Printers
  • Security (Firewalls, Antivirus, etc)
  • Office 365
  • Line of business software 

While a system is under the management of the MSP, it is in their interest to ensure the system is monitored, up to date and secure, meaning that it is less likely to fail and your business is less likely to experience disruptions.  In the event of any issue, the MSP is most likely to know about this before you do and will fix it remotely, perhaps before you were aware there was even a problem.  Great huh?

Of course, you have to pay upfront for this and some do not see the immediate benefit, but it is cheaper in the long run and MSP costs are predictable; IT outage costs are far from that!  According to CompTIA, 46% of companies that use managed IT services have cut their annual IT costs by 25% or more. 

Think of IT this way…

Think of MSP costs like insurance; you wouldn’t drive your car without insurance, or fail to insure your home.  However, you are more likely to have an IT failure if your systems are not properly looked after than you are to have a car accident or property stolen.  Just something for you to think about 😉

More Content

IT Security Still Top Concern For SMBs

A new report from Kaseya reveals that IT Security is still the top concern for small and medium-sized businesses.  The “2019 State of IT Operations for Small and Midsize Businesses” survey took input from more than 400 global respondents and reveals that 32% of...

What’s coming in Windows 11?

Microsoft has just announced (in a typically 'West Coast'​ way) what's coming in Windows 11.  Here is a rundown of what was announced at the event. Windows 11 Interface Design The first impression visually is that it looks kind of like Linux merged with Mac OSx. The...

Get on top of this now if any of your staff are hybrid working

People are increasingly doing their work remotely and hybrid working has become the new norm. Despite the fact that it has been more than two years since many of us were forced to work from home, too many organisations still do not have the appropriate cyber security...

VIDEO: How to Provide Remote Support for FREE with Quick Assist

This Two Minute Tech Tip shows you how to view or control someone else's screen for FREE. As an IT managed service provider we have lots of tools we have to pay for to help us support our clients. However, if you've ever been in a situation where you are trying to...

VIDEO: How to Work with Files in Teams

Good morning everyone. Welcome to another Tuesday Two Minute Tech Tip! This is another tip for Microsoft Teams on how to work with files in Teams. Did you know you can use Teams like a file server to store and work on files across your whole business? MS Teams is not...

What is the Microsoft Modern Workplace?

Microsoft has been hard at work over the past few years to create a new "modern" workplace. Sounds great right, but what is this, and what are its benefits? The Microsoft Modern Workplace is designed to make it easier for employees to collaborate online, and to help...

What are the benefits of outsourcing IT support?

Have you ever started a DIY task only to wish you had just called in an expert?  Your IT support should be no different. Many business owners think that they can handle their IT systems themselves.  However, unless they have the experience and finger on the pulse of...

10 Simple Tips for Avoiding Phishing Scams: How to Stay Safe Online

10 Simple Tips for Avoiding Phishing Scams: How to Stay Safe Online What is Phishing? Phishing is a common online scam in which cybercriminals try to trick you into sharing personal information, such as passwords and credit card numbers. Phishers often use email or...

VIDEO: How to Sync Teams Files to Your Computer

Hello everyone, welcome to a new Tuesday Two Minute Tech Tip.    👉 Do you use Microsoft 365?    👉 Do you need to collaborate on documents with your colleagues?    👉 Do you want to do this using the same familiar Windows...

7 ways to secure small business IT

It is hard enough running a business without having to worry about how to ensure your computer systems and data are secure from bad guys.  To help you out, we have put together a list of the top 7 things that you should do to secure your small business IT systems. 1....
Share This