Why are solution providers shifting to managed services models?
In order to be more proactive in identifying and addressing issues in customer environments before they have a chance to become work-stopping outages, an increasing amount of service providers are moving toward a managed services model. Service providers differentiate themselves from their competitors and scale their services by utilizing tools and technology to deliver repetitive services such as patch management and disk optimization.
In addition to an increase in profitability, managed service providers (MSPs) also receive annuity-based revenues that compound monthly as new managed services customers are brought on board. This eliminates the peaks and valleys of reactive break-fix or transaction-based professional services billing over time. Furthermore, invoicing for managed services occurs in advance of service delivery which positively impacts cash flow for the MSP.
This was first published in September 2008