Why are solution providers shifting to managed services models?

Managed service providers are more proactive in addressing customers' issues and therefore experience increased profits and monthly compounded annuity-based revenues. Learn about the benefits of offering managed services and how to stand out from the competition.

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.

About the author
Managed services expert Erick Simpson is the vice president and CIO of Intelligent Enterprise and MSP University. An acclaimed speaker and trainer, Erick has authored The Guide to a Successful Managed Services Practice: What Every SMB IT Service Provider Should Know and MSP University's The Best I.T. Sales & Marketing Book Ever! Erick's prior experience includes overseeing the design, development and implementation of enterprise-level help desks and call centers for Fortune 1000 organizations.

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

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