The MSP Association defines a management service
provider (MSP) as a company that delivers information
technology infrastructure management services over a
network to multiple customers on a subscription basis.
Traditionally, MSPs either provide tools to the
customer to enable them to manage their network
in-house, or they manage customer networks from their
own network operations center (NOC). Apart from
traditional MSPs, certain infrastructure providers
offer a complete turnkey solution under the managed
services umbrella. They not only host customers'
applications, but also manage the application and
accompanying hardware and software, thereby providing
a managed service.
The benefits of outsourcing to an MSP, outlined
later, can be quantified. However, in today's
marketplace, with its proliferation of vendors and
their accompanying menus of services, one thing is
critical: you must choose your outsourcing partner
CHARTING THE MSP MARKET
To eliminate some of the confusion caused by the glut
of MSP models in this new and immature market, most
MSPs can be segmented into two business models: NOC-in-a-box
The NOC-in-a-box MSP provides the hosted management
application on a lease basis to the end customer, much
like a hosted application model offered by an
application service provider (ASP). This MSP hosts the
management application; handles maintenance, back-ups
and upgrades; and provides the user interface to the
customer. The customer then manages the networks,
systems and applications using the tools provided by
the MSP. This model allows the customer to retain
control of what is managed and how it is managed. In
reality, this is only partial outsourcing; however, it
can reduce overall infrastructure management costs.
For example, the customer's IT team needs operators to
monitor screens, but highly paid network analyst
positions can be reduced or eliminated.
The NOC-for-hire is a full-service MSP, offering
network management tools plus processes and operations
staff. At the MSP's NOC, an operations staff monitors
the customer's network and manages its day-to-day
operational tasks. Although the monthly subscription
charge is higher for this type of service, it provides
significantly higher value.
It is important to note that some MSPs offer both
models to enable the customer to choose their
The cost for MSP services can range widely
depending on the type of MSP and the services it
offers. Some MSPs specialize only in certain functions
such as help desk, security or database management,
while others offer an ' la carte menu of
services, enabling a company to select what it needs.
Monthly subscription fees for ' la carte
service vary greatly -- from $500 to $10,000 or more,
depending on the size of the managed network. Some
MSPs, however, charge a flat monthly fee to manage an
entire network, regardless of its size and complexity.
BENEFITS OF OUTSOURCING TO AN MSP
Regardless of the business model adopted by an MSP,
the following tangible benefits can be realized by
outsourcing your network and systems management to
such a company:
- Your organization can focus on its core
competency. With no need for a dedicated NOC or IT
staff, the overhead associated with retention and
training of network analysts and engineers is
- Your infrastructure software and hardware costs
are reduced, and the MSP handles such tasks as
routine system maintenance, backups, new versions
- Your infrastructure management costs are
predictable. In contrast, in-house network
management typically consists of numerous and
often costly unknowns. For example, the costs to
replace a network analyst lost through attrition
could be significant, especially when recruitment
and training costs are included.
Services Offered By MSPs
If you take a closer look at MSPs, one thing is
certain: all offer different types of services, which
makes it difficult to compare them. However, a
cross-section of MSPs reveals that many perform one or
more of the following functions as part of their
Availability and performance management
- LAN/WAN networks and equipment such as routers
- Key servers and the applications running on
- Routine systems management such as monitoring of
disk, CPU, memory utilizations, log file and error
- Firewall and load balancing services
- Capacity and bandwidth management
- Passive monitoring and reporting
- Intruder detection
- Access control management
- Database administration
- Database and application performance tuning
- Database backups
Extranet management (Web sites)
- URL availability
- Web site performance management
- Transaction tracking and monitoring
- Load and stress testing.
Other functions such as storage management,
applications management, desktop management, change
control management, asset management and help desk
support may also be included.
In addition, some MSPs manage public networks, not
only handling the implementation of those data and
voice networks, but also managing the fault and
performance of those networks on a day-to-day basis.
CHOOSING THE RIGHT MSP
As with all critical business decisions, support and
validation for your choice comes from thorough
research. In the absence of accepted industry tools or
templates, following are the critical points to
address as you consider outsourcing to an MSP.
Define what needs to be managed. This
should be the first responsibility of the CIO or IT
manager. It's relatively easy if you already have an
in-house staff managing your current environment;
however, if you don't manage your network, or your
organization is a start-up, you must inventory the
items to be managed such as network equipment
(routers, switches, hubs) and servers, databases,
applications and desktops.
Determine the outsourcing model. Do
you want to outsource all or some of your network
infrastructure management functions? You could either
offload your entire network and systems management to
a NOC-for-hire MSP, or you could outsource to a NOC-in-a-box
MSP where your operational costs are reduced without
surrendering control of managing your network. In
either case, the MSP can be considered a virtual
extension of your IT department. Decide which model
suits your organization best.
Service level agreements (SLAs).
Whichever model you choose, you must first get answers
to some important questions to clearly understand an
MSP's SLA guarantees. What level of high availability
and/or redundancy is offered by the MSP? What backup
plans exist in case of leased line network failures?
How does the MSP back up their SLA guarantees? Can the
MSP provide SLA violation notifications and reports?
What kinds of availability and turnaround time
agreements exist with software vendors for bug fixes?
Migration support. Explore the
migration support that an MSP offers and examine its
migration plan. In addition, specifically look for any
potential loss of functionality. For example, if you're
currently using a tool from Vendor A and are
considering an MSP whose platform is based on Vendor
B, will you lose functionality by migrating to the new
environment? Will the new tool be able to manage the
same resources? Will you get the reports you need?
Speed of deployment. How soon can the
MSP start managing your infrastructure? For example,
if you select the NOC-in-a-box model, how long will it
take to learn a new tool? Obviously, you'll want to
avoid sending your operators to a six-week training
program. Also, determine the depth and breadth of the
MSP's implementation team -- how long will it take to
fully deploy the management infrastructure?
Contracts and pricing. Since the
services offered vary widely and because the market is
so new, a long-term contract (five or more years) may
not be your best choice. Will the MSP work with a
short-term contract? Does the MSP charge upfront fees?
Are fees charged when you migrate to a new version of
the MSP's tool? What are the incremental fees for
adding additional nodes to be managed such as devices
and Web servers?
Customer references. IT managers
should request an MSP's customer references -- those
with an architecture similar to yours, and discuss the
MSP's service offering with the references before you
sign a contract.
Technical capabilities. With so many
service providers quickly appearing and disappearing,
you should make sure the MSP you chose will be around
for the long term. Key indicators of an MSP's
longevity include knowledge of the tools used or
offered; knowledge of and experience in managing
networks, systems and applications; proof of the
software's reliability to manage large networks and
systems; and the experience and expertise of the
staff, e.g., have they managed large networks or
corporate Extranets previously?
It's also important to ask MSPs about their
software vendor relationships. But more important, you
should research the financial backing, profitability,
organizational structure and management of any
Although the MSP market provides a compelling value
and many opportunities, choosing the right MSP with
whom you'll have a long-term relationship may be
challenging, since many are private start-ups and some
skew the definition of MSP to their advantage as they
fight for market share. In the long run, it's best to
ignore all acronyms and focus on service offerings
As in any outsourcing arrangement, considerable
upfront planning that includes a clear understanding
of the roles and responsibilities of both the customer
and the MSP, with clearly defined and communicated
escalation procedures, is essential for a successful
As global marketing manager with Agilent
Madathil champions the eChannel (xSP) market
strategy. He is currently chairperson for the ASP
Industry Consortium's ASPire 2001 Awards team and
leads the MSP Association's Awareness subcommittee.
To The October 2001 Table Of Contents ]