What Is Managed Services?

Managed services is proactive performance management of technology (IT, telephony, applications, etc.) assets on behalf of a customer on a subscription basis.

“Managed services is not a product; it’s how it’s delivered,” said Greg Donovan, CEO and president of managed services provider (MSP) Alpheon Corp. and an MSP Alliance board member. “It’s a contractual relationship with service level agreements.”

In contrast to a VAR, which resells a vendor product with some services wrapped around it, an MSP turns the vendor product or service into a service of its own, said Charles Weaver, co-founder and president of the MSP Alliance. “A lot of resellers don’t understand that simple yet important differentiation.”

Donovan agreed. “Unfortunately, there are a lot of people out there who say they are doing managed services and they really aren’t. It’s not performance-based delivery,” he said.

For this reason, the MSP Alliance sponsors a Managed Services Accreditation Program that inspects service-delivery processes as well as financial status, business practices and client references to substantiate an MSP’s service offering.

To complicate matters, the definition of managed services is evolving. “Utility computing, software as a service and virtual desktop — that’s starting to change the rules of the game of managed services,” said Mark Scott, president of The Utility Company.

He explained that rather than simply remotely managing premises-based gear and software, MSPs are going to be delivering computing and applications as a service. Already, many MSPs are starting to do this with security, housing the application at their NOCs. This model applies to other applications, and Scott said the technology exists today for MSPs to deliver a virtual desktop service with line-of-business applications, Internet access, shared files and printing capabilities required by most cubicle-based technology users.

“All of those can be served up in a virtual environment. The benefit is you get rid of managing the data on a physical device at the desk,” he said. “There is a huge paradigm shift in the next few years.”

In October, The Utility Company plans to release The Utility Box, which will enable a service provider to deliver a virtual machine environment.

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