What is a managed service provider?\n\nA managed service provider (MSP) is an outsourcer contracted to remotely manage or deliver IT services such as network, application, infrastructure, or security management to a client company by assuming full responsibility for those services, determining proactively what technologies and services are needed to fulfill the client\u2019s needs.\n\nServices delivered by an MSP are delivered by employees located at the client\u2019s locations, or elsewhere. MSPs can also bundle in hardware, software, or cloud technology as part of their offerings.\n\nManaged service provider business model\n\nManaged service providers structure their business to offer technology services cheaper than what it would cost an enterprise to perform the work itself, at a higher level of quality, and with more flexibility and scalability. This is achieved through efficiencies of scale, as an MSP can often hire specialists that smaller enterprises may not be able to justify, and through automation, artificial intelligence, and machine learning \u2014 technologies that client companies may not have the expertise to implement themselves.\n\nMSP\u2019s business models are typically defined by the following commonalities:\n\nOverall, managed service providers aim to provide cost-effective, efficient services at a predictable cost to enable clients to focus their internal IT resources on more business-differentiating activities elsewhere in the tech stack.\n\nMSPs vs. outsourcing and consulting\n\nWhen an enterprise outsources an IT department or function, the outsourcing company either picks up those employees or replaces them with a roughly equivalent number of employees elsewhere. An MSP, however, focuses not on the jobs themselves, but the end results the customer seeks. For example, an enterprise might contract an MSP to handle support calls to a certain level of satisfaction and response time. As long as the managed service provider meets those metrics, it doesn\u2019t matter whether it uses dedicated staff, automation, or some other system to handle calls for that customer; the MSP decides.\n\nThere is a great deal of overlap between these definitions, however, and many companies traditionally thought of as offering business process outsourcing are now operating more as managed service providers.\n\nManaged services also differs from traditional IT consulting arrangements in that consulting is typically project-based, while managed services are ongoing subscriptions.\n\n[ Related:\u00a08 ways to get the most from your managed service provider\u00a0]\n\nTop managed service providers\n\nKey players in the managed services market include Accenture, Fujitsu, IBM, Cisco Systems, Ericsson, Lenovo, DXC, and Hewlett Packard Enterprise Development, according to Grand View Research.\n\nMSP Swift Systems adds Carousel Industries, Cognizant, HCL Technologies, Infosys, Softchoice, and Wipro to the list of larger MSPs, while Datamation also notes the prominence of Atos, Capgemini, CDW, Deloitte, LTI, NTT Data, PwC, Rackspace, and TCS among its rankings.\n\nAs a side note, each of the top 10 outsourcing providers of 2023 are included in the above aggregations of top MSPs, demonstrating not only the gray area between MSP and outsourcing arrangements mentioned above, but the fact that, in achieving economies of scale, technology service providers are well positioned to provide enterprises with a range of offerings to choose from.\n\n[ Related:\u00a06 top managed cloud services providers \u2014 and how to choose\u00a0]\n\nManaged service provider examples\n\nKey services offered by MSPs include:\n\nManaged service providers, however, come in all sizes, with the MSPAlliance, an international association of cloud and managed service providers, estimating around 150,000 MSPs across the globe.\n\nSome MSPs specialize in particular domains, such as network management or cloud management, whereas others offer one-stop-shopping. According to the MSPAlliance, MSPs typically offer network operation center services, remote monitoring and management tools, and service desk capabilities.\n\nStrategic managed service providers\n\nManaged service providers have evolved of late to offer services that support strategic and longer-term business planning, including digital transformation consulting, compliance audits, technology roadmaps, and needs assessments.\n\nAnother area of growth for MSPs has been in providing internet of things (IoT) services, with 50% of MSPs seeing IoT as a significant revenue opportunity, according to CompTIA.\n\nBenefits of managed service providers\n\nIn addition to providing improved security, efficiency, and reduced costs, managed services providers offer the following benefits:\n\n[ Related:\u00a0Building elasticity in outsourced managed services\u00a0]\n\nCurrent state of the MSP market\n\nAccording to Mordor Research, the managed services market will grow to $380 billion by 2028, up from $260 billion in 2023, buoyed by increased adoption of the model among SMBs, as they look to outsource non-core IT systems and functions. \u201cThe Evolving Landscape of the MSP Business Report,\u201d assembled by Vanson Bourne and commissioned by Barracuda Networks, reinforces this trend, citing increasing complexity of IT (49%) and internal IT resources deployed to other projects (48%) as key drivers for SMB adoption of MSPs today.\n\nThe top 10 services and solutions currently offered by MSPs include the following, according to Vanson Bourne\u2019s research:\n\nVanson Bourne\u2019s research notes a drop in cloud-based infrastructure among MSP offerings, from 45% in 2022 to 31% in 2023. It ascribes this drop to fewer organizations requiring ongoing support for early pandemic spikes in remote and hybrid working. Still, navigating remote and hybrid working environments at client sites remains a top challenge for MSPs, cited by 46%, followed by increased competition in the MSP market (44%) and keeping up with tech trends (40%).\n\nAs for growth strategies, the \u201c2023 Global MSP Benchmark Survey Report\u201d from Kaseya found that offering new services is a top priority of 61% of MSPs, with 54% of MSP reporting that they have added up to three new services in the past two years, and another 30% having added four or tive new services over that same time period.\n\nAdditional trends include an expected growth of 28% until 2028 of the IoT market for MSPs, according to Mordor, as well as a 60% increase in adoption of AIops among MSPs, according to research from OpsRamp. AIMultiple analyst Cem Dilmegani notes that, while no numbers are currently available regarding adoption of generative AI, MSPs are expected to make considerable use of this technology in the year ahead.\n\nManaged service provider jobs\n\nManaged services providers hire IT professionals with a wide variety of experience levels and skill sets, though individual companies may focus on particular industries or technologies. For example, an MSP specializing in managed network services will skew toward professionals with traditional computer engineering, software engineering, and systems engineering backgrounds, in addition to software developers, and networking and security experts.\n\nDue to the wide variety of services offered by MSPs, nearly any IT job can be found within the industry, including IT support specialists, service delivery managers, network operations technicians, systems administrators, security analysts, cloud architects, and more. MSPs also hire IT pros for roles tailored to specific vendor solutions, such as VMware and Oracle.\n\nAt an MSP, IT professionals can work with a wide variety of companies in various industries and gain more experience than they can with a single company. Working for an MSP also offers more geographic options, as many MSPs have long relied on remote staff.\n\nSalaries at MSPs are roughly comparable to those at enterprises, according to MSP executives, who add that slight premiums can be found in the MSP job market due to competition for skills and business models that can accommodate them.\n\nMSPs are also investing heavily in artificial intelligence and machine learning given the growth potential for their client bases.