by Eric Berkman

The Inevitability of the Management Service Provider

Nov 01, 20011 min

The emergence of MSPs is a predictable macroeconomic development, says Kraft Foods Senior Vice President and CIO Steve Finnerty, a 30-year IT veteran. Companies outsource whatever is most costly to them at the time.

In the 1970s, Finnerty relates, hardware was expensive. So companies engaged in hardware time-share agreements, a precursor to outsourcing.

By the 1990s, software had become a huge cost center. Hence the rise of ASPs.

Now, it’s people that are costly. Companies can’t afford to maintain huge IT staffs, which is where MSPs come in, replacing the people you’d need to watch every server, router and box around the clock, making sure your applications or network don’t go down.

“To me the [outsourcing] pendulum is following economics,” Finnerty says. “That’s the historical perspective I see. Moving from hardware to software to the people aspect of managing business processes.”