Managed IT Services
Everything You Need to Know About Managed IT Services
Published on June 8, 2021
What goes on in a modern office shows us how a business has become dependent on information technology (IT). No wonder why we’re seeing more small businesses investing in managed IT services: to help them run the tech side of their organization with incredible expertise.
Why do you need managed IT services?
We need computers to create content, automation to speed up workflow, email servers to communicate, and software applications to analyze data. These are just a few examples of how IT runs a business. Without IT, the growth momentum slows down and even stops.
So, how do companies keep everything up and running?
Many have their own in-house IT staff on standby to, say, fix an unresponsive printer or bring a frozen desktop back to life. That works fine for a while. But as the equipment gets more sophisticated and its use cases become more complex, you need experts highly trained in innovative technologies to keep up.
If you cannot rely on that kind of tech support, the best alternative is to hire an independent third-party provider to look after your IT infrastructure. This arrangement is what the industry calls managed IT services.
How managed IT services began
When the World Wide Web went live in August 1991, it triggered a digital revolution that transformed the workplace. As manufacturers introduced new machines, companies that bought them did not bother with maintenance in the real sense of the word. They merely stood by and reacted when the equipment stopped functioning.
That attitude proved to be bad for business because work stopped while technicians were fixing the machines. By treating the symptoms and not the underlying causes, the problem would recur, causing more stoppage and even data loss.
With no effort to predict attacks and check vulnerabilities, the break-fix approach hit companies where it hurts most – their pockets. Over time, many organizations realized that waiting for things to break down before doing anything creates more problems than they solve.
That is when the idea of proactive monitoring and maintenance of a company’s entire IT environment began.
The concept was brilliant, but it was difficult to put into practice because companies had limited in-house talent and lacked the IT resources needed.
That sparked the boom for independent managed IT services providers with the necessary expertise and 24/7 commitment. As a result, up to 64% of today’s business organizations rely on full or partial managed IT services.
Outsourcing as a solution
Managed IT services is an outsourcing solution that’s designed to complement an in-house IT department or, in the absence of one, look after the organization’s entire IT system. The managed service provider (MSP) takes care of the equipment maintenance and sets up measures to keep the network secure and protect data.
Outsourcing makes sense especially for small businesses because a lack of qualified IT support forces staff to tinker with their devices which, of course, leads to more problems.
Finding in-house IT specialists is also hard to come by. If you are lucky, you will spend an average of $80k to $130k a year in salaries and benefits for each one that you hire as a regular employee.
In contrast, most outsourced managed IT services charge a flat-rate monthly fee. The provider will be available for support 24/7/365 — rain, shine, night, or day — unlike an in-house specialist who could be on holiday or sick leave when an event occurs.
Location Can Be an Advantage
When choosing an MSP, its location can give your business a strategic advantage.
A local provider near you will be familiar with your market and can be on-site quickly should you need any help. Small local teams are also known to provide more personalized service.
On the other hand, a national provider will be the better choice if you are focused on expanding your business to other states or countries where the provider also operates.
Types of industries that need managed IT services
Regardless of size, businesses need managed IT services to remain competitive and keep operations moving without a hitch.
Having a small budget is not a problem because most providers offer customized packages. As such, any business, whether it be a mom-and-pop startup or a big company, can choose a plan that fits its specific needs.
Managed IT services providers work across many industries. But they are most in-demand in the banking and financial sector, health services, insurance, manufacturing, supply chain, and real estate.
We recommend that prospective clients choose partners with experience working in their industry and, therefore, understand their unique IT needs.
Benefits and Advantages of Managed IT Services
Outsourcing IT service management solutions has become necessary in today’s business as technology dictates how we work, interact with customers and co-workers, and produce or store data.
A managed IT services provider ensures that every asset is working independently and in collaboration with others.
The technical and strategic support it gives result in many benefits and advantages, some of which are the following:
- Quick response – A competent managed IT provider provides fast 24/7/365 support to respond to any emergency. For one, Cyberhawks guarantees a quick 7-minute connection to apply a solution at once. The ability to address a problem immediately prevents downtime, which is estimated to cost a company $9,000 per minute.
- Reduced overhead – Outsourcing frees you from paying monthly salaries that average $5000 a month for each in-house IT staff. They do not include benefits and the cost of training to keep their knowledge and skills up to date.
- Certified IT experts are working for you – You get a team of highly trained and experienced specialists to keep your business secure and running smoothly. They will introduce you and your staff to the latest technologies while managing your IT environment. They will also help you plan as you scale for the future.
- Outsourcing costs are predictable – Most managed IT providers charge a flat-rate monthly fee, so you can program your expenses accurately. Knowing exactly how much you need to pay each month avoids unpleasant surprises when the bill arrives.
- Risk is minimized – With experts actively monitoring your network for potential problems, you reduce the risk of an event catching you off-guard. Predictive analytics is one technology providers use to detect and address issues before they give you headaches.
You comply with data privacy regulations. Managed IT services providers are aware of the importance of regulatory compliance. They make sure that your IT initiatives satisfy strict rules on data protection.
They include the Health Insurance Portability and Accountability Act (HIPAA) and the General Data Protection Regulation (GDPR), which sets the standards for transferring personal data outside the European Union.
You get the best rates from hardware and software vendors. Managed IT services providers handling many clients have the leverage to negotiate for lower prices while buying hardware or software in your behalf.
Common misconceptions on managed IT services
Organizations pay good money when they decide to outsource IT services. Naturally, they look forward to getting their money’s worth. However, many expectations do not match the reality on the ground and give a false sense of security.
These wrong expectations or misconceptions include:
1. A managed IT service provider will solve all your problems.
Established MSPs, such as Cyberhawks, can be relied upon for full support. However, some either lack the experience or have insufficient resources to perform their monitoring and maintenance functions adequately.
Choosing the right provider is critical. Not all providers have the skills and ability that translate to excellent IT performance. It would be best to exercise due diligence to find a suitable partner that you can depend on technically and strategically.
2. You can trust every provider with your confidential data.
Human error can also affect MSPs when it comes to handling sensitive information. You must start steps to reduce the chances of inadvertent mishandling of confidential data. We recommend asking your managed IT service provider to sign a non-disclosure agreement. It should have specific provisions on liability even in case of an accidental breach.
3. The collaboration will be smooth.
If you choose a provider from overseas, you may meet difficulty in communicating with it. Factors that can make collaboration challenging include differences in culture, language, and time zone.
4. A small budget leaves you with limited options.
An experienced MSP will design a plan that makes the most of your budget, whatever its size. They will give you different managed service options, so you can pick one that works for your specific requirements and financial capability.
For example, CyberHAWKS has launched its Jumpstart program, especially for startups. It offers a bundle of IT services that include productivity apps, email security, malware protection, and help desk support for as little as $99/month. Jumpstart can give your business a boost in productivity for the price of a daily cup of coffee.
5. You will have no control over a provider.
In an IT service management outsourcing arrangement, the provider will be an extension of your existing IT staff (should you have in-house support). In short, as a business owner, you will be the one making decisions. They will provide you with advice and recommendations, but you will have the last word on whether to adopt them or not.
Types of managed IT services
- Desktop support. Computer desktops are the workhorses of everyday office activities. Managed IT services keep them functioning through regular assessment and optimization.
- Remote monitoring. The provider watches your network’s operational activities using remote devices or probes. On-site visits will only be conducted if an issue cannot be fixed remotely.
- IT planning and design. A provider gives strategic guidance on overall IT goals. It formulates and manages an IT strategy and prepares a budget to ensure the efficient implementation of plans.
- 24/7 IT support. Includes updating software, patching devices, and guiding business owners or their in-house team on how to support your system and keep it working.
- Network security. A provider helps protect your network by detecting and preventing intrusion attempts, preventing malware infection, filtering content, and inspecting traffic using a firewall.
- Data recovery. This service backs up and protects your data. It allows you to restore them quickly in case of a breach.
- Systems management. The service includes proactive monitoring of your computer network and applications. The provider will use data analytics to find potential flashpoints and take immediate measures to stop them from disrupting your operation.
- Data storage. If you need storage for enormous amounts of data such as media and web content, this service is a cost-effective and scalable solution.
- Virtual CIO. A Chief Information Officer leads most established MSPs. At CyberHAWKS, our virtual CIOs bring C-level leadership to your team. They will act as your trusted advisor on everything IT.
- Help desk service. A provider will be on-call 24/7 to quickly respond to any event that requires troubleshooting or strategic advice.
- Productivity apps. Managed service providers offer Office 365 which brings together a suite of cloud services to help run your business. They include productivity apps such as Word, Excel, and PowerPoint.
How to avail of managed IT service solutions
Outsourced IT services can either be partially managed or fully managed.
1. Partial or on-demand basis
When you have your own IT team but need outside help for tasks that may be too complex for your staff to handle, partial outsourcing is your best choice.
It is cost-effective because you only pay for the service you need. You also receive help from the on-demand expertise of third-party specialists who will fix specific issues that may crop up from time to time.
Depending on the job’s difficulty and urgent nature, providers will bill you from $150 to $300 per hour plus the cost of materials that they will use.
Another example of partial IT support is buying a block of time, say, 20 hours per month, which you can negotiate to get at a discount. You can tailor-fit your budget according to the number of hours you have bought and can use as your needs require. The provider will charge you according to the hourly rate for any excess from the agreed block.
Partial support allows you the choice to select from the provider’s recommended solutions. That gives you full control to plan your monthly budget. For example, you can prioritize online data backup, anti-virus protection, or email security against phishing. Once your account allows, you can gradually expand to other services, such as monitoring your mobile devices.
2. Fully managed IT services
Managed IT services have five different service levels.
1. Basic system monitoring service – This is the best option if you have an in-house team yet wish to outsource some of the regular IT functions to allow your staff to concentrate on more strategic tasks. For $75-$125 a month, you can count on a security team to keep track of your server and alert you if they spot anything suspicious. Please take note that they will only be supplying the warning. You will be using your company’s technology and in-house team to fix the problem.
2. Mid-level services – The provider goes beyond basic monitoring and will take immediate steps to address issues before they worsen. The cost involved is a flat-rate monthly fee. The amount would depend on the number of devices you use and the number of employees who use them.
3. Full scope of IT services – The provider will supply fully managed services, including network infrastructure and cloud-based systems. The cost can run to at least $125 per user monthly.
4. Consulting services. This type of service is ideal for companies that are planning long-term IT projects. The provider will give strategic guidance while the company is drawing up plans or scaling up.
5. Cloud-managed services. As more companies level up and migrate to the cloud, some providers specialize in cloud management over and above the traditional managed IT services.
Factors affecting managed IT services cost
Outsourcing managed IT services have many forms, and providers charge them accordingly. The factors that decide how much they cost include the following:
1. The scope of IT services. Managed IT service providers compute on-demand or break-fix basis hourly. They also charge comprehensive services at a flat-rate monthly fee.
2. The number of your technological devices. How many servers and technology devices you have and how old they are will affect the cost. The more digital assets to maintain, the longer it would take to do so. Older models would also require more maintenance and closer monitoring. A typical IT system would include desktops, smartphones, servers, anti-virus, Wi-Fi, and cloud applications. Connecting all of them will be considered by the provider while computing the cost.
3. Co-managed IT services. You have your own IT staff but hire an outside provider for specialized tasks. The practice of integrating teams may not be as economical as many believe. The outsourced team would typically price individual tasks higher as they have no control over their workload. They would also need to pull experts from their limited pool to do the job.
4. Having your own IT staff. As we have described earlier, keeping in-house IT specialists entails paying them monthly salaries, employee benefits, and the cost of regular training to stay in step with emerging trends.
5. Emergency on-site service. Providers charge one-time fees for on-site visits to address issues that they cannot resolve remotely. The same charge goes for attending strategic company planning sessions that discuss IT services and strategy.
6. Size of the chosen managed IT services provider. Outsourced service providers with many clients can offer a lower price because they can handle large workloads in a cost-effective manner. Their size also gives them leverage to negotiate for reduced prices from software and hardware manufacturers on your behalf.
7. Switching from one provider to another. You incur costs as you hire a new IT solutions provider or transition from in-house to outsourced IT services. The scope of the services decides the cost involved.
8. IT consulting. Consultants usually charge per hour of on-site support.
Managed IT Services Pricing Models
Outsourced IT services providers bill customers according to different pricing models. They include:
- Flat-rate fee. Providers charge mid-level managed IT services at a flat rate either monthly, quarterly or annually. The services may include system backup, disaster recovery, 24/7 support, IT planning and design, remote monitoring, and on-site support.
- Per-hour. IT consultants charge from $85 to $125 per hour. Individual technicians: $60-$100 per hour. 1-2 person IT firm: $75-$125 per hour.
- Per-user. As of March 2020, the standard US rate for IT service management ranges from $100 to $250 per person per month. For an average small business with ten employees, that would total $2500 per month. Compare that to at least $5000 per month that you pay an in-house specialist, and you would understand why outsourcing has become an efficient and popular choice for many small and medium-sized businesses.
- Per-device. There are varying rates for different devices. Providers would charge computers $5-$100 each. Firewalls between $25-$100. A server between $120-$500. Workstations between $30-$120. Switches between $10-$50.
- Break-fix basis. The service is charged per hour. The total cost would depend on the complexity of the work needed.
The Future of Managed IT Services
The future looks brighter for MSPs.
The International Data Corporation (IDC) projects stated in its IDC FutureScape: Worldwide Digital Transformation 2021 Predictions that despite the ongoing COVID-19 pandemic, direct investments for digital transformation is growing at a compound annual growth rate of 15.5% from 2020 to 2023.
on top of that, more companies are expected to adopt a “digital-first” approach, with 60% of enterprises heavily investing in digital tools to optimize employee and customer experiences.
MSPs will also be busy upgrading or adding to their list of offerings as new IT trends appear. They include Internet of Things (IoT), Artificial Intelligence, Blockchain, edge computing, and Big Data, among others.
CyberHAWKS is your trusted managed IT services partner
Finding the right managed IT services partner is crucial to access outsourcing’s many benefits and keep critical systems working. If your business is in the San Francisco Bay Area, CyberHAWKS is in the best position to help.
The company works in Silicon Valley, where it has been specializing in managed IT services for small and medium-sized businesses for more than 30 years.
Thomas Dhumad, a US Navy veteran and IT expert, founded CyberHAWKS. He designed a suite of next-generation IT solutions so you can focus on growing your business and taking care of customers.
Whether you are a startup, experiencing rapid growth, or an industry leader, Thomas and his team can help.
Contact CyberHAWKS for a realistic technology plan, augmentation for your internal IT staff, and a managed IT services solution that answers your business requirements.
Please email us at [email protected], or call 800-314-5835.
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