Managed Service Providers vs. Cloud Service Providers: What to Know

IT organizations today must evaluate managed service providers vs. cloud service providers and determine which is better suited for their businesses. In this post, we’ll explore the difference between managed service providers and cloud service providers to help you determine which is a better fit for your current and future needs.

Need insight on evaluating a managed service provider for your organization? Download this MSP Evaluation Checklist to ensure you select the best partner.

What is a Service Provider?

No matter the size or nature of your business, your ability to meet the needs of your customers is tied to the digital infrastructure that delivers your services. The manner in which you communicate and, in some cases, the entire interaction between you and your customers, largely transpires in the digital domain.

Without a full-blown IT organization and a monster budget, how exactly do you go about meeting these needs? For starters, consider working with a service provider.

Service providers came about as a means to supplement in-house IT staff and technology to provide a more economical means to scale and manage the infrastructure supporting the business. This evolution led to the emergence of managed service providers and, more recently, the advent of cloud service providers. Other common types of professional service providers include application service providers and network service providers.

What is a Cloud Service Provider?

A cloud service provider (CSP), also known as a cloud solution provider, is typically a company that provides on-demand services to cater to your cloud computing needs. The delivery infrastructure resides in the cloud, and the services are delivered and accessed via the Internet.

Typically, this takes on the format of an X-as-a-Service (XaaS) model where X might be software (SaaS), infrastructure (IaaS), or platform (PaaS). CSPs deliver these services via the public cloud infrastructure or a private or hybrid model to suit the particular needs of the customer. CSPs range in size from the giants of the industry (Amazon, Google, IBM, Microsoft, etc.) to smaller outfits that base their value prop on customizing services, usually based on tailoring the giants’ core offerings.

What is a Managed Service Provider?

A managed service provider (MSP) delivers services, such as network, application, infrastructure, and security, via ongoing and regular support. MSPs provide active administration on customers’ premises, in their own data center (hosting), or in a third-party data center. Pure-play MSPs focus on one vendor or technology, usually their own core offerings.

Many MSPs include services from other types of providers. The term MSP traditionally was applied to infrastructure or device-centric types of services but has expanded to include any service offering continuous management, maintenance, and support.

Managed Service Providers vs. Cloud Service Providers

When deciding between a managed service provider vs. a cloud service provider, here are two major considerations to factor into your decision:

1. On-Premises Technology. Unless you are a startup just getting off the ground, you probably have a fair amount of infrastructure that is in-house and hosted within your premises.

MSPs are rooted in monitoring and managing your on-premises technologies, and they continue to excel in the management and monitoring of in-house systems. They have the capability to work closely with you and your staff to cover your IT needs.

Conversely, CSPs provide only off-premises cloud-based solutions. Their focus is on delivering X-as-a-Service. If you opt to move to the cloud with a CSP, you may still need an MSP to manage any legacy tech and on-premises infrastructure you do not decommission as part of that transition, unless you opt to do so using an internal team.

2. End-User Support. With their direct access to on-premises infrastructure, MSPs are well positioned to provide hands-on support to the actual users of your systems and services – your IT team and your end customers.

With their expertise in NOCs and help desks, MSPs can help you plan and grow. They can help you in real time when an employee or a customer has an issue with a discrete device or system.

CSPs are focused on the solutions they deliver, and thus they take a more hands-off approach to customer relationships. Their support is restricted to the services they offer, and they are not in a position to directly address device-level issues on your end. Rather, CSPs are suited for companies that have a good understanding of the digital solutions they need to support their business and would prefer not to own those solutions or any responsibility for managing them.

Differences Between Managed Service Providers and Cloud Service Providers

As indicated in this post, there are several key differences between managed service providers and cloud service providers. At the most basic level, the main difference is that MSPs manage technology and infrastructure that you own while CSPs offer access to technology and infrastructure that they own. Whether you choose an MSP or CSP depends on your current capabilities, your plans for growth, and of course, your specific business needs. Every IT organization is unique in terms of its goals and approach.

Check out this post on how to choose a managed service provider if you decide that the MSP route is best for your business.

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