What is an MSP?
MSP vs. Break/fix
MSP simply stands for “managed service provider” and really refers to the preferred pricing structure and business model of some IT companies. Traditionally there have been two basic types of computer service companies; “Break/Fix”, and “Managed Services”. Break/Fix companies respond when some part of your technology solutions breaks, and they fix it for you, charging only for the time it takes to fix it. An MSP company charges a monthly fee for their services and usually maintains all existing infrastructure and software for that pre-determined monthly fee.
For many years, iSTAM has avoided the MSP business model because we heard so many of our customers complain (having gained their business from an MSP company), that they paid a large monthly fee, and still had to pay for almost everything else they needed, including most support. Most MSP’s have a monthly maintenance fee that is the same every month, and then they allow for extra costs like upgrading software, hardware, or training which they refer to as “projects”. And it only makes sense that they can’t anticipate the growth or changes within a business, and that they can’t just do anything and everything a business needs for a monthly fee.
So one of the issues with working with an MSP is determining the value of their services compared to a break/fix company. In order to do this you take into consideration the cost of downtime, lost revenue, and the motivation behind the two business models to serve your business.
An MSP should be very highly proactive to make sure that your technology works efficiently, and doesn’t “go down”. If your computer breaks, or your network gets hacked by a virus, that could mean hours of on-site time that they probably didn’t account for in their monthly fee (and even if they did, it would be more profitable for them to not spend that time doing repairs or restorations). So generally speaking, they should be highly motivated to make sure your systems run consistently, efficiently, and securely.
A Break/Fix company should be highly motivated to fix your issues when they arise, but will not typically be as highly motivated to make sure that your technology never fails. If they did, they might work themselves right out of business. As a result, response times may be better with a break/fix company, but your overall costs may be greater due to down time and hard to measure costs like lost revenue, turn over (due to frustrated staff) and employee wages.
The Perfect Solution
The perfect solution to me would be an MSP that had very clear and easy to understand contracts that defined exactly what would be considered a “project”, and what would be included as regular service. Their rates would be affordable (no necessarily cheap), and save my business money compared to the cost of inefficient IT hardware and software. Their response times should be as good or better than a break/fix company. Finally, they should include unlimited support for all existing hardware and software (included in the initial agreement).
So we’ve decided to make that our goal. Beginning in June 2016, iSTAM will begin offering MSP services to our customers. Existing customers can choose whether to continue as break/fix, or switch to the MSP model. We will provide an online calculator to estimate costs for our services, and estimate all the other hard to measure costs, so you can compare the two. Our contracts will clearly define “projects”, and we will provide unlimited support for all covered hardware. Finally, our response time guarantee will remain in effect for all “urgent” support tickets!