Are Managed Service Providers Profitable?

Learn about the profitability of managed service providers (MSPs). Find out how working with an IT managed service provider can increase productivity and profitability.

Are Managed Service Providers Profitable?

The profitability of managed service providers (MSPs) is a hot topic in the business world. According to a survey, the average profit margin of MSPs is 31.6%. Working with an IT managed service provider can be a great way to increase productivity and profitability. Companies need MSPs because they reduce risks and handle all upgrade and maintenance tasks, allowing managers to focus on their business.

A potential MSP should assess current and future IT needs and advise on what type of products and services should be implemented over the next year. MSPs can manage customers' internal IT environment, digital business, Managed Detection and Response (MDR) tools, Endpoint Detection Response (EDR), Incident Response, Endpoint Management, Vulnerability Management and Patching, etc. Organizations rely on the expertise of managed cloud services to be agile and responsive. MSPs offer a variety of IT services and support functions for a fixed monthly fee that is generally much lower than what companies would have to spend on their own in terms of salaries, benefits, training, and workspace.

The adoption of managed services can help companies better organize, operate and protect their business. Small and medium-sized businesses (SMBs) are increasingly outsourcing their IT functions to MSPs. Managed service providers proactively monitor a company's network, minimize IT issues, and troubleshoot any issues that arise on the network. The growing demand for managed services is due to SMEs needing access to the latest technologies to innovate in their respective fields but lacking the right talent and IT budget.

As customers grow, they need more storage and network infrastructure, more application services such as VOIP, more end users, and broader infrastructure management. For example, some aspects of Managed Services have helped a global insurance company achieve savings of 60% of revenues. Managed services are also available to small businesses looking for outsourcing options for their IT needs. A lack of trained IT staff is another important reason organizations seek the services of a managed service provider.

Leave Reply

Required fields are marked *