When it makes sense to use managed service providers in a down economy

Insightful analysis by consultants Steve Taylor and Jim Metzler, plus links to the latest WAN news headlines

Today, we end our short series on how the challenging economy will impact IT organizations by discussing the use of managed service providers.

MSPs are nothing new. IT organizations have been using them for a long time and for a variety of reasons. For example, sometimes an MSP can provide a service, such as router management, more cost effectively than the IT organization. Sometimes an MSP has expertise in an area such as application delivery, which is either not available in the IT organization, or is in short supply.

We recently surveyed 300 IT professionals and more than 80% indicated that their enterprise currently uses an MSP. Almost 45% said they expected their organization would make additional use of MSPs in the future. The respondents were asked to indicate the services for which their company either currently uses an MSP or anticipates that they will use an MSP. The top services were IP telephony, application hosting, managed router services, unified communications and call centers.

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Today, we end our short series on how the challenging economy will impact IT organizations by discussing the use of managed service providers.

MSPs are nothing new. IT organizations have been using them for a long time and for a variety of reasons. For example, sometimes an MSP can provide a service, such as router management, more cost effectively than the IT organization. Sometimes an MSP has expertise in an area such as application delivery, which is either not available in the IT organization, or is in short supply.

We recently surveyed 300 IT professionals and more than 80% indicated that their enterprise currently uses an MSP. Almost 45% said they expected their organization would make additional use of MSPs in the future. The respondents were asked to indicate the services for which their company either currently uses an MSP or anticipates that they will use an MSP. The top services were IP telephony, application hosting, managed router services, unified communications and call centers.

Many of the respondents also indicated that their company might well cut the IT headcount and capital budget and yet still demand new functionality from the IT organization. These conflicting goals would seem to be further evidence that the use of MSPs will increase in 2009.

We believe that there are times when MSPs add value, and there are times when they do not. We also believe that when an IT organization is going through the process of determining if the use of an MPS make sense, the IT organization must carefully evaluate the ability of the MSP to properly manage the services that they are providing. In addition, IT organizations must also have the network management tools, people and processes to monitor the services provided by the MSP. Not having these tools, people and processes in place means that the IT organization has no recourse other than to blindly hope that the MSP is providing the contracted services. As we all know, hope is not a strategy.

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Steve Taylor is president of Distributed Networking Associates and publisher/editor-in-chief of Webtorials. Jim Metzler is vice president of Ashton, Metzler & Associates.