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Australian MSP: The Evolution of Managed Service Providers

Since the earliest days of commercial computing, businesses have faced a unique set of technical challenges. Apart from being expensive to acquire and maintain, IT infrastructure requires expertise which is specialised, difficult, and expensive to find, recruit, hire, and retain.


Since the days of time-sharing of mainframe computing in the 1960s, organisations have progressively found ways to increase the accessibility to, and reduce the cost of using computers especially for businesses unable to justify the high cost of owning their own computers. The Computation Center at the Massachusetts Institute of Technology (M.I.T.) in 1961, first introduced the Compatible Time-Sharing System. In addition to this, the Multics operating system, a Unix predecessor, was modelled after utility services such as electricity and telephony.

In today’s computing world, managed service providers (MSP) are used to deliver a broad range of computing services to businesses of varying sizes in various industries. Current trends in 2019 predict a decrease in hardware budgets across organisations and an increase in budget allocations towards managed services. Statisia.com estimates the 2018 MSP market at over $189 billion, and projects growth of over $229 billion by 2020.


MSPs: Then and Now

digital illustration on technology via hands

In the early days of modern business computing, IT infrastructure maintenance and repair was provided by external support providers when required. With the evolution in the industry came a focus shift from reactive maintenance to more proactive maintenance.  Rather than just responding to breakdowns,  service and support providers began to proactively avoid breakdowns while improving the performance, reliability, and security of their clients’ IT estates. (The first international computer conference, held in London in 1971 included sessions on improving the security of early time-sharing systems.)

With time, business technology decision-makers made the shift towards negotiating “subscription-style” contracts with their external providers, which allowed for consistent access to support services. Some support providers even grew sophisticated enough to manage clients’ IT operations, either in part or in full, while also integrating other comprehensive solutions such as hardware resales which subsequently generated additional revenue. Those providers constituted the earliest version of modern MSPs.

In the 1990s, business decision-makers increasingly implemented so-called “lean” and “just-in-time” initiatives aimed at reducing manufacturing and distribution costs, while some others used these initiatives to pare their IT staffing and costs. Shortly after, the dot-com crash which began in 1995 accelerated unemployment rates within the IT industry. One effect of this was that IT adoption was growing, and IT solutions and management tools were increasingly growing more powerful, affordable, and easier to use. This mixture of factors fuelled the growth and evolution of modern MSPs and the services they provide.

Today, MSPs have evolved to offer a wide range of IT solutions and services. Generally, MSPs provide the following:

  • Anti-virus/anti-spam/anti-phishing/anti-malware services
  • Data backup
  • IT estate/network monitoring
  • New software configuration and provisioning
  • New hardware configuration and implementation
  • Network infrastructure configuration, implementation, and enhancement
  • Cloud computing (applications, services, resources, management)
  • Patch/repair/update management
  • On-demand augmentation of incumbent staff/expertise

Recent advances in business cloud computing have significantly contributed to the growth of the MSP market. A recent study by Grand View Research estimated the cloud-managed service market to be worth over $23 billion in 2016, with a forecast rising to $80 billion by 2020. 

With a focus on modern IT support services, many MSPs still resell hardware while offering on-demand repair services. CompTIA is a leading technology industry membership association which in 2018, featured a “State of the Channel” report featuring results following a survey of MSPs. When asked about their sources of revenue, more than one-third (38%) cited on-demand repair services, second only to consulting (55%) and ahead of managed services (35%).


MSPs: Proven Partners for IT

Today, modern MSPs have evolved to be able to augment the IT resources of almost any type or size of business. Whether your business needs more IT staff, technical support or even IT business processes or technologies, there are MSPs with the right skills and solutions to help. With a little research, you will find MSPs in tune with your niche who have the solutions, expertise, and ecosystem to help you achieve your business goals.

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