There are many ways to classify a managed service provider. There are three basic classifications: Managed service providers; software-as-a -service (SaaS) platforms; and Platform as a Service (PaaS). Managed service providers perform a variety of tasks, including the deployment and management of IT infrastructure. Most Managed Service Provider solutions are focused on providing end-to-end help desk support for small and medium-sized businesses (SMBs) on an on-demand basis. Some of these providers are also capable of managing telecommunication networks, handling data center outages, implementing online payment systems, and customizing websites and applications. Managed Service Provider products and services include web site design and development, web site maintenance, software application development, email marketing, real time web analytics, application development, and mobile app development.

The term “Managed Service Provider” can refer to one or more of these functions. For ease of discussion, the Managed Service Provider classifications are SaaS platforms. An SaaS platform is a computer software product or service, such as Microsoft Dynamics GP or Business Objects, that provides capabilities for businesses to manage their on-premise or virtual infrastructure. Software as a Service (SaaS) also allows users to easily scale a business’s needs by adding or removing hardware, databases, or applications. An example of a SaaS platform is the Windows Server.

Many organizations think of Managed Service Providers as being less flexible than platform-based solutions. This is sometimes true, but flexibility is not always the thing that will make a managed service provider unique from its platform competitors. Consider the following scenario: Your company has recently implemented Microsoft Dynamics GP as their main data platform. Now, your IT staff is now tasked with supporting mobile devices, which run on different operating systems. If your hardware or networking isn’t ideal for the migration, then something goes wrong.

The most common problem encountered by managed service providers is that they are tied to their own in-house IT staff. Now, the IT staff may be able to work around a few specific issues, but if a software update causes another issue, the whole IT network can come to a screeching halt. In addition, the IT staff is probably not the greatest people to deal with software updates. If a program update goes awry, it can be catastrophic for a small business with limited IT resources. If a third party application were to crash on the managed server, the problem can be compounded by the third party hosting the application. With the additional workload comes higher IT costs.

As a solution to these problems, many managed service providers are migrating to the cloud-based model of offering managed services. A cloud managed service provider offers many of the same features of a traditional managed service provider, including technical support, 24-hour security monitoring, and data duplication for key data such as customer data. However, the cloud also provides the added benefit of lower IT costs. Cloud computing allows a managed service provider to reduce its in-house IT staff and spend that money on other aspects of the business.

The biggest challenge Managed Service Providers will face is the migration of their hardware infrastructure. Most Managed Service Providers will already have their own IT staff, but hardware is expensive. Therefore, many of them are looking at the migration of their IT infrastructure to the public cloud as a way to reduce their IT costs. On one hand, the increased competition between cloud computing vendors makes it easier for them to reduce their costs, but it is also forcing them to change their pricing models to remain competitive. Some vendors are providing pricing models that are more affordable than others. By offering a multiple service model coupled with a simplified billing method, some managed service providers are being forced to adopt these changes.

One advantage that most Managed Service Providers has over the VPS model is the flexibility that they offer. A VPS requires a system that can be rebooted on a regular basis, requiring a large investment in IT equipment. The Managed Service Provider can provide a software solution that works well in a lab environment and allows for experimentation without the need for a large amount of money upfront. VPS requires hardware and software to be purchased and then requires maintenance and upgrades on a recurring basis. A managed service provider can eliminate the cost of purchasing these pieces of hardware and software. It may require a monthly fee, but the managed service providers usually provide lifetime warranties on their hardware and provide free upgrades on their software.

While there are pros and cons to both managed and VPS hosting, the real answer is going to come down to which type of Managed Services Provider best suits your needs. If you are operating a small business with limited resources, then the VPS is a great option for you. If you’re looking to launch a mission-critical application or service, the in-house solution may be more suitable.