Defining Managed Services

It seems to me that a good starting point of any managed services conversation is to agree just what managed services are.  Though there are a lot of definitions that have been floated in the technology field, I like the definition that we at CompTIA vetted in managed services research last Fall, based on its simplicity and directness. We have since taken this definition to several groups, including CompTIA’s new Managed Services Community, and it seems to be generally accepted.  I like it so much that I’d like to offer it as a standard for the industry.  Why not?  According to CompTIA’s research Current Trends in Managed Services September 2009, 85% of executives at IT firms do not believe that a widely accepted definition for managed services exists.

CompTIA Managed Services Definition:

Managed Services involves the ongoing management, monitoring, and maintenance of networks, software, hardware, and related IT services by an external organization.


Managed services are often marked by detailed service level agreements (SLAs), which typically include provisions for performance, security, efficiency, accountability, response times, and relevant upgrades.

It's good to know what we’re talking about since ninety percent of firms receiving at least some revenue from managed services forecast an increase in their company’s managed services revenues in 2010 (50% significantly, 40% somewhat), 10% expect no change, and none predict a decrease.  IT firms as well also share in the optimism of the managed services market, with 84% believing the managed services market as a whole will increase in revenue in 2010 (32% significantly, 52% somewhat), 13% expect it to remain the same, and only 3% see a decrease.*
While managed services is the hot topic of the day for IT service providers, I would argue that the concept itself is not really new. Based on the definition above, I could argue that we were providing managed services back in the 90’s when I was working for a VAR in Wisconsin who was offering what we then called an enhanced version of outsourcing. What makes managed services more viable and successful today is the evolution of the monitoring tools which have removed some of the guesswork and risk from the equation.  These tools allow the provider to remotely monitor multiple IT environments and spread the cost of monitoring amongst a larger base of clients.   These tools also allow better estimation of the ongoing maintenance costs of an IT environment.  Finally these tools offer a level of standardization, eliminating some of unknown and compatibility issues that result from reinventing the wheel in every IT environment.  If there is an evolution here, I believe it is best represented by new tools for managed services.
What has not changed is the need for service providers to listen to (and be responsive to) customer needs, and being well trained and knowledgeable about the tools and environments they serve is critical. In addition, managed services providers must be willing to work with their customers to improve their IT environments while minimizing risk. This remains (and will remain) the competitive advantage for all who proclaim they are providing managed services.
*source: CompTIA Current Trends in Managed Services September 2009

Paul Bittdorf is Manager of Member Relations for CompTIA and the organization leader of the Managed IT Services Executive Forum. He welcomes your comments and questions at PBittorf@comptia.org.