Smart outsourcing Featured

8:00pm EDT August 26, 2007

If your company has recently grown — or has added new hardware or software — and your information technology department is working its fingers to the bone trying to keep up with the demand for help from end users, it may be time to consider an MSP, or managed IT service provider.

“With the shortage of qualified IT professionals in the marketplace at the moment and the increased technology demands from compliance issues, IT departments are finding themselves stretched thin,” says Gary Matsuda, co-founder and executive vice president of Agile360, a technology consulting and engineering firm based in Irvine, California. “Companies that find themselves in this position ought to consider outsourcing IT functions by using an MSP.”

Smart Business spoke with Matsuda about MSP and how it can help companies take control of their IT departments without losing control of their information.

What can an MSP do for an IT department?

MSPs offer a variety of core infrastructure services that generally fall into one of two categories: reactive services or proactive services.

The large majority of MSPs provide help in the reactive category. This could include hardware and software monitoring and troubleshooting, application support and tuning, and general help desk duties, such as password resets, printing issues, etc.

In the ‘proactive’ category, MSPs can provide consulting on larger issues, such as patch management — installing security measures and basic upkeep of the operating system and application software. An MSP can also provide help in strategic IT planning through quarterly business reviews with the business or application owners. In these review sessions, the previous quarter’s issues are summarized and topics revolving around performance and efficiency are discussed.

In addition, some MSPs provide co-location services, including fully redundant data center infrastructures with managed physical or virtual servers on a monthly rental basis. These co-location servers can be located in different geographical regions and, with data replication technologies, can provide a key component of a company’s business continuity solution in case of a disaster or system malfunction.

When should an IT executive or business owner consider an MSP as an alternative to hiring more IT staff?

An MSP solution works very well for many small- to medium-sized businesses that are finding it hard to keep their IT staff lean and efficient. When a business grows and adds employees, it usually requires more IT staff to support these end users. By hiring an MSP to handle the core IT services, the business does not have to keep adding IT staff and deal with all the training and retention problems that go along with it.

Contracting an MSP could be a sensitive issue within the IT department and needs to be positioned in the right way. Your IT staffers need to realize that they are not being displaced, but that the MSP will help offset the added workload and allow them to focus on more strategic IT initiatives.

Could hiring an MSP save money?

Yes, and the cost savings can be significant when you consider that the average salary for qualified IT professionals in Southern California can range from $60,000 to $100,000-plus a year. Many MSPs offer ‘block support’ contracts, which are prepaid hours of support. These also come in different levels — from advanced senior level IT support for complex issues to more basic remote administration duties, such as the ‘help desk’. The prices per hour or per block will vary accordingly. That said, if a company’s IT environment is chaotic, it may require some prerequisite costs to stabilize the environment in preparation for a hand off to the MSP. But assuming that the IT situation is under control, the savings can be significant.

Are there security risks associated with hiring an MSP for co-location services?

Depending on the level of management and administration delegated to the MSP, security risks are not too different than if a company were to move its services to a co-location facility on its own. That said, you do need to trust that the provider has a good hiring process with background and other checks and qualified personnel.

There is a lot of concern today regarding disaster recovery, particularly because of more stringent compliancy issues. How can MSPs help companies with disaster recovery?

Any good disaster recovery or business continuity solution will have a second data center in a different geographical location, but having a second site is usually cost-prohibitive for many small- to medium-size businesses. It is very expensive for a business to have its own computing resources in a different location on a standby basis, which requires a huge capital investment in rack space, network, servers, operating systems, power, cooling, etc. MSPs can eliminate the capital outlay required to support a secondary data center by providing managed servers on a rental basis, moving the expenses to the operating budget. As an added benefit, with the proper data replication and management tools in place, the second site can also be used as a development/test environment.

Using an MSP’s co-location services is an excellent alternative to fulfilling a disaster recovery plan. Disaster recovery is a hot topic now because of the compliance-related tasks a business needs to fulfill in order to adhere to its documented business continuity plans.

GARY MATSUDA is the co-founder and executive vice president of Agile360,, a technology consulting and engineering firm based in Irvine, California. Reach Matsuda at (949) 253-4106 or