What are the Different Types of Managed Service Providers?
MSPs play an integral role in purchasing, implementing, and consulting cybersecurity solutions for organizations. MSPs are also responsible for actively managing an organization’s security. These organizations might be small businesses, large enterprises, or startups that lack the in-house expertise or resources to manage their IT infrastructure and security needs.
With that being said, each MSP serves a unique purpose and provides a range of service offerings, including cloud migration, general consulting, data recovery, and IT support.
We’re going to explore several types of managed service providers, pricing models, and their key responsibilities when it comes to securing their clients’ critical infrastructure and data.
- Managed Service Provider (MSP): The traditional MSP is responsible for overseeing and managing an organization’s IT and systems. This includes setup and maintenance of security solutions, data backup and storage, network infrastructure, and third-party vendor management.
The MSP business model typically consists of monthly retainers and fixed-fee service contracts, which can be quite lucrative and highly scalable. These pricing models enable MSPs to secure long-term contracts while growing their client base and maintaining stable, recurring revenue.
- Managed Security Service Provider (MSSP): An MSSP differs from the traditional MSP in offering more advanced cybersecurity services, such as threat hunting, threat detection, vulnerability assessments, incident response, and compliance. MSSPs typically operate from a security operations center (SOC) and have specific skills for understanding how threat actors exploit vulnerabilities, enabling them to proactively identify and mitigate risks.
They may use various frameworks such as the OWASP Top 10 and MITRE ATT&CK to stay current on the latest tactics, techniques, and procedures (TTP).
- Pure-play MSPs: A pure-play MSP focuses exclusively on providing services in a specific area of IT or a particular technology vertical, such as cloud services or endpoint security to secure an entirely remote workforce. They offer a subscription-based model that provides a consistent recurring revenue stream. Organizations leverage pure-play MSPs when they need specialized expertise in a specific domain, such as pen testing or cloud storage management.
- Managed IT Services: IT service providers focus more on installing and fixing hardware, troubleshooting, dealing with network outages, employee onboarding of new technologies, and help desk support. Yes, this also includes the “joyful” task of resetting passwords. IT centers can be located anywhere, from small in-house teams to large outsourced call centers across the globe.
Billing is kept fairly simple. Managed IT service providers typically bill on an hourly basis, but some might offer service packages or retainer-based contracts for ongoing support.
Managed Service Provider Pricing Models
Managed service providers have different pricing models and structures. Some offer only tier-based packages, while others may provide multiple pricing options.
The table below highlights the various pricing models and use cases.
| Tier-based pricing | Per-device pricing | Per-user pricing | Value-based | Pay-as-you-go |
| Best-suited for: Nonprofits that work with volunteers who require access to systems and networks. Healthcare providers must grant access to staff and third-party vendors to access medical records. | Each tier or bundle represents a different service package and is generally offered in a monthly subscription-based model with annual discounts available for longer-term commitments. | Clients pay based on the number of users within the organization, which may also include contractors or other third parties that the organization works with. | This pricing model focuses on the outcomes and benefits that the client receives from the MSP’s services. A good example would be security improvements, where the KPIs are measurable in terms of cost savings from fewer security incidents or compliance fines. | Clients pay based on the usage of actual products or services. A good example would be the use of AWS instances, where businesses are billed for the amount of storage or data transfer they use each month. |
| Best suited for: Organizations that need flexibility to upgrade services as their needs evolve. | Best-suited for: SMBs with a moderate number of devices to secure or organizations that operate remote or hybrid workforces. | Best-suited for: Nonprofits that work with volunteers who require access to systems and networks. Healthcare providers that must grant access to staff and third-party vendors to access medical records. | Best-suited for: Enterprises with complex IT needs. | Best-suited for: Startups that need cloud storage for product development and testing. E-commerce businesses that need to handle heavy workloads during peak shopping seasons |
There is no “One-size-fits-all” approach as to which pricing model or structure you offer clients. Whether you’re offering tiered pricing or a la carte for cloud services, you should always test different models and go with the option that makes the most sense for your business and profit margins.
Transparency is key.
Make sure that your clients clearly understand the value and scope of the services they are paying for. Have clear communication about project deliverables, deadlines, and SLAs to avoid potential misunderstandings or lawsuits.
And you should always invest in cyber insurance to protect your business from potential security incidents or disputes.
Pricing aside, there is one common shared goal of every managed service provider: preventing cyber attacks for their clients.
MSPs face the daunting challenge of keeping pace with the increasing frequency and sophistication of cyber attacks. Data taken from a recent study found that 76% of MSPs spotted a cyberattack on their infrastructure within the last 12 months.
These advanced attacks force managed service providers of all types to rethink their existing security stacks or take a more proactive approach to cybersecurity.
That approach? Consolidated cybersecurity.
Unify Your Cybersecurity Stack with Guardz
Guardz removes the security stack silos and simplifies the onboarding experience for MSPs and their clients. Regardless of which managed service provider category you fit into or what pricing model you offer, Guardz has covered your cybersecurity plan.
Take a proactive approach and consolidate your cybersecurity with Guardz.
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Jordan is a Cybersecurity Content Creator and community builder. He has written for many cybersecurity companies and knows more stats about a data breach than IBM.
