What is a managed service provider? What an MSP actually does for a small business

A managed service provider is a company that looks after your technology for a recurring fee, so much of the upkeep happens before something breaks. If you run a small office in Denver, you have probably heard the term from a salesperson or an insurance form, usually without a clear explanation. Here is the plain version, including the parts that tend to get left out of the pitch.

What is a managed service provider, in plain terms?

A managed service provider is a company that delivers, runs or manages technology services for its customers under a contract. That is close to how a joint 2022 advisory from CISA, the NSA, the FBI and their counterparts in the UK, Australia, Canada and New Zealand describes it. The work can happen at your office or from the provider's own data center.

What does an MSP do for a small business?

Most small-business MSP plans combine five jobs. The names vary, but published provider guides describe a consistent core:

• Help desk. Someone to contact when a person can't log in, print or open a file.
• Monitoring. Small programs on each computer, called agents, report problems back to the provider, such as a full disk or a failing device.
• Patching. Patches are the fixes software makers release, many of them for security holes. The FTC tells small businesses to keep programs, apps, browsers and operating systems on an update schedule with automatic updates on. An MSP takes that chore over.
• Backup checks. Confirming backups ran, and ideally testing that they restore. The FTC advises keeping backups that aren't connected to your network, so an attack on your systems can't reach them.
• Account administration. Adding and removing people in Microsoft 365 or Google Workspace, setting up new hires and shutting off access when someone leaves.

Many plans add security tools, vendor coordination, and a regular review of what to budget for next.

What isn't included in an MSP's monthly fee?

An MSP's monthly fee rarely covers everything with a plug or a login. Our guide to what managed IT costs in Denver goes through this in detail, but these items are commonly billed separately:

• Software licenses. Managing Microsoft 365 is a service. The licenses themselves are a separate cost.
• Hardware. Laptops, firewalls and Wi-Fi equipment.
• Projects. An office move, a cloud migration or a network rebuild is almost always quoted on its own.
• After-hours emergencies and on-site visits, depending on the plan.
• Backup storage. Checking that a backup ran and paying for the space it uses can be two different line items.
• Compliance work, such as HIPAA for a medical office, and onboarding, the one-time work of documenting your setup and installing the provider's tools.

For scale, published Denver provider guides put fully managed IT at roughly $100 to $250 per user per month. For a 12-person office, that works out to about $1,200 to $3,000 a month before any of the extras above.

How does an MSP compare with hourly repair or an in-house hire?

The three options differ mainly in who is responsible between problems. This is the typical pattern, and contracts vary:

Comparing proposals right now? Send us the question you're stuck on.

Why does an MSP's access to your systems matter?

An MSP typically holds high-level access to your systems, so its security becomes part of yours. A 2022 joint government advisory warns that attackers can use a vulnerable provider as a way into its customers' networks. That isn't a reason to avoid MSPs. It is a reason to treat one like a company holding your office keys.

That advisory and the FTC's guidance for small businesses point to a few practical steps:

• Require multi-factor authentication (a second proof of identity beyond a password) on every provider account that reaches your systems.
• Limit a vendor's access to what the job needs, for as long as it needs it.
• Have the contract say which security duties belong to the provider and which stay with you.
• Check for yourself. The FTC's position is that security can't rest on a vendor's word alone.
• Disable the provider's accounts when the relationship ends. The advisory notes this step is often overlooked.

What should you ask an MSP before signing?

Ask these seven questions before you sign, and get the answers in writing:

1. What exactly is in the monthly fee, and what is the hourly rate for everything else?
2. What are the support hours, and what happens at 9 p.m. on a Saturday?
3. Who will I talk to when something breaks? A named person, or whoever is next in the queue?
4. How often do you test a real restore from backup, and will you show me the result?
5. Which security tools are included, by name?
6. Whose name are our accounts and domain in? They should be registered to your business.
7. What do we get when we leave? Look for admin passwords, documentation and your data in a usable format.

Our list of questions to ask before hiring IT support goes further for the first meeting. If you want something more formal, CISA publishes a vendor risk template for small and medium-sized businesses with a section on vetting MSPs.

Does your small business need an MSP?

A small business benefits most from an MSP when nobody clearly owns the IT work. Try this test: who installed the last round of security updates, when did anyone last restore a file from backup, and who removed the last departed employee's accounts? If the answers are "I'm not sure," that work is probably falling through the cracks, whether you fix it with an MSP, an internal hire or someone you already trust.

At Lab 5280, we believe outside technology help should work with your team, not just for your team, and our focus is automating how a business runs. Much of the routine work above is repeatable, which is why it is worth asking any provider what they have automated and what still depends on someone remembering.

Common questions

What does MSP stand for?

Managed service provider: a company that runs some or all of a business's technology under an ongoing contract.

Is an MSP the same as IT support?

Not quite. Help desk support is one part of what an MSP does. The rest is ongoing upkeep, such as monitoring, updates and checking backups, that happens whether or not anyone calls.

How much does an MSP cost in Denver?

Published Denver provider guides put fully managed IT at roughly $100 to $250 per user per month. Licenses, hardware and projects are often billed on top.

Does a small business need an MSP?

Not always. It depends on how much of your day stops when a computer or account fails, and whether someone is already responsible for updates, backups and removing old accounts.

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