Managed services

Managed services means that a vendor's own staff do a job for a customer, every day, for a monthly fee. The customer does not just buy software. It pays for the work, and for the people who do it. The term is used most in security and IT, but the same model appears in many industries.

Here is how it works. The customer and the vendor agree which job the vendor will do, and how quickly it must respond. This agreement is called a service level agreement, or SLA. The vendor connects to the customer's systems. The vendor's staff then do the work every day, often around the clock, using the vendor's own tools. They call the customer when a decision is needed. The customer pays a fixed fee each month, for example for each laptop, each employee or each page.

Managed security has an older form and a newer form. A managed security service provider, or MSSP, mostly forwards alerts to the customer. An MDR provider investigates each alert and stops the attack itself. The page on MSSP vs MDR explains the difference. Some companies share the work: on a security operations platform, the company's own team runs the day shift and the provider runs the night shift.

Take, for example, a company that has no security staff at night. A managed detection and response (MDR) provider's analysts watch its alerts all night, and they cut off any laptop that starts running ransomware.

Consider an office with fifty staff and no IT department. A provider acts as its IT department, and uses an MSP platform to fix laptops and manage email accounts from a distance.

Say a drug company needs to test a new medicine on patients. A contract research organisation runs the clinical trial for it.

How is a managed service different from SaaS? With SaaS, a company rents software, and its own staff use it. With a managed service, the vendor's staff use the software and do the work for the customer.