The trend to co-managed IT service delivery

Resulting from lockdowns and social distancing mandates, organisations needed to quickly set up secure, large-scale work-from-home environments – and with IT departments having to downsize, the need for external technology expertise to provide additional scalability and agility had never been greater.

These changes have become the driving force towards co-managed IT services, an IT business model where managed service providers (MSPs) support the in-house IT teams of larger organisations. In most cases MSPs provide some, but not all, of IT responsibilities. This growing trend was recently substantiated by a Canalys channel community survey, where nearly 60 percent of respondents agreed that adoption of such co-managed services has increased during the global pandemic. Forty-one percent said they are seeing IT co-management ‘frequently’ or ‘almost’ always.

As the new normal begins to take hold, one that blends remote workers with office-based employees, the IT setup in many organisations will become even more complex, further increasing the need for external IT support.

The co-managed IT model

The co-managed IT delivery model contains a couple of fundamental differences to a fully outsourced service.

First, it’s a true partnership model, where the MSP works jointly with the in-house IT department on common goals. Second, it’s delivered under a long-term agreement rather than on a project basis, and can consist of a variety of forms, depending on the enterprise’s needs.

In most cases, MSPs are secured by the enterprise to provide additional expertise, resources, scalability, and agility for a specific and clearly defined task. For example, MSPs may provide IT helpdesk services, run the network or security operations centre, monitor hardware, support applications such as Office 365, or assist with digitalisation.

The agreement the enterprise enters with the MSP can be in the form of loaned staff, on-site technical support, remote monitoring, strategic advice or training. Essentially, it can be anything that an MSP already provides within its offerings.

Organisations get the ‘extra set of hands’ needed to help the enterprise respond more quickly to evolving IT needs. This enables organisations to efficiently handle IT needs, without having to spend time and money on hiring and training additional in-house staff. It provides a cost-efficient way of bridging internal skills gaps, especially in key areas such as threat monitoring or cloud transformation – where the MSP has proven experience.

In addition, we are continuing to face an ongoing skills shortage in the IT sector, making talent difficult to find and retain. Although the pandemic accelerated the need for co-managed IT services, the downsizing of internal IT teams began before Covid-19. According to the Canalys survey, the biggest drivers for businesses to partner with an MSP were

increasing IT complexity (33 percent) and cost considerations (29 percent). A separate MSP survey, conducted by Datto, found that organisations cited ‘security issues’ and ‘the need to manage multiple clouds or technology stacks’ amongst their reasons for a co-managed approach.

Adoption of co-managed IT is accelerating

While the term ‘co-managed IT’ was coined fairly recently, the idea of running co-hosted environments is not a new concept. In the UK, corporations, local governments, and healthcare organisations have been outsourcing elements of their IT since the 2009 recession.

Perhaps triggered by the sudden shift to remote working, the global demand for co-managed services is rapidly accelerating. In the US, enterprises with 150 to 1,000 network users are increasingly engaging MSPs for support, and this trend is now extending into other regions.

Cyber security concerns, exacerbated by the global crisis, are prompting an increasing number of organisations to partner with external experts for support. It is likely that the pandemic will bring lasting change in how businesses operate. To facilitate and support flexible working on an ongoing basis, and to shift face-to-face processes and interactions to online formats, organisations will have to implement new solutions. By partnering with an MSP that offers ‘as-a-service’ or a consumption-based commercial model, enterprises will be able to speed digital innovation, while keeping costs manageable.

One MSP delivering co-managed IT services to clients across the UK is Complete I.T. Out of their 700 customers, one in five have signed up for co-managed IT services - their Complete I.T. Support Service. These tend to be larger businesses and therefore, larger contracts. The important thing, according to MD Colin Blumenthal, is “for organisations to understand that the MSP is not trying to be a competitor, not threatening to replace the in-house IT team. If, instead, the in-house team can see the MSP as an ally whose role is to support and help, as a valuable external resource of experts who will work alongside the team – that is when the partnership becomes a successful one. The way we see it, we’re here to make both our clients and their IT look good.”