Sidebar: The Making of an MSP

Computerworld - The MSP concept was born early this decade when large companies began to realize that it takes more than just adding servers to keep complex Web sites and applications up and running smoothly. Soon, names like Loudcloud, Totality, Nuclio, SilverBack and ManageIT dotted the MSP landscape.
An ASP backlash also contributed to the emergence of the next-generation MSPs, says Adam Braunstein, an analyst at Robert Frances Group, as weak spots in the ASP model became apparent.
"A generic piece of software can't work for every company in every industry with no modifications or extra functionality built in to serve the industry's needs," he says. "They needed customization."
In 2003, a survey of 200 corporate IT and business decision-makers by Boston-based Summit Strategies Inc. showed that 45% of midsize and large businesses were using managed hosting or managed services, and another 19% expected to adopt these offerings by 2005.
Yet some early MSPs failed. "Some of them just ran out of money before they become attached to a very large client. A lot of it is just the luck of the draw," Howard says.
Early on, MSPs struggled to tangibly demonstrate how the service would save customers money over in-house management. But today, with more complex Web sites and applications, plus the ever-present threat of system crashes - and the ramifications of crashes that do occur - business is picking up.
Today, MSPs are seeing single-digit gains in market share, especially in specialized pockets such as VPN, security and hosted self-service voice applications.

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