Managed Services
Synonyms
- Outsourced IT Services
- Continuous Service Delivery
- Managed IT Solutions
- Remote Infrastructure Management
- Third-Party Service Support
What are Managed Services?
Managed Services refer to the ongoing management of a business’s IT infrastructure, software systems, or processes by a third-party provider under a defined service agreement. This model shifts companies from reactive, on-demand support to proactive, subscription-based service delivery.
In the B2B space, managed services often include infrastructure monitoring, network management, cybersecurity, cloud hosting, and ongoing software support—ensuring operational continuity and cost predictability.
Managed Services in the B2B Enterprise Context
- Predictable operational costs through subscription pricing
- Reduced burden on internal IT or operations teams
- Access to specialist expertise and enterprise-grade tools
- Scalable support for complex or distributed tech stacks
Industries like SaaS, manufacturing, financial services, and healthcare rely heavily on managed service providers (MSPs) to meet uptime, compliance, and performance expectations.
Recurring Services. Real-Time Pricing. No Hassle—Only with servicePath™ CPQ+
Types of Managed Services
1. IT Infrastructure Management
- Network monitoring, server maintenance, cloud architecture, and help desk support.
2. Managed Security Services
- Firewall monitoring, threat detection, vulnerability scanning, incident response, and compliance management (e.g., HIPAA, GDPR, SOC 2).
3. Managed Cloud Services
- Provisioning, scaling, cost optimization, and performance monitoring for AWS, Azure, or Google Cloud environments.
4. Managed SaaS
- Administration, customization, and support of SaaS platforms like Salesforce, Microsoft 365, and ServiceNow.
5. Managed Communications & Collaboration
- VoIP, email hosting, conferencing solutions, and remote access tools.
6. Managed Data Services
- Backup and disaster recovery (BDR), data warehousing, storage, and analytics infrastructure.
7. Vertical-Specific Managed Services
- Examples include managed compliance reporting for healthcare, or managed point-of-sale (POS) systems for retail chains.
Common Managed Services Pricing Models
1. Per-Device or Per-User Pricing
A flat fee based on the number of devices or users being managed (e.g., $X/month per desktop or employee).
2. Tiered or Bundled Packages
Service bundles grouped into predefined tiers (e.g., Silver, Gold, Platinum) with varying levels of SLA, support, or features.
3. Flat Rate Monthly Retainer
A consistent monthly fee covering a defined scope of services, often with custom SLAs.
4. Usage-Based or Pay-as-You-Go
Pricing scales based on actual consumption (e.g., storage, bandwidth, incidents resolved), common in cloud services.
5. Value-Based Pricing
Tied to outcomes or performance metrics, such as uptime, response time, or compliance adherence.
Common Challenges in Selling Managed Services
- Complex Scoping – Custom solutions require clear definitions, which slow down quoting.
- Price Compression – Market competition can drive down perceived value without differentiation.
- Renewal Friction – Long-term contracts can become outdated or poorly structured over time.
- Margin Visibility – Without proper tooling, it’s difficult to track profitability per service line.
- Approval Bottlenecks – Discounting or SLA customizations often delay quote-to-close cycles.
Best Practices for Quoting Managed Services
- Use CPQ Automation: Eliminate manual entry errors, accelerate time to quote, and ensure accuracy.
- Align Pricing with Value: Tailor pricing tiers to reflect customer needs and business outcomes.
- Include Clear SLAs: Define service boundaries, response times, and escalation paths up front.
- Enable Renewal Intelligence: Flag expiring terms and track profitability across renewals.
- Standardize Bundles: Create reusable service packages to simplify quoting and scaling.
Related Terms
- Managed Services Pricing
- SLAs (Service Level Agreements)
- Recurring Revenue
- CPQ for MSPs
- Renewal Management
- Subscription Billing
- Professional Services Automation (PSA)
- Margin Optimization
- Quote-to-Cash (Q2C)
Frequently Asked Questions (FAQs)
1. What is the difference between managed services and professional services?
Managed services are ongoing and subscription-based, while professional services are project-based or one-time engagements.
2. Can CPQ software quote managed services?
Yes. servicePath™ CPQ+ allows MSPs to configure, price, and quote managed services by duration, tier, SLA, or bundled offering—automatically applying approval and renewal logic.
3. What SLAs are typically included in managed services?
Response time, resolution time, uptime guarantees, and escalation paths. SLAs are critical for client expectations and billing structures.
4. How do MSPs track profitability for managed services?
By using CPQ platforms integrated with cost models and revenue analytics—ensuring margin visibility across contracts.
Quote Smarter, Deliver Better — Built for MSPs
Ready to Scale, Standardize, and Sell More with servicePath™?
📞 Contact us for a demo | 📚 Explore MSP case studies | 🎧 Listen to our CEO’s podcast with Frank Sohn of NOVUS CPQ