Co-managed IT: shifting to a new IT model

The past year has seen a prominent shift in how enterprises manage their IT. With the impact of the Covid-19 pandemic highlighting a lack of agility in some organisations — who struggled to quickly set up secure, large-scale work-from-home environments — and with IT departments having to downsize, the need for external technology expertise, added scalability and agility has never been greater.

This is driving an accelerating trend towards co-managed IT services, where managed service providers (MSPs) support the in-house IT teams of larger organisations with some, but not all, of their responsibilities. In a recent Canalys survey amongst the channel community, nearly 60% of respondents agreed that adoption of such co-managed services has increased during the global pandemic. A further 41% said they are seeing IT co-management ‘frequently’ or ‘almost’ always.

And, as we continue to move towards a new normal that blends remote working with office-based working, the IT setup in many organisations will become even more complex, further intensifying the need for external support.

A true partnership model

So what exactly does the co-managed IT delivery model look like?

First of all, it differs from a fully outsourced service in that it is a true partnership model, where the provider works hand in hand with the in-house IT department on common goals. Delivered under a long-term agreement rather than on a project basis, this partnership can take on myriad forms, depending on the enterprise’s needs.

Typically, MSPs are called in to provide additional expertise, resources, scalability and agility — an extra pair of hands — in a specific and clearly defined area, whether that’s providing IT helpdesk services, running the network or security operations centre, monitoring hardware, supporting applications such as Office 365, or assisting with digitalisation.

The agreement can cover anything from loaned staff and on-site technical support to remote monitoring and management, to strategic advice and training – in short, anything an MSP already has in its stack.

Working with an MSP in this way can help an enterprise to respond more quickly and flexibly to arising IT needs, without having to spend time on hiring and training extra in-house staff. It can be a cost-efficient way of bridging internal skills gaps, especially when the MSP has proven experience in a key area such as threat monitoring or cloud transformation.

Plus, the ongoing skills shortage in the IT sector means talent is still difficult to find and retain. Pre-pandemic, this, and a trend for downsizing IT teams, was contributing to the growth in co-managed services. The biggest drivers, however, for businesses to partner with an MSP were increasing IT complexity (33%) and cost considerations (29%), according to the Canalys poll.

In addition, a separate MSP survey 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.

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The pandemic has accelerated adoption

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

However, global demand for co-managed services has accelerated over the past six months, perhaps triggered by the sudden shift to remote working during the first lockdown. In the US, large enterprises with 150 to 1,000 network users are increasingly reaching out to MSPs for support; this trend is now extending into other regions.

Cyber security concerns, exacerbated by the global crisis, are prompting more and more organisations to look to external experts for support.

In addition, technology is moving faster. The pandemic will likely bring major and lasting change in how businesses operate. To facilitate flexible working on an ongoing basis and to take some previously face-to-face processes online, organisations will have to implement new solutions. Partnering with an MSP can help enterprises speed up this digital innovation, while keeping costs manageable thanks to an ‘as-a-service’ or consumption based commercial model.

One MSP delivering co-managed IT services to clients across the UK is Complete IT. Out of their 700 customers, one in five have signed up for co-managed IT services — their Complete IT 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.”

Written by Bob Petrocelli, CTO, Datto

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