19 April 2024

Types of Cloud Managed Services (Image by Treinetic)

A cloud-managed service provider (CMSP) is becoming a vital partner for businesses seeking to optimize their cloud investments, enhance security, and improve operational efficiency. But what is a cloud managed service provider?

At its most basic, a CMSP is your expert IT team for the cloud. More complexly, a Cloud Managed Service Provider (CMSP) provides a wide range of cloud services, including infrastructure management, monitoring, security, and support for both cloud and hybrid IT environments.

These providers help your businesses navigate the complexities of cloud computing, ensuring systems are efficient, secure, and optimized for cost and performance.

With their expertise, CMSPs enable organizations to focus on core business goals by managing the technical side of cloud operations​​​​.

The significance of CMSPs has surged due to several factors. Firstly, the demand for cloud services is growing, with organizations increasingly relying on the cloud for operations and data management.

The expertise of CMSPs in managing cloud infrastructure is becoming indispensable for businesses aiming to leverage the cloud’s full potential​​.

Secondly, the rise in remote work and cyber threats has heightened the need for robust cloud management and security, areas where CMSPs excel​​.

Lastly, with the continuous evolution of cloud technologies, CMSPs provide essential support in navigating these changes, ensuring businesses can adopt new features and innovations that enhance their competitive edge​​.

A 2022 report by MarketsandMarkets reveals the cloud managed services market is projected to grow from $99 billion in 2022 to $164 billion by 2027.

So, this article aims to unpack CMSPs and explore their central role in managing cloud infrastructure, driven by the growing demand for such services in a rapidly evolving digital economy. Let’s dig in.

What is A Cloud Managed Service Provider

A Cloud Managed Service Provider (CMSP) is an entity that helps your business manage your cloud computing environments.

These providers navigate the complexities of cloud services, ensuring operational efficiency, security, and cost-effectiveness.

Yes, CMSPs address various client challenges, including skill shortages in IT departments, security concerns, regulatory and compliance requirements, and the intricacies of migration and digital transformation.

With the cloud computing market’s rapid growth, the expertise provided by CMSPs in managing these areas is invaluable​​. Their role in optimizing cloud performance underscores the importance of CMSPs.

CMSPs offer a broad spectrum of services, from infrastructure management to security and compliance, ensuring that cloud environments are efficient but also secure and compliant with relevant regulations.

For example, according to MarketsandMarkets’ 2022 report, the mobility services segment, which includes managing devices and data in the growing BYOD and mobile workforce trends, will account for the largest revenue share in the cloud managed services market in 2022.

Of course, this trend also highlights the importance of working with a Mobile Device Management (MDM) service provider.

Services Offered by Cloud Managed Service Providers

Companies are recognizing the need to adopt cloud technology to remain competitive. However, they do not have to do it alone.

Cloud managed service providers are the secret weapon that many businesses rely on to ensure successful digital transformation journeys.

So, what kind of services could CMSPs give to your business?  Here are some examples:

1. On-Premises, Cloud, and Hybrid IT Management

CMSPs provide holistic management solutions to cover the entire spectrum of your IT infrastructure.

So, you get seamless integration and operation across on-premises, cloud-based, and hybrid environments​​.

2. Remote Monitoring and Security

This includes continuous oversight of IT systems to identify and rectify issues preemptively.

At the same time, oversight and robust security measures protect against and mitigate cyber threats, protecting your company’s data integrity and compliance.

3. Data Backup and Disaster Recovery

CMSPs deliver secure data protection with strategies for rapid recovery during data loss or disaster, minimizing business downtime and data exposure.

4. Cloud Migration and Architecture Design

CMSPs offer expert guidance and support for migrating to the cloud.

CMSPs help design scalable, secure, and tailored cloud architectures to meet your business’s needs​​.

5. FinOps Services

These services optimize cloud spending and consumption. This service enables your business to get the most value from your cloud investments by implementing cost-effective practices and tools​​.

6. Infrastructure Optimization and Modernization

CMSPs optimize and modernize cloud infrastructure to enhance performance, scalability, and efficiency.

7. Software License Negotiation and Consulting Services

CMSPs also offer expertise in software licensing negotiations and provide consulting services to align IT strategies with business goals.

8. Co-Managed Services

CMSPs work with your internal IT teams to provide flexible support models, enabling your business to utilize specialized skills and fill expertise gaps.

Benefits of Partnering with Cloud Managed Service Providers

With the services we mentioned before, Cloud Managed Service Providers (CMSPs) offer various benefits for organizations aiming to optimize their cloud operations.

1. Expertise and Specialization

CMSPs bring specialized knowledge and experience to your company. The expertise provides on-demand access to experts who can navigate complex cloud environments.

This expertise is critical for tailoring cloud solutions to meet specific business goals and ensuring strategic implementation of technologies​​.

2. Cost Savings

By working with CMSPs, your company can save significantly and reduce upfront capital and operating costs.

These savings come from avoiding the expenses associated with hiring, training, and retaining in-house IT staff and from leveraging the pay-as-you-go model.

3. Enhanced Business Agility and Resilience

CMSPs help your businesses become more agile and resilient with industry standards and are updated to reflect current trends.

This robust support fosters reliability and prepares organizations to respond swiftly to market changes.

4. Continuous Upgrades and Updates

CMSPs ensure your IT infrastructure and systems are regularly updated with the latest security patches and upgrades. This benefit helps prevent downtime and enhance server and network security.

5. Comprehensive Disaster Recovery and Business Continuity

CMSPs maintain your daily business operations during unexpected disruptions.

Regular data backups to the cloud and disaster recovery plans ensure uninterrupted service, protecting valuable data and sustaining customer satisfaction.

6. Cybersecurity Support

Of course, CMSPs provide advanced cybersecurity measures to protect businesses.

Their in-depth knowledge of a company’s IT infrastructure and current threat landscapes minimizes the risk of data breaches and cyberattacks.

7. Scalability

CMSPs enable your business to scale resources efficiently to meet fluctuating demands. So you don’t need to worry about infrastructure limitations or slow rollouts.

This flexibility supports growth and adapts to changing business needs seamlessly.

8. Round-the-Clock Support

Access to 24/7 technical support ensures every issue is addressed promptly.

This support will minimize downtime and maintain operational continuity.

This comprehensive support covers many IT-related functions, ensuring your business can focus on core activities.

An Example of How Cloud Managed Service Providers Are Being Used Today

In September 2023, the BMW Group selected Amazon Web Services (AWS) as its preferred cloud provider to develop its next-generation automated driving platform.

This collaboration aims to innovate new features for BMW’s upcoming “Neue Klasse” vehicles, set to launch in 2025.

Utilizing AWS’s compute, AI, IoT, machine learning, and storage capabilities, BMW intends to accelerate the delivery of highly automated vehicles.

This partnership also involves Qualcomm Technologies, leveraging the Snapdragon Ride Vision Platform for advanced driver assistance systems (ADAS).

BMW’s development of its next-gen ADAS on AWS to meet customer demands swiftly.

The use of AWS’s scalable, secure infrastructure to support BMW’s automated driving and parking functions.

The cloud-based approach facilitates global collaboration and accelerates innovation in automated driving.

This partnership exemplifies the critical role of Cloud Managed Service Providers (CMSPs) in supporting complex, data-intensive, and innovation-driven projects.

CMSPs like AWS provide the infrastructure and services necessary for companies to leverage vast amounts of data, deploy machine learning models, and develop new technologies efficiently. 

So yes, CMSPs enable companies to navigate the complexities of digital transformation, manage the explosion of data, and foster innovation at scale. 

How do Cloud Managed Service Providers Work?

The typical workflow of CMSPs involves deploying, managing, and maintaining cloud services.

Those phases cover everything from network operations and security to application and IT lifecycle management.

Let’s break it down quickly. Here’s the lowdown:

  • You’ve got a goal – Maybe it’s moving to the cloud or just making the most of it.
  • Link up with a CMSP – They’re like your cloud wingman. They figure out your aims and match you with the proper cloud setup.
  • They do the grunt work – From moving your stuff to the cloud to setting it all up, they’ve got it covered. They ensure everything’s ticking along nicely.
  • Keeping things smooth – They’re on it 24/7, making sure everything’s running like a dream, keeping the baddies out, and ironing out any glitches.

It’s all about making your cloud journey as smooth as silk, tailored just for you, without breaking the bank or getting lost in tech speak. They’re your go-to for keeping things streamlined and goal-aligned.

What is A Cloud Managed Service Provider (Image by eWay Corp)

Considerations When Choosing a Cloud Managed Service Provider

The process involves more than just picking a provider. Yes, the process demands a thoughtful analysis of various critical factors.

Just because your business needs to ensure the provider aligns perfectly with your business needs and goals with a reliable budget.

First, it’s essential to consider the provider’s expertise and industry-specific experience.

This ensures they have the relevant skills to support your company’s efficiency and competitiveness.

Additionally, the provider’s security and compliance measures must be considered.

It’s crucial to verify their certifications and compliance with regulations relevant to your industry to safeguard your data and operations​​.

Another key aspect is understanding the provider’s data governance and security policies.

This includes their data management practices, encryption methods for data in transit and at rest, and their processes for handling data loss and breaches.

Knowing where your data will be stored, and the legal implications of that location is equally important​​.

When evaluating a CMSP, it’s also wise to scrutinize their service dependencies and partnerships and their approach to contracts, commercials, and SLAs.

The clarity and transparency of their service agreements and the ability to deliver as promised are vital for a fruitful partnership​​.

Lastly, assessing the potential for cost savings and the provider’s resource allocation and management capabilities will ensure you get the most value out of the partnership.

This includes understanding how they optimize resource utilization and minimize costs across different departments within your organization​​.

Challenges and Risks Associated with Cloud Managed Service Providers

Working with Cloud Managed Service Providers (CMSPs) presents unique challenges and risks that businesses should be aware of.

One of the primary concerns is the ability of a CMSP to scale with your business. Your CMSP should proactively recommend new IT strategies and technologies to support your organization’s growth.

If they fail to provide strategic guidance, it may indicate that your business has outgrown the CMSP​​.

Another critical issue is cybersecurity. Surprisingly, many CMSPs do not specialize in cybersecurity, exposing your business to potential threats​​.

Ensuring that your CMSP regularly updates you on threats and has adequate measures to minimize their severity is crucial.

Response times are also a significant consideration. Waiting hours for a response from your CMSP, especially during critical IT issues, is unacceptable. Your CMSP should keep you well-informed and current on any problems you face​​.

Vendor lock-in is another challenge. Vendor lock-in is when switching to a different CMSP becomes difficult or costly due to proprietary technologies, customized solutions, or contractual constraints.

This can limit your flexibility and choice, potentially leading to increased costs and dependency on a single provider.

Integration challenges are common when disparate systems and technologies must work together seamlessly.

CMSPs must effectively manage the integration of cloud services with your existing IT infrastructure to ensure smooth operation and avoid disruptions.

To mitigate these risks and address challenges:

  • Conduct thorough due diligence when selecting a CMSP, focusing on their experience, expertise, and ability to scale with your business.
  • Prioritize cybersecurity by choosing a CMSP with solid security measures and compliance standards.
  • Discuss and agree on response times for support and maintenance in your Service Level Agreement (SLA).
  • Consider the potential for vendor lock-in and evaluate the flexibility of the CMSP’s solutions and services.
  • Assess the CMSP’s experience and capabilities in integrating cloud services with existing IT systems.

What is the Difference Between MSP And CSP?

MSPs deliver a broad spectrum of IT services, including infrastructure management, network monitoring, cybersecurity, data backup, and end-user support.

They serve as an organization’s IT department extension, providing access to specialized expertise and allowing businesses to outsource routine IT tasks.

This partnership aids businesses in focusing on strategic initiatives while ensuring cost predictability and proactive IT maintenance​​.

On the other hand, CSPs specialize in providing on-demand cloud computing resources and services, such as storage, processing power, and databases, accessible over the internet.

They offer services based on the XaaS (Anything-as-a-Service) model, which includes Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS), and Platform-as-a-Service (PaaS).

We see X as Infrastructure-as-a-Service (IaaS) in the BMW-AWS example above.

The choice between an MSP and a CSP depends on your needs and goals. And there are companies out there using managed security or network service providers because they have to.

So, make sure you understand your company’s needs and goals first. Businesses with extensive on-premise IT infrastructure looking for comprehensive IT management and support may benefit more from partnering with an MSP.

In contrast, organizations prioritizing scalable, on-demand cloud resources might find CSPs more aligned with their requirements.

Some businesses may opt for a hybrid approach, leveraging the strengths of both MSPs and CSPs to create a tailored IT solution that efficiently supports their operations and strategic goals​​.


As a final thought, start considering Cloud Managed Service Providers (CMSPs) as your behind-the-scenes tech wizards.

They’re the crew making sure everything runs smoothly, from keeping your digital house to being ready immediately if things go sideways.

But, please note that the cloud environment and CMSP are complicated and need administration focus.

Therefore, you should optimize your cloud investments in CMSP  and ensure their operations are efficient and secure.

And Octobits represent a compelling solution. Why? Octobits is much like having a neat control center where you can see everything about your cloud stuff in one spot.

It plays nice with the big tech playgrounds like AWS and Microsoft 365.

So, Octobits keep you in the loop so you can dodge tech headaches and keep things ticking without a hitch.

And guess what? You get to test drive Octobits for free until the end of June 2024.

So, while you are still figuring out what a cloud-managed service provider is, why not let Octobits show you how it’s done?