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Managed IT Services

The sector at a glance

Managed IT services is the business of running another company's technology for a recurring fee. A managed service provider (MSP) takes contractual responsibility for a small or mid-sized business's endpoints, servers, network, identity, cloud tenants, backups and help desk under a managed services agreement, billed per user or per device each month rather than by the hour. The category now blends into security: most MSPs sell a managed detection and response, email security, patching and awareness-training stack alongside support, and the ones that carry a security operations capability call themselves MSSPs. Buyers are rarely IT people — they are owners, CFOs, practice administrators and operations managers buying against downtime, a failed cyber-insurance questionnaire, a compliance deadline, a departing sole IT employee or an audit they cannot pass. The economics are what separate good providers from bad: recurring revenue, gross margin per seat, technician utilization and tickets per endpoint decide whether a provider can afford to deliver what it sold. The market is deeply fragmented — tens of thousands of small local shops — and is being actively rolled up by private equity, so the competitive set in any city changes with each acquisition.

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