Managed services is the practice of outsourcing on a proactive basis certain processes and functions intended to improve operations and cut expenses. It is an alternative to the break/fix or on-demand outsourcing model where the service provider performs on-demand services and bills the customer only for the work done. Under this subscription model, the client or customer is the entity that owns or has direct oversight of the organization or system being managed whereas the Managed Services Provider (MSP) is the service provider delivering the managed services. The client and the MSP are bound by a contractual, service-level agreement that states the performance and quality metrics of their relationship.
In a managed service arrangement, the managed service provider retains responsibility for the functionality of the IT service and equipment, and the customer typically pays a monthly fee for receipt of the service. There are many different types of managed IT service offerings, but the idea behind all of them is to transfer the burden of maintaining IT from the customer to a service provider.