What is the difference between IT outsourcing and managed services?

Scope and model of responsibility

IT outsourcing can involve a wide variety of tasks, from one-time projects to long-term processes. Vendor responsibilities are usually defined in the context of a specific assignment or project. Managed services focus on the ongoing management and maintenance of specific systems or infrastructure. A managed services provider takes full responsibility for their smooth operation, availability, performance and security, working proactively to prevent problems, not just react to failures.

Proactivity vs reactivity

A key feature of managed services is proactivity. The provider constantly monitors the managed environment, optimizes its performance, implements updates and security patches, plans development and reports on the status of systems. Its goal is to ensure business continuity and minimize the risk of problems. In traditional outsourcing (such as project-based outsourcing), the provider is often more reactive, carrying out tasks according to the client’s order.

Settlement model

The billing model also often varies. In managed services, the predominant model is the subscription (subscription) model, where the customer pays a fixed monthly fee for a certain range of managed services and a guaranteed SLA. This gives a high degree of cost predictability. In IT outsourcing, the billing model depends on the nature of the order – it can be a fixed price for a project, time & material for development work or other, more flexible forms.

Customer relationship

The relationship in the managed services model is usually a long-term partnership. The provider becomes a trusted custodian of part of the client’s IT environment. In IT outsourcing, the relationship can be more transactional and project-based, though of course it can also develop into a long-term partnership.

Examples of services

Typical managed services include: management of network infrastructure, servers, storage, security (e.g., managed firewall, SOC as a service), cloud environment, backup & disaster recovery, workstation management or user support (managed helpdesk). IT outsourcing can include these areas, but also custom software development, testing, system migrations or consulting.

Summary

Managed services is a specific, proactive form of IT outsourcing, focused on the long-term management and maintenance of specific customer systems or infrastructure, usually on a subscription model and SLA basis. IT outsourcing is a broader term, encompassing various forms of outsourcing IT tasks and projects, with different responsibility and billing models.