What is an MSP (managed service provider)?
An MSP (managed service provider) is a channel partner that delivers, manages, and supports IT services and vendor products for its customers on an ongoing, recurring basis — typically under a subscription or contract. MSPs bundle vendor technology into a managed service rather than selling it as a one-time product.
What it means
An MSP takes responsibility for running some part of a customer's technology — security, cloud, networking, help desk, backup — as a continuous service, often for a monthly fee. Rather than reselling a product for the customer to operate, the MSP operates it on the customer's behalf. MSPs are a fast-growing channel type because businesses increasingly prefer to outsource IT management and pay predictable recurring costs. For vendors, MSPs embed products deeply into customer operations, creating sticky, recurring revenue.
Why it matters
MSPs represent one of the most valuable partner types because their business model is recurring and relationship-heavy — once a vendor's product is embedded in an MSP's service stack, it tends to stay and expand. MSPs also reach the vast small-and-mid-market that vendors cannot cover directly, acting as the customer's outsourced IT department. Vendors court MSPs with usage-based or subscription-friendly licensing, deep technical enablement, and multi-tenant management tools, because an MSP's buying decision drives recurring product consumption across all its clients.
How it works / example
A small business hires an MSP to manage its IT. The MSP standardizes on a particular security vendor, deploys that product across all its clients, monitors and manages it 24/7, and bills clients a monthly per-seat fee. The vendor benefits from recurring, expanding consumption without touching the end customer directly. Vendors manage MSP relationships through PRM platforms like xAmplify, providing MSP-specific onboarding, certification, deal registration, and co-marketing to grow the recurring channel.
Related terms
MSPs are one channel type alongside VARs, ISVs, and SIs. Some MSPs focus on security as MSSPs. They depend on partner enablement, deal registration, partner tiering, and MDF, all managed within PRM. Their recurring model contrasts with the transactional VAR model.
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Frequently asked questions
What is the difference between an MSP and a VAR?
A VAR mainly sells products with value-added services, often as one-time transactions. An MSP delivers ongoing managed services under recurring contracts, operating technology on the customer's behalf. The MSP model is subscription-based and relationship-heavy, whereas the classic VAR model is transactional.
Why are MSPs valuable partners for vendors?
MSPs embed vendor products into recurring managed services across many clients, creating sticky, expanding consumption. They also reach the small-and-mid-market that vendors cannot serve directly, effectively acting as those customers' outsourced IT department.