A service provider is an entity that provides services to other entities. Usually this refers to a business that provides subscription or web service to other businesses or individuals. Examples of these services include Internet access, Mobile phone operator, and web application hosting.
Types of service providers
Application service provider (ASP)
Internet Service Provider (ISP)
Managed Service Provider (MSP)
Master Managed Service Provider (MMSP)
Telecommunications Service Provider (TSP)
Managed Internet Service Provider (MISP)
Application service provider
An application service provider (ASP) is a business that provides computer-based services to customers over a network. Software offered using an ASP model is also sometimes called On-demand software or software as a service (SaaS). The most limited sense of this business is that of providing access to a particular application program (such as customer relationship management) using a standard protocol such as HTTP.
The need for ASPs has evolved from the increasing costs of specialized software that have far exceeded the price range of small to medium sized businesses. As well, the growing complexities of software have led to huge costs in distributing the software to end-users. Through ASPs, the complexities and costs of such software can be cut down. In addition, the issues of upgrading have been eliminated from the end-firm by placing the onus on the ASP to maintain up-to-date services, 24 x 7 technical support, physical and electronic security and in-built support for business continuity and flexible working.
The importance of this marketplace is reflected by its size. As of early 2003, estimates of the United States market range from 1.5 to 4 billion dollars. Clients for ASP services include businesses, government organizations, non-profits, and membership organizations.
Provider types
There are several forms of ASP business. These are:
A specialist or functional ASP delivers a single application, such as credit card payment processing or timesheet services;
A vertical market ASP delivers a solution package for a specific customer type, such as a dental practice;
An enterprise ASP delivers broad spectrum solutions;
A local ASP delivers small business services within a limited area.
Some analysts identify a volume ASP as a fifth type. This is basically a specialist ASP that offers a low cost packaged solution via their own website. PayPal was an instance of this type, and their volume was one way to lower the unit cost of each transaction.
In addition to these types, some large multi-line companies (such as IBM), use ASP concepts as a particular business model that supports some specific customers.
Internet service provider
An Internet service provider (ISP, also called Internet access provider, or IAP) is a company that offers its customers access to the Internet. The ISP connects to its customers using a data transmission technology appropriate for delivering Internet Protocol datagrams, such as dial-up, DSL, cable modem, wireless or dedicated high-speed interconnects.
ISPs may provide Internet e-mail accounts to users which allow them to communicate with one another by sending and receiving electronic messages through their ISPs' servers. (As part of their e-mail service, ISPs usually offer the user an e-mail client software package, developed either internally or through an outside contract arrangement.) ISPs may provide other services such as remotely storing data files on behalf of their customers, as well as other services unique to each particular ISP.
End-User-to-ISP Connection
ISPs employ a range of technologies to enable consumers to connect to their network.
For users and small businesses, the most popular options include dial-up, DSL (typically Asymmetric Digital Subscriber Line, ADSL), broadband wireless, cable modem, fiber to the premises (FTTH), and Integrated Services Digital Network (ISDN) (typically basic rate interface).
For customers with more demanding requirements, such as medium-to-large businesses, or other ISPs, DSL (often SHDSL or ADSL), Ethernet, Metro Ethernet, Gigabit Ethernet, Frame Relay, ISDN (BRI or PRI), ATM, satellite Internet access and synchronous optical networking (SONET) are more likely to be used.
Typical home user connection
Dial-up
DSL
Broadband wireless access
Cable Internet
FTTH
ISDN
Wi-Fi
Typical business type connection
DSL
SHDSL
Ethernet technologies
Locality
When using a dial-up or ISDN connection method, the ISP cannot determine the caller's physical location to more detail than using the number transmitted using an appropriate form of Caller ID; it is entirely possible to e.g. connect to an ISP located in Mexico from the USA. Other means of connection such as cable or DSL require a fixed registered connection node, usually associated at the ISP with a physical address.
ISP Interconnection
Just as their customers pay them for Internet access, ISPs themselves pay upstream ISPs for Internet access. An upstream ISP usually has a larger network than the contracting ISP and/or is able to provide the contracting ISP with access to parts of the Internet the contracting ISP by itself has no access to.
In the simplest case, a single connection is established to an upstream ISP and is used to transmit data to or from areas of the Internet beyond the home network; this mode of interconnection is often cascaded multiple times until reaching a Tier 1 carrier. In reality, the situation is often more complex. ISPs with more than one point of presence (PoP) may have separate connections to an upstream ISP at multiple PoPs, or they may be customers of multiple upstream ISPs and may have connections to each one of them at one or more point of presence.
Peering
ISPs may engage in peering, where multiple ISPs interconnect at peering points or Internet exchange points (IXs), allowing routing of data between each network, without charging one another for the data transmitted—data that would otherwise have passed through a third upstream ISP, incurring charges from the upstream ISP.
ISPs requiring no upstream and having only customers (end customers and/or peer ISPs) are called Tier 1 ISPs.
Network hardware, software and specifications, as well as the expertise of network management personnel are important in ensuring that data follows the most efficient route, and upstream connections work reliably. A tradeoff between cost and efficiency is possible.
Virtual ISP
A Virtual ISP (VISP) is an operation which purchases services from another ISP (sometimes called a "wholesale ISP" in this context [1]) which allow the VISPs customers to access the Internet using services and infrastructure owned and operated by the wholesale ISP.
Free ISP
Free ISPs are Internet Service Providers (ISPs) which provide service free of charge. Many free ISPs display advertisements while the user is connected; like commercial television, in a sense they are selling the users' attention to the advertiser. Other free ISPs, often called freenets, are run on a nonprofit basis, usually with volunteer staff. There are also free shell providers and free web hosts.
Managed services
Managed services is the practice of transferring day-to-day related management responsibility as a strategic method for improved effective and efficient operations. The person or organization who owns or has direct oversight of the organization or system being managed is referred to as the offerer, client, or customer. The person or organization that accepts and provides the managed service is regarded as the service provider.
Typically, the offerer remains accountable for the functionality and performance of managed service and does not relinquish the overall management responsibility of the organization or system.
Common managed services
Common managed services include but are not limited to:
Transportation
Postage
Courier
Water
Power
Information Services
Backup
Storage
Network Management
User Management
Systems Management
Supply Chain Information Services
Communication Services
Internet (provided by an Internet service provider)
Telephone (typically provided by a telephone company)
Media
Managed services provider
A managed services provider (MSP), is typically an information technology (IT) services provider, who manages and assumes responsibility for providing a defined set of services to their clients either proactively or as they (not the client) determine that the services are needed. Most MSPs bill a flat or near-fixed monthly fee, which benefits their clients by providing them with predictable IT support costs.[citation needed]
Many MSPs now provide many of their services remotely over the Internet rather than having to perform on-site client visits, which is time consuming and often expensive. Common services provided by MSPs include remote network, desktop and security monitoring, patch management and remote data back-up, as well as technical assistance.
The business model behind managed services was commonplace among enterprise level companies, provided by large IT support companies such as EDS (Electronic Data Systems), IBM Global Services, and Centerbeam. The model was later adapted to fit small to medium sized companies by the value-added reseller (VAR) community as their existing model of reselling hardware and software continually provided lower profit margins. Some of the pioneers of what is today known as Managed Services include Alvaka Networks, (Irvine, CA) Dynasis (Atlanta), SLPowers (South Florida), Corporate Technologies, LLC (Minneapolis), Panurgy (NY/NJ), and Connecting Point (Las Vegas).
Managed Services Providers typically offer several price structures. Most commonly used is a per-month fee, but MSPs may also charge using a time and material model as well as price per desktop, server, or network device. For this fee they will monitor their client's IT infrastructure and resolve any issues that arise within it. This provides peace of mind and predictable costs for the client, as well as predictable revenues for the MSP. Managed services are often looked at as a way for small and medium sized businesses to outsource their IT needs at a lower cost than building an in-house IT support department.
One major challenge that MSPs faced was in changing from the reactive break-fix model to which they were accustomed into the new proactive managed services model, particularly because a hybrid solution was needed, since many times clients still required on-site visits, which the MSP had to either provide or contract.
As the buzz around Managed Services and MSPs grew within the IT support community, some early adopters attempted to make their service available to other, emerging, MSPs allowing them to slowly transition to an MSP model while still enjoying revenue from a time and materials billing model. Some of these providers began marketing themselves as Master Managed Service Provider.
According to the Institute for Partner Education & Development, most established Managed Services Provider's revenues come from delivering contracted recurring services onsite or remotely. Including any combination of hardware and software in a managed services solutions as well as an ASP (Application Services Provider) model.
Customer & Service Provider (SP) Managed Services Benefits
Key customer benefits:
Customer peace of mind – monitor network on 24x7x365 basis proactively
Single point of contact for all network issues
Single supplier instead of multiple vendors
Defined Service Levels (for service delivery)
Known costs for management & fixed price contracts
Avoid costs of building own management & reporting systems
Lower Total Cost Ownership (TCO) for client
Key Service Provider benefits:
Business contracts – extended longevity (in line with CPE life spans)
Increased ‘stickiness’ & ARPU (average revenue per user)
Ability to interact with & influence customers at a business/application decision making level
Protect vital carriage revenue by de-commoditising & value adding
Master managed service provider
The term Master Managed Service Provider (Master MSP or MMSP) describes an organization that hosts one or more managed service "point solutions" for resale through an indirect channel of technology solution providers. A Master MSP allows technology service providers, value-added resellers and other managed service providers access to hosted, managed service "point solutions" generally on a pay-as-you-go-model. The point solutions can be packaged together with the technology service providers’ core competencies in an effort to inexpensively deliver managed services to their customers. By leveraging a Master MSP, technology solutions providers can become MSPs.
These solutions generally include services that can be associated with outsourcing such as help desk and network operations center (NOC) support, in addition to offering on-demand, or software as a service, solutions that complement each other.
The term was established in 2005 by Do IT Smarter in an effort to distinguish their business model from a traditional managed service provider that delivers solutions directly to end-users. The term is now becoming more widely used in the industry.
Telecommunications Service Provider
A Telecommunications Service Provider or TSP is a type of Communications Service Provider that has traditionally provided telephone and similar services. This category includes ILECs, CLECs, and mobile wireless companies.
While some people use the terms Telecom Service Provider and Communications Service Provider interchangeably, the term TSP generally exclude ISPs, cable companies, satellite TV, and managed service providers.
TSPs provide access to telephone and related communications services. In the past, most TSP's were government owned and operated. in most countries, due to the nature of capital expenditure involved in it. But today there are many private players in most regions of the world, and even most of the government owned companies have been privatized.
The Deregulation or Privatization of Telecom Service providers first happened in the United States with the break up of the Bell System.
