What is an IT Service Provider? Definition, Types & More

Timan Wainaina
December 30, 2022
min read
January 22, 2024
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An IT service provider is a proactive IT firm that anticipates the needs of its clients and delivers a wide array of technology services.
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Organizations use Information technology (IT) services to create, manage and deliver information, as well as support other business functions. These services may include consulting, hosting, software development, cloud services, systems integration, SaaS, storage and more.

They can also be more hands-on tasks, like hardware deployment and on-demand IT support, hosted IT services and more. 

Organizations can have these services internally through an in-house management team or outsource them from an IT service provider.

Some businesses realize the value of IT service providers through personal accounts or customer case studies. Others realize it when their servers crash and they undergo expensive recovery. 

For some businesses, the facts and figures truly help them understand how managed IT can help their organization.

Let's explore what an IT service provider is, types of IT service provider services, why organizations benefit from managed IT and more.

What is an IT service provider?

An IT service provider is an IT business/vendor that anticipates the needs of organizations and delivers various IT services and solutions.

An IT service provider (or managed service provider) is a business that maintains and monitors an organization's IT systems, infrastructure and end-user systems regularly. This company has the expertise, resources and license to do so. 

Although a service provider (SP) can be a sub-unit of the organization (internal team), it is often a third-party or outsourced vendor.

SPs may focus on one vendor or technology (Ppre-play SPs), usually their own core offerings or deliver their native services in conjunction with other MSPs. For example, a security MSP may provide cloud security and admin on top of a third-party cloud SaaS.

A service provider's delivery model generally differs from conventional IT product (developers or manufacturers) support. Typically, a service provider doesn't require a user/organization to purchase an IT product. Rather, it builds, operates and manages IT products bundled and delivered as a service. In turn, a customer accesses the solution from a service provider through various sourcing models, such as an on-demand, monthly or annual subscription fee.

IT service providers vs. managed service providers

A service provider company may also be called a managed IT service provider (or MSP). The primary role of an IT service provider is to streamline a company's day-to-day technical operations.

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A managed service provider (MSP) is an outsourcer contracted by a company/organization to remotely manage or deliver IT services, like network, infrastructure, application, security and more. An MSP assumes full responsibility for those services, determining what IT services the client needs.

To become an IT service provider or managed IT service provider, you must be able to:

  • Delivers IT services. 
  • Provide constant monitoring of an organization's IT-related functions.
  • Provide on-demand IT support.
  • Provide IT consulting.

MSPs can also bundle service provisions with hardware, Software or cloud technology in their offerings.

Managed IT service providers vs. in-house IT service providers

When sifting through process improvement ideas, A company can opt for an in-house IT service provider or a managed IT service provider.

Managed IT services are those offered by third-party IT service providers to solve a business's IT needs. This provides constant support and targeted expert services.

In-house IT is where the business hires, pays and can fire IT professionals for their IT needs. This allows IT experts and engineers to be entirely dedicated to the business and provide hands-on support and assistance.

Types of service providers 

IT experts sometimes differentiate service providers by categorizing services into three — types I, II, or III.

The IT industry recognizes these three service types, although they're specifically defined by ITIL and the U.S. Telecommunications Act (1996). They are:

  • Type I: internal service provider.
  • Type II: shared service provider.
  • Type III: external service provider.

Type III Service providers IT cater to external customers are called external service providers (ESPs). They provide services ranging from a full IT organization/service outsourcing via MSPs to limited product/app feature delivery through ASPs (application service providers).

Why companies need IT service providers

IT service providers can be important to enterprises for the following reasons. 

Cost saving

Using service providers helps companies save considerable amounts of money. There are more cost savings when a business purchases bundled services. According to a CompTIA survey, half of the companies who engaged an MSP saved 1-24 percent in annual IT costs and 13 percent saved more than 50 percent.

Disaster recovery

Servers crash and recovery can be expensive. Every week, over 140,000 hard drives in the U.S. encounter data loss — natural or artificial — yet businesses cannot afford downtime. A simple, out-of-pocket data or drive recovery (that may be successful or not) can cost thousands of dollars. In this case, having an IT service provider in place may become valuable for disaster recovery services.

Large IT service provision expertise & resources

IT Service Providers must keep their certifications and compliance updated with vendors like IBM, Microsoft, Dell, Cisco and more.

They also have larger teams of experts in major IT divisions than a company's internal staff.

On-demand service & support

IT service providers' services are available on-demand (when you need them).

Companies without bundled IT services from SPs often find it difficult to find and interview IT repair shops for their IT service needs. 

Cyber threats & cloud security

In the first half of 2021, there were 304.7 million ransomware attacks. This was a 151% increase from the previous year's cyber attacks. Every 39 seconds, ransomware and cyberattacks target corporations. Cybercriminals prey on the rapid transition to work from home and remote work schedules. 

With companies now managing their sensitive data in the cloud, keeping data secure is now more important than ever. Corporations cannot rely on internal teams to protect their data and information, and IT and Network Security services are today more sought-after tech services.

Disaster & strategic planning  

IT Service Providers help companies plan out a Technology Roadmap, including disaster planning.

Building an IT strategy with IT services tailored to your business playbook supports your goals and efficiency. 

Types of IT service providers with examples

The services IT service providers offer are wide and diverse.

Traditionally, the IT term service provider applied to infrastructure or device-centric services but has today expanded to include IT's continuous, regular management, maintenance and support.

The types of IT services or IT service providers include:

Consultation, strategy & roadmaps

IT consulting services are business advisory services that help clients assess different MSP technology strategies to align their technologies with their business goals or process strategies. 

Consulting services support clients' IT initiatives by giving them strategic, operational, architectural and implementation planning linked to their networks.

IT consulting service providers assess client IT and network requirements and formulate IT and system-implementation plans (see our standard work template.)

Architecture planning advisory services assess strategic plans and knowledge of emerging technologies for a company to create logical design of network environment and supporting infrastructure. 

Operational assessment consulting advisory assesses the operating capacity and efficiency of a client's network environment.

Examples of IT consulting service providers are IBM, EY, Accenture, Deloitte, McKinsey & Company, KPMG, Boston Consulting Group, Elixirr Softek, CGI Inc. and more.

Internet service provider 

An internet service provider (ISP) is a company or vendor that provides internet access to consumers and businesses. ISPs facilitate their customers' ability to surf the web, conduct business, shop online, etc., at a fee.

ISPs can also provide other services, such as email services, app or web hosting, domain registration, browser packages, storage, network or a combination of these and more. 

Examples of ISPs are Comcast and AT&T.

Cloud service provider

A cloud service provider (CSP) is a company that offers cloud computing components typically:

  • Software as a service (SaaS).
  • Infrastructure as a service (IaaS).
  • ...or Platform as a service (PaaS).

Cloud service providers use their owned data centers (often and computer resources) to host cloud computing-based infrastructure and services for customers on a pay-as-you-go subscription.  

A core component of a cloud service provider's offerings includes advisory services to evaluate an organization's technical environment and requirements to map out a cloud migration strategy.

For SaaS services/products, cloud service providers may host and deliver their owned IT MSPs or can act as a third party, hosting apps of independent software vendors.

Examples of cloud service providers/platforms are Amazon Web Services (AWS), Google Cloud and Microsoft Azure.

Network & cloud security service providers

Cloud security also refers to the technologies, controls, IT policies and services that protect cloud data, apps and infrastructure from human and cyber threats, such as hacking, deletion, theft and more.

Cloud Security providers provide cloud security services that mitigate cloud data risk and improve compliance with cloud environments. 

Cloud Security is a part of a network or computer security. Examples of cloud security services include:

  • Network Administration.
  • Data Loss Prevention.
  • Email Security.
  • Identity & Access Management.
  • Web Security.
  • Intrusion Detection.

Examples of Cloud Computing Security service providers are:

  • VMware.
  • Cisco Cloud.
  • Microsoft Azure.
  • CipherCloud

... and more.

Digital adoption service providers

An IT digital adoption platform (DAP) or service provider is a software layer integrated with another software website or application to guide users through functions and tasks.

DAP providers aim to help new users learn how to interact and use apps or websites or assist returning users in learning added functions. This improves new-user onboarding and drives new features adoption that may otherwise go ignored.

Examples of DAP tools are Pendo, Scribe, Whatfix, Appcues and more.

DAP tools can also be used to train new employees on the software used in-house. Most of them are customizable and allow integration of other applications.  

Software as a Service (SaaS) providers

If you're a digital nomad, you've probably met the word SaaS over the Internet. What is SaaS, you may ask? 

SaaS stands for software as a service and is a way of delivering software applications over the Internet — as a service. So, rather than installing and maintaining software, businesses or individuals access it through the Internet. This frees them from complex business process software and hardware maintenance and management.

Almost all apps and web services today can be offered over the Internet today depending on the industry, service and audience. 

Examples of SaaS providers include:

... and more.

Storage service provider

A Storage service provider (SSP) is a company that provides digital computer storage space and related management services, including archiving and periodic data backup.

Businesses can lease cloud storage on demand or per month. Businesses use cloud storage providers to store data in remote data centers rather than store data on local storage devices like hard disk drives, tape, flash storage, etc. You may use an MSP knowledge base or CRM based on your needs.

Examples of Cloud Storage providers include:

  • OneDrive.
  • GoogleDrive.
  • AmazonDrive.
  • DropBox.

... and more. 

Hosting service provider

A web hosting provider company enables businesses (or individuals) to avail their websites through the World Wide Web. Hosting providers offer varying services, including website design, storage space, internet connectivity, etc.

Examples of Hosting services include:

  • HostGator.
  • BlueHost.
  • WordPress.
  • Microsoft

... and more. 

On-demand data backup services

Cloud backup was once majorly for small businesses that needed fully managed IT services.

Now, it's an essential consideration for businesses of all sizes, including corporations. Other than backup services, cloud backups ensure that all data is safe from hardware failure or accidental deletion. 

Examples of on-demand data backup services include:

  • iDrive.
  • BackBlaze.
  • Acronis.
  • Carbonite.

... and more.

Application service provider (ASP) (application development & hosting)

Application hosting allows businesses and developers to deploy and run applications over the Internet — on the server, cloud or server.

Application development and hosting providers host these servers. Most application development and hosting services are provided as Software as a Service (SaaS) solutions.

Examples of application development and hosting service providers are:

  • Back4App.
  • Firebase.
  • AWS Managed Databases.
  • Azure.

Business process automation

Business process automation (BPA) involves using Software to automate multistep, repeatable business processes or transactions. You may also know this as MSP automation.

Unlike other automation types, BPA solutions are often more complex, connected to multiple enterprise IT systems and tailored specifically to an organization's needs.

Business process automation should be confused with business process management, which is a larger discipline involving organization-wide complex processes.


Examples of Business Process Automation service providers include: 

  • Employee onboarding or DAP service provider tools.
  • Purchase orders.
  • Performance management.
  • Claims processing.
  • Auditing.
  • Vendor management. 

IT disaster recovery services

Disaster recovery as a service (DRaaS) allows/helps an organization to back up its IT infrastructure and data in a third-party cloud computing environment and provide DR orchestration through SaaS.

This helps organizations regain access and functionality to their data and IT infrastructure after a disaster. 

The as-a-service DR model means that the enterprise client doesn't need to own all the DR resources or handle all the DR management, instead relying on the DR service provider.

True DRaaS mirrors the complete IT infrastructure on virtual servers, in fail-safe mode, including computer, networking and storage. An organization continues to run applications from the service provider's cloud (or hybrid cloud) environment rather than disaster-prone physical servers. This allows recovery much faster or even instantaneous. 

Examples of DRaaS service providers include:

  • Azure Site Recovery.
  • IBM DRaaS.
  • Redstor Backup for Microsoft 365.
  • VMware Cloud Disaster Recovery.
  • Recovery Point.
  • Axcient x360Recover.

How to choose an IT service provider

The crux of IT services providers today is the benefit of timely, reliable services that provide IT solutions and prevent and fix problems for enterprises.

Organizations that use ISPs can keep up with the pace of the changing technology.

But how do you choose an IT service provider that fits your needs?

Check out their testimonials & reviews

Don't see any reviews or testimonials? That's a red flag. Today, people are willing to leave testimonials and reviews easily. If an IT company has no customer evaluations, it should be off your list.

Awards & certifications

A service provider with awards shows that the clients and industry values its efforts. Certifications show that the company is willing to go outside its way to provide the best. A reputable IT Service Provider often prominently displays their certifications and awards.

Does the provider know your industry?

Check out for a provider that understands your industry and business model.

This provider will more easily anticipate your needs, establish your requirements, ask the right questions and provide effective solutions. You'll benefit more from a company that has served another company in your industry. 

Support & ease of contacting the service provider 

Can you reach the support provider's support team anytime? Look through their contacts and website. Find out if they offer multiple methods of support contacts (phone, email, contact form, service tickets or a physical address). Take note if the company doesn't have at least three ways to reach them. How you reach the company in an emergency is an important decision to make. 

Do they support your system? 

The service provider might be supporting your industry but not your system. Before you contract, you need to check if they actually support your system. This could be the most critical element of choosing an IT service provider. A reputable ISP should provide a web page (or row) section listing the names of technology providers they install, support, maintain or partner with.


Cyber threats are real, disasters happen and servers crash. In large part, these three things make  IT service providers popular daily. IT services take full responsibility for implementing, managing, supporting and maintaining organizations' IT needs and solutions. Yet, not all IT services are the same. 

You should find an IT service provider that works in your industry, is real and provides the best services for your business needs. 

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