TL;DR: Managed service providers often stumble by miscommunicating value, overpromising capabilities, offering poorly scoped service options, neglecting marketing, choosing the wrong partners, or scaling too quickly. These mistakes are largely preventable. Clear communication, realistic commitments, focused service packages, aligned marketing, strong partnerships, and sustainable growth help MSPs deliver consistent value and build long-term customer trust.
Many organizations rely on managed service providers to support understaffed IT teams, but MSPs can introduce new challenges if expectations, scope, and delivery are not aligned. Understanding the most common MSP mistakes helps both providers and customers avoid poor outcomes and build more effective partnerships.
What is a managed service provider (MSP)?
A managed service provider (MSP) manages all or part of a customer’s IT infrastructure, applications, and security on an ongoing basis. Unlike break-fix models, MSP customers pay for defined services rather than individual incidents.
Hiring a third-party provider to manage IT services allows businesses to lighten the workload of IT teams, leverage the benefits of new technology without (hardware, software, infrastructure, additional headcounts), and gain access to technical expertise that they lack or are not able to hire for. Examples of managed IT services include:
Network and infrastructure management
Security (including remote monitoring and management)
Technical support
Application management
Backup and disaster recovery
Cloud migration and cloud infrastructure management
IT consultancy and professional services
Business intelligence and data analytics
Why use an MSP?
Many companies turn to managed service providers for help keeping up with increasing demands. In the sysadmin world, understaffed and overworked teams are, unfortunately, more common than we’d like them to be. It’s not unusual to find a small IT team supporting hundreds or even thousands of users across the entire organization. The complexities of managing remote environments and supporting ever-growing grand plans for digital transformation can be overwhelming for in-house teams, especially without adequate resources, bandwidth, or expertise.
What are the main types of managed service providers?
Managed IT services providers may offer fully managed or comanaged solutions, where they work with in-house IT teams to manage a company’s IT infrastructure and strategy. And they may focus on one technology (pure-play MSPs) or include third-party services and solutions from other providers (hybrid MSPs). Some common types of MSPs include:
Managed security service providers (MSSPs)
MSSPs specialize in providing their customers with end-to-end managed IT security services. This ranges from vulnerability scanning and managing corporate firewalls to 24/7 network monitoring and management. The move to hybrid and remote workforces has led to increased security risks. Working with an MSSP can help companies to reinforce and enhance their security infrastructure against cyber threats.
Specialty MSPs
Some managed IT services providers specialize in a certain technology platform (Microsoft Azure), hardware service (VoIP), or industry (healthcare). Focusing on a niche segment and building expertise in that area can differentiate an MSP from the competition, giving it an edge over others.
Cloud MSPs
Cloud MSPs help organizations migrate to and manage cloud environments, including data migration, access management, security, and disaster recovery. The market for cloud managed IT services is steadily growing thanks to the increasingly widespread adoption of cloud technologies and strategies.
6 common mistakes that MSPs make and how to avoid them
Whether you’re a customer or a provider of managed IT services, it’s important to know the common pitfalls that MSPs may experience. Calling out and addressing these mistakes — many of which are preventable — could help cultivate better industry practices, raise service standards, and achieve better results in the longer term.
1. Miscommunicating
Miscommunication occurs when MSPs focus on technical detail instead of customer outcomes. Using excessive jargon or overexplaining services makes it harder for customers to understand value and make informed decisions.
Solution: Tailor the conversation to each customer and their level of understanding and encourage questions. Be clear about deliverables and be upfront about any risks and limitations involved so that they can make informed decisions.
2. Overpromising
Overpromising happens when MSPs commit to services, timelines, or outcomes they cannot realistically deliver. In a competitive market, pressure to close deals can lead providers to oversell their capabilities, which often results in missed expectations, reputational damage, and potential legal risk.
Solution: Focus on the quality and value offered to customers. Highlight your strengths and specializations, but be realistic about what can be done in relation to customer requirements, timelines, and resources.
3. Offering too much or too little flexibility
Poor service flexibility occurs when MSPs offer packages that are either overly complex or too rigid to meet customer needs. Too many options can confuse buyers and strain delivery consistency, while too few options can limit appeal and reduce fit across different customers.
Solution: Streamline purchase options and scope them around areas of specialization with clear deliverables. Ideally, service packages should be aligned with what customers generally need. A curated list of add-on services can be offered for some degree of flexibility.
4. Marketing (or the lack of)
Marketing becomes a mistake when MSPs rely solely on sales or run disconnected campaigns without a clear strategy. Inconsistent messaging or unclear positioning makes it harder for potential customers to understand value and differentiate one provider from another.
Solution: Work with your marketing team to develop a marketing plan that drives specific business outcomes. Create meaningful, useful, and credible content for target audiences. Prioritize topics that can help in their work and are relatable even to a nontechnical audience, like cybersecurity or how to create BYOD policies for companies.
5. Not working with the right partners
Partner misalignment happens when MSPs work with vendors that do not support their service standards or business model. Poor partner fit can degrade performance, complicate workflows, and negatively affect customer trust and brand reputation.
Solution: Choose partners who complement your business model, share similar values, and who are just as committed to delivering quality work and high service standards. Scope the partnership clearly, streamlining workflows for greater efficiency and seamless collaboration.
6. Growing too fast
Unsustainable growth occurs when MSPs scale faster than their teams, processes, and tools can support. Rapid expansion without adequate staffing and operational maturity often leads to burnout, declining service quality, and customer churn.
Solution: It’s better to aim for sustainable, quality growth rather than quick wins. Take time to hire people with the right skills and experience for the business. Focus on delivering consistent and reliable results over time and cultivating strong, long-lasting customer relationships.
What qualities define a good managed service provider?
The best MSPs are the ones that not only meet compliance and regulatory standards but add real, tangible value to the organizations they serve. Going beyond a transactional client-vendor relationship to develop meaningful partnerships with customers, a good managed service provider actively provides the resources and opportunities for innovation and long-term growth. Here’s a list of qualities to nurture and build on.
A proactive, customer-centric approach
Strong track records and/or referrals
Fast response times
Areas of specialization
Services that are scalable
Reliable, reputable partners
Clear and transparent communication
Provider accountability (which should be reflected in the service level agreement)
Having the right tools also makes a difference. This was a lesson that HEROIC, a Utah-based MSSP, quickly learned when they overcame the sudden disruptions of a global pandemic by using SmartDeploy to set up hundreds of new computers for a healthcare client. To learn about more real-world applications across a wide range of different industries, check out the rest of our case studies.
Whether you’re delivering managed services or assessing an MSP, reliable computer imaging reduces risk and manual work. Try SmartDeploy free to see how standardized provisioning fits your environment.
