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Managed Services Agreement: Everything You Need to Know

Managed Services Agreement: Everything You Need to Know

A Managed Services Agreement (MSA) can simplify navigating the complex IT landscape. This vital contract defines the partnership between your business and a managed services provider, outlining responsibilities, services, and terms to ensure the smooth operation of your IT infrastructure. 

Discover the essentials of a Managed Service Agreement in this comprehensive guide. From structure and components to benefits and variations, gain clarity and direction for business owners, IT professionals, and anyone interested in IT partnerships.

Get ready for a comprehensive look into the cornerstone of managed IT services!

What is a Managed Services Agreement?

A Managed Services Agreement (MSA) is a written contract between a provider and its client outlining the service level the provider will deliver. This kind of agreement is essential for outlining the scope of services rendered, payment schedules, and the standards the service provider must meet, ensuring smooth business operations and high customer satisfaction.

Managed Services Agreement vs. Master Services Agreement

While a Managed Services Agreement is focused on IT and security services, a Master Services Agreement (MSA) is a broader contract that outlines the general terms and conditions under which a service provider will work with a client. The Master Service Agreement can encompass various contracted services, not just managed services, making it more versatile.

How is a Managed Services Agreement Different from a Scope of Work or Statement of Work?

The MSA defines the legal framework for the contractual relationship between parties, while the SOW focuses on particular projects or transactions. A Managed Services Agreement establishes the comprehensive terms and relationship between the service provider and the client, ensuring clarity and effectiveness.

On the other hand, a Scope of Work (SOW) or Statement of Work is a document that typically specifies the particular projects or tasks within that established relationship.

What to Include in a Managed Services Agreement

When drafting a Managed Service Agreement, it is vital to include:

  • Detailed list of services provided
  • Payment details, including structure and schedule
  • Service level agreements
  • Termination procedures
  • Liability protection clauses
  • Confidentiality and data protection clauses

What a Managed Services Agreement Does for Clients and Companies

A well-drafted managed service agreement brings about several benefits:

Clarity and Transparency

It provides clear expectations of the services rendered and payment, fostering transparency and ensuring a mutual understanding between the service provider and the recipient. This practice promotes trust and reduces the likelihood of misunderstandings by explicitly defining the project’s scope, deliverables, and corresponding costs.

Clients can have a clear picture of what to expect, while providers can maintain accountability and deliver a high level of service.

Risk Management

By implementing liability protection clauses, companies can effectively mitigate and manage the potential risks inherent in providing IT services. These contractual agreements offer protection, ensuring that both parties are safeguarded against unforeseen circumstances or liabilities during the IT service engagement.

With liability protection clauses in place, businesses can confidently navigate the complex landscape of IT services, knowing that they have measures in position to address and mitigate any potential risks or legal issues that may occur.

Efficient Resolution

Service level agreements (SLAs) play a vital role in ensuring the timely and efficient resolution of any issues that may arise. Establishing clear expectations and performance metrics helps maintain a high quality and responsiveness in addressing customer concerns. 

With defined response times and escalation procedures, organizations can proactively manage and prioritize issues, ultimately improving customer satisfaction and trust in the services provided.

Stable Operations

Ensures continuous monitoring and proactive management of IT systems, which is crucial in maintaining stable and efficient business operations. These systems help organizations minimize downtime, enhance productivity, and safeguard critical data by constantly analyzing and optimizing performance. 

With their robust capabilities, they provide the necessary foundation for seamless digital transformation and growth.

What are the Potential Contract Issues?

  1. Undefined Service Scope: A lack of clarity in the services can lead to misunderstandings and unmet expectations between the business and the managed services provider. Clearly defining the scope of service is crucial to avoid potential disputes.
  2. Inadequate Liability Protection: Insufficient liability protection can expose both parties to unnecessary risks. Establishing terms that protect the interests of the service provider and the client is imperative.
  3. Ambiguous Payment Schedule: A transparent payment schedule can lead to financial disputes. The agreement must specify the payment structure, including the monthly fee, to ensure timely and accurate compensation for services rendered.
  4. Unsatisfactory Service Levels: Without a well-defined service level agreement, the quality and timeliness of service delivery might be compromised, affecting customer satisfaction and business operations.
  5. Inflexible Termination Clause: A rigid termination clause can restrict the ability of both parties to exit the agreement under reasonable terms, potentially leading to prolonged dissatisfaction and operational issues.
  6. Misaligned Expectations: Mismatched expectations regarding service offerings, support, and security services can undermine the partnership, causing friction and dissatisfaction.
  7. Lack of Valid Exemption Certificates: The absence of valid exemption certificates can result in compliance issues, affecting the legitimacy and smooth functioning of the managed service provider’s operations.
  8. Discrepancies in Contracted Services: Any inconsistencies or discrepancies in contracted services must be addressed and resolved promptly to avoid disruption in service provision and maintain a harmonious relationship.

Clients and managed services providers can foster a mutually beneficial partnership by proactively addressing these potential contract issues, ensuring smooth and efficient business operations.

Types of Managed Services Agreements

Types of Managed Services Agreements

There are various types of managed services agreements, each catering to different business needs:

IT Services: Focuses on managing and maintaining IT infrastructure.

Security Services: Offers specialized security monitoring and management.

Support Services: Provides ongoing support and customer satisfaction initiatives.

Cloud Services: Offers cloud-based solutions and management.

Communication Services: Manages communication systems such as VoIP and UCaaS.

Data Backup and Recovery Services: Ensures data backup, disaster recovery, and business continuity planning.

Managed Print Services: Manages printing infrastructure and supplies.

Advantages of a Managed Services Agreement

Implementing a Managed Services Agreement offers several advantages:


A transparent payment schedule can significantly improve budgeting capabilities. By knowing exactly when and how much must be paid, individuals can effectively plan and allocate their financial resources, ensuring a smoother and more organized financial journey. 

It helps avoid surprises or unexpected expenses and promotes a sense of control and stability in managing personal finances.

Focus on Core Business

By entrusting the management of the IT aspect to a reliable service provider, companies can direct their attention and resources towards their core business operations. It allows for greater focus on critical tasks and strategic decision-making, improving efficiency and productivity. 

With the burden of IT-related responsibilities taken care of, organizations can easily optimize their workflows and achieve their business goals.

Proactive Approach

Managed service providers are essential for maintaining seamless business operations. They identify and promptly resolve issues before they can impact overall performance. With their vigilant monitoring and proactive approach, these providers detect and address potential problems, allowing businesses to prioritize their core operations without interruptions or disruptions.

This proactive approach enhances business efficiency and helps mitigate risks, ensuring businesses thrive in an increasingly competitive landscape.

Access to Latest Technologies

Managed service providers continually update their technology and systems to keep up with the ever-evolving IT landscape. By partnering with such providers, businesses can gain access to the latest technologies without incurring heavy costs associated with constant upgrades. 

It enables companies to stay at the forefront of technological advancements, giving them a competitive advantage in their respective markets.

 24/7 Support

In today’s fast-paced business world, any downtime can lead to substantial financial losses, a damaged reputation, and a loss of valuable customers. However, businesses can enjoy round-the-clock support by partnering with managed services providers, ensuring immediate access to expert assistance whenever an issue arises.

This proactive approach guarantees uninterrupted operations and peace of mind. It helps organizations maintain high productivity and minimize potential disruptions’ impact.

Cost Savings

Outsourcing IT functions to managed service providers can result in significant cost savings for businesses. These providers offer flexible pricing models, allowing companies to pay only for the services they require and use. 

It eliminates the need for expensive equipment purchases and hiring additional staff, reducing overall IT costs.

Expertise and Experience

Managed services providers have specialized knowledge and experience in various areas of IT, making them well-equipped to handle any technical challenges a business may face. Their team comprises exceptionally talented professionals adept at offering support and guidance on intricate IT matters.

It allows internal resources to be freed up, enabling them to concentrate on essential business functions.

Proactive Maintenance

Managed service providers offer proactive maintenance and monitoring of IT systems, identifying and addressing potential issues before they become significant problems. It helps businesses avoid costly downtime and ensures that their IT systems always run at peak performance.


As a business expands, its IT requirements evolve accordingly. Managed services providers offer flexible and scalable solutions that can readily adapt to the changing needs of a growing organization.

It ensures seamless alignment between technology and business objectives, enabling efficient operations and sustained growth. It allows businesses to focus on growth without worrying about managing complex IT infrastructure.


With increasing cyber threats, businesses must ensure their IT systems are secure. Managed service providers provide advanced security measures to protect against these threats and keep business data safe. 

They also regularly update and patch systems to prevent vulnerabilities, providing peace of mind for businesses.

Components of a Managed Services Agreement

Components of a Managed Services Agreement

A Managed Services Agreement (MSA) is built on several foundational components that structure and govern the relationship between a business and a managed service provider. Here, we’ll dissect the vital elements that typically form the essence of such agreements:

  1. Scope of Services: This outlines the specific services the managed service provider will offer, such as network management, security, and support services. This component ensures both parties have clear expectations regarding the services rendered.
  2. Service Level Agreement (SLA): The SLA defines the level of service expected, detailing the quality, availability, and responsibilities associated with the services provided. It acts as a benchmark for customer satisfaction and service provider performance.
  3. Payment Structure: This component specifies the payment terms, including the monthly fee, payment schedule, and additional charges for extra services. It ensures transparency and clarity in the financial aspects of the agreement.
  4. Termination Clause: A termination clause outlines the conditions under which either party can end the agreement. It provides a clear exit strategy, protecting the client and the service provider.
  5. Liability Protection: This section defines the limits to the service provider’s liability, offering protection against potential legal claims associated with the services provided.
  6. Confidentiality and Data Protection: A critical component in today’s digital age, this section outlines the measures to protect sensitive data and maintain confidentiality.
  7. Customer Duties: This part explains the client’s responsibilities, such as providing access to necessary resources and cooperation, to ensure successful delivery of services.
  8. Support and Communication: Detailing the channels and means of communication, this component ensures that support services are effectively rendered, and issues are promptly addressed.
  9. Compliance and Governing Law: This section addresses the legal frameworks and standards the managed service provider and the client must adhere to throughout the agreement.

Understanding these components is essential for both parties as they enter into a Managed Services Agreement, fostering a successful partnership and ensuring business operations run seamlessly.

Bottom Line

A Managed Services Agreement is crucial in establishing a solid partnership between a client and a managed service provider. It provides clarity in risk management and enables efficient business operations. 

By gaining a deeper understanding of the various components, types, and benefits of such agreements, companies can effectively leverage managed services for their IT requirements, ensuring enhanced security, stability, and customer satisfaction.

In the ever-evolving digital landscape, a robust Managed Services Agreement is crucial. It’s the blueprint for ensuring efficient IT operations and securing interests.

Trusting an industry leader like Adivi amplifies this assurance, turning a simple IT service into a partnership dedicated to excellence. As you venture further into the digital world, remember the significance of a solid MSA, and consider Adivi as your reliable ally in this journey.


Can you provide an example of a managed service?

Examples are network monitoring, security, virtualization, disaster recovery, and application and infrastructure management to provide connectivity. These services can be customized based on the client’s specific requirements.

Is it possible to have a SOW without an MSA?

It is possible to create one without the other. However, an MSA provides a clear framework and sets expectations for the overall engagement, while an SOW outlines specific tasks and deliverables.

How do you terminate a service agreement?

To terminate a managed services contract prematurely, engaging in a constructive conversation with the other party involved is advisable. Often, a straightforward negotiation is sufficient to achieve a mutually agreeable resolution.

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