Managed services is the practice of outsourcing on a proactive basis management responsibilities and functions and a strategic method for improving operations and cutting expenses. It appears as an alternative to the break/fix or on-demand outsourcing model where the service provider performs on-demand services and bills the customer only for the work done. Under this subscription model, the client or customer is the entity that owns or has direct oversight of the organization or system being managed whereas the managed services provider (MSP) is the service provider delivering the managed services. The client and the MSP are bound by a contractual, service-level agreement that states the performance and quality metrics of their relationship.

Adopting managed services is known to be an efficient way to stay up to date on technology, have access to necessary skills and address a range of issues related to cost, quality of service and risk. As the IT infrastructure components of many SMB and large corporations are migrating to the cloud, many MSPs (managed services providers) increasingly facing the challenge of cloud computing, a number of MSPs are providing in-house cloud services or acting as brokers with cloud services providers.