A managed service provider supplies businesses with information technology needs via the Internet. These needs are typically network monitoring, remote data backup, and network security, but can also include other more new age technology services such as Virtual Private Networks and Voice Over Internet Protocol services. A business will contract with a managed service provider to fill certain needs that are met more cost effectively by outsourcing than by purchasing and supporting equipment in-house. This sort of arrangement makes good economic sense for both small and large companies, especially since managed service providers specialize in technologies that all businesses might not have the resources to support.

For example, a company that specializes in remote data backup does this all the time, all day long, for clients near and far. This company will have all the latest equipment and all the latest encryption techniques and protocols, as well as a vested interest in making sure that its services are top-notch. Because security is its focus, this company has security on the front burner all the time. The company that hires this managed service provider to produce remote data backups, on the other hand, will necessarily have other concerns that struggle for notice in the company's daily business.

Outsourcing other parts of a company's business makes economic and technological sense as well, especially if it's something like Voice Over Internet Protocol (VoIP), which is continually updated with newer and more powerful functionality. Virtual Private Networks (VPNs) also necessarily have security protocols that are nearly always rotating or changing to provide protection against hackers. Many companies find it easier to take advantage of a VPN provided by a managed service provider; in this way, they spend only money, not time and money.