Managed vs. Cloud Service Provider: Choosing Your Partner

In this article we discuss:

• What Is a Managed Service Provider?
• What Is a Cloud Service Provider?
• MSP vs. CSP: 5 Key Differences
• How Managed and Cloud Services Work Together
• Future Outlook for Managed Cloud Models

Imagine your company’s technology stack is like a classic car. It’s reliable, gets the job done, and has some great history. But now, you need to add a brand-new, powerful engine that requires cutting-edge fuel and totally new maintenance. 

Modern enterprises are like that. They often run on a mix of legacy applications, private data centers, and public clouds. But as digital transformation across enterprise architectures accelerates, CIOs face a growing tension—maintaining operational stability while also modernizing and scaling infrastructure. How do we keep the classic running smoothly while also adding the latest modern tools and scaling up?

Managing this balance internally can drain budgets and bandwidth, pushing many organizations to seek specialized partners that bring both discipline and innovation to IT. Two common types of support are managed services and cloud services. While both are excellent options, they solve distinct problems:

• A managed service provider offers end-to-end management and support for your day-to-day operations, much like hiring a full-time mechanic to keep your whole car running. 

• A cloud service provider primarily gives you the core computing power and storage (infrastructure) you need to grow, like a high-end garage renting you their most advanced tools and workspace.

To choose the right one for their enterprise, CIOs must have a strong handle on the differences between a managed service provider vs. cloud service provider as well as their own support needs and priorities for growth.

What Is a Managed Service Provider?

Managed service providers (MSPs) take on the daily management of an organization’s IT environment.They oversee your networks and core infrastructure, address technical issues, and ensure all your systems are running effectively and reliably.

Partnering with an MSP gives your company constant access to expert support. This is a huge win for in-house technology teams because it frees them up to focus on exciting projects that directly move the business forward. MSPs are especially valuable in hybrid cloud environments—where some programs run locally and others in the cloud—because they make sure everything works together seamlessly.

Core areas of MSP expertise include:

• Network and infrastructure monitoring: Overseeing servers and networks to detect and address issues before they disrupt operations

• Cybersecurity and compliance: Handling data governance implementation, security measures, threat detection, and alignment with regulatory requirements

• Data backup and recovery: Regular backups and fast restoration to support business continuity after outages or security incidents

• Software and patch management: Coordinating updates and patches to keep systems secure and current.

• End-user support: Direct technical assistance that reduces pressure on internal IT teams

A good managed service provider acts as an extension of an organization's IT department, working with their teams to keep IT ecosystems running smoothly. By offloading operational demands to a trusted partner, internal teams can spend time on strategy and modernization initiatives that support business growth.

What Is a Cloud Service Provider?

Cloud service providers (CSPs) deliver on-demand computing resources—servers, storage, databases, and applications—over the internet. Think of your favorite streaming service— a CSP is (kind of) similar. Instead of physical servers, you instantly get access to all the computing power, storage space, and applications you need. Organizations simply use  CSP platforms to host, scale, and manage workloads.

Gartner predicts that 90% of organizations will be using cloud-based solutions by 2027. In particular, they’ll be utilizing hybrid environments that combine different providers and environments to optimally support business needs. CSPs specialize in providing this type of flexibility and control over how organizations manage and maintain their IT resources.

This helps them move faster with new projects, lowers the big upfront costs of buying equipment, and allows for secure global access—a critical advantage as hybrid and remote work models become standard.

Core areas of CSP capability include:

• Infrastructure scalability: Rapidly scale computing power, storage, and networking resources to match changing workloads without major capital investment
• Application agility: Enable faster development and deployment through integrated platform tools and APIs that support innovation cycles and cross-team collaboration
• Performance optimization: Leverage automated provisioning, monitoring, and load balancing to maintain consistent performance and user experience globally
• Security and compliance: Provide built-in encryption, identity management, and governance controls that meet enterprise-grade security and regulatory requirements
• Data management and resilience: Support backup, recovery, and distributed storage to ensure uptime and protect against data loss or system failures

Today the cloud services market is held largely by three providers: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). Each offers comprehensive service portfolios to support enterprises of all sizes and  industries.

The right partnership helps organizations enhance their IT reliability and direct investments toward strategic goals—all while retaining the agility needed to adapt as those goals evolve over time.

Managed Service Provider vs. Cloud Service Provider: 5 Key Differences

The global market for outsourced IT services has been growing steadily for nearly a decade, and is projected to continue doing so, surpassing $1B by 2030. To keep pace with the market, it’s critical your business understands how to get the most out of its partnerships with managed and cloud service providers. 

Those partnerships define how your company distributes tasks and responsibilities across its IT team. Here are five key factors to consider:

    1. Service Scope

MSPs support your existing technology systems, keeping them secure, fast, and fully working. And while they advise on business enterprise architectures and vendor selection, they don’t provide the underlying infrastructure. They just manage the system once it is set up. 

CSPs, on the other hand, deliver the technology—the computing power, storage space, and network resources you need to run your digital business. They offer native tools and APIs needed to integrate cloud resources with existing systems for unified IT visibility and management.

    2. Ownership and Control

In MSP partnerships, you keep ownership of your systems and data, but the provider manages the daily work. The provider works within the client’s environment to monitor performance and resolve issues, but decisions about IT architecture, policies, and access remain internal.

CSPs, by contrast, own and maintain the core infrastructure (the hardware, network, etc.). The provider secures the cloud itself—the hardware, network, and physical infrastructure—while you are responsible for what runs in the cloud, including data, identities, and configurations.

    3. Customization

Both MSPs and CSPs balance structure with flexibility, but in different ways. MSPs work from established service models that can be adapted to each organization’s infrastructure, compliance needs, and operational priorities. Their flexibility comes from how services are delivered and integrated across on-premises and cloud systems.

CSPs, meanwhile, offer flexibility within the platform itself, providing a broad range of configurable services, APIs, and deployment options. Customization is extensive but defined by the boundaries of the provider’s ecosystem rather than by bespoke service design.

    4. Pricing Models

MSPs structure pricing around defined service commitments, usually a monthly or yearly contract with coverage outlined—such as infrastructure monitoring, patching, or user support—and costs that scale by environment size or complexity. This creates predictable spending and clear accountability for service delivery.

CSPs price their services based on actual resource consumption. Charges vary with usage of compute, storage, and network capacity, though costs can be optimized through reserved instances, volume discounts, or long-term commitments. The model provides flexibility and aligns cost directly with demand.

    5. Support Approach

MSPs provide high-touch, context-driven support. They work closely with internal teams, manage day-to-day operations, resolve issues directly, and advise on long-term infrastructure strategy. This proximity allows them to anticipate needs and tailor guidance to each customer environment.

CSP support is standardized for scale. Assistance is delivered through defined tiers, online portals, and automated tools that address common use cases across a broad customer base. While escalation paths exist, depth of engagement is more limited compared to that of a managed service offering.

How Managed and Cloud Services Work Together

In practice, working with managed and cloud service providers isn’t an either/or scenario. Smart CIOs are leveraging both to maintain IT environments tailored to their business needs and built for flexibility and scale. 

The value of the MSP/CSP partnership lies in how their services intersect, combining the scalability of cloud infrastructure with the operational rigor and governance of managed services. Advantages of the combined MSP/CSP model:

• Optimized spend and performance: MSPs help enterprises right-size and rebalance workloads across multiple CSPs, ensuring each application runs in the most cost-effective and high-performing environment.

• Integrated governance: Centralized policies, SLAs, and security frameworks create consistency across multi-cloud and hybrid environments, reducing risk and audit complexity.

• Accelerated innovation: MSPs free internal teams from day-to-day management, allowing CIOs to redirect resources toward modernization initiatives and faster cloud adoption.

• Continuous optimization: Through proactive monitoring and AI-driven analytics, MSPs help fine-tune performance, availability, and cost across every provider over time.

An example in practice: A global manufacturer relies on AWS for IoT data collection, Azure for ERP systems, and Google Cloud for AI-driven analytics, while maintaining its most sensitive IP in a private data center. Their MSP provides a unified control plane for cost, compliance, and workload orchestration across all environments. The CSPs deliver specialized infrastructure; the MSP ensures they operate as one cohesive, continuously optimized ecosystem.

Future Outlook for Managed Cloud Models

Enterprises are shifting from siloed cloud management to integrated hybrid strategies where MSPs and CSPs operate as partners in a unified ecosystem. MSPs are evolving into cloud-first enablers, overseeing workload orchestration, governance, and optimization across multiple platforms.

AI and automation are accelerating this shift, transforming how managed IT services are delivered and scaled through:

• Predictive operations: Machine learning anticipates performance issues, security gaps, and cost overruns before they affect the business.

• Policy-driven automation: AI applies configuration and compliance standards consistently across clouds and regions.

• Dynamic resource optimization: Intelligent workload placement and autoscaling continuously balance performance and cost.

• Adaptive service delivery: Data-driven insights personalize management, reporting, and recommendations for each enterprise.

These capabilities are redefining what “managed” means in the cloud era. The future of enterprise infrastructure isn’t about choosing between an MSP or CSP but creating a seamless partnership that unites the two, combining the scalability of cloud platforms with the governance, visibility, and accountability of managed services.

The top priority for SMBs globally is increasing technology investments—but why? Explore this SMB Group report for key insights on how unified finance and HR systems are helping streamline operations and drive growth.