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Managed Service Provider: Defined
Managed services is the practice of transferring day-to-day related management responsibility as a strategic method for improved effective and efficient operations inclusive of Production Support and lifecycle build/maintenance activities. The person or organization who owns or has direct oversight of the organization or system being managed is referred to as the offer-er, client, or customer. The person or organization that accepts and provides the managed service is regarded as the service provider.
Typically, the offer-er remains accountable for the functionality and performance of managed service and does not relinquish the overall management responsibility of the organization or system.
A managed services provider (MSP), is typically an information technology (IT) services provider, who manages and assumes responsibility for providing a defined set of services to their clients either proactively or as they (not the client) determine that the services are needed. Most MSPs bill an upfront setup or Transition and an ongoing flat or near-fixed monthly fee, which benefits their clients by providing them with predictable IT support costs.
Managed Service Providers (MSPs) sometimes are contracted to manage multiple staffing vendors and to measure their effectiveness in filling positions according to a customer's standards and requirements. In effect, the MSP serves as a "neutral" party that offers the customer a complete workforce solution while ensuring efficient operation and leveraging multiple staffing companies to obtain competitive rates. MSPs typically use a Vendor Management System (VMS) as a software tool to provide transparency and efficiency - along with detailed metrics to the user - related to every aspect of the contingent and contract workforce. The model has proven its usefulness in the private sector, notably among Fortune 500 companies, and is poised to become more common in the government arena.
The business model behind managed services has been commonplace among enterprise level companies. The model has also been adapted to fit small to medium sized companies by the value-added reseller (VAR) community as they evolved to provide more consistent budgeting and higher levels of service to small businesses and mid-size enterprises.
A reseller is a company or individual that purchases goods or services with the intention of reselling them rather than consuming or using them. This is usually done for profit (but could be resold at a loss). One example can be found in the industry of telecommunications, where companies buy excess amounts of transmission capacity or call time from other carriers and resell it to smaller carriers
According to the Institute for Partner Education & Development, a resellers' product fulfillment-based business model includes a corporate reseller, retail, direct market reseller (DMR), and eTailer; less than 10 percent of its revenue comes from services