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These days it seems as if there are managed services for every facet of IT: information security, communications, network management, help desk support, systems management, storage and printing, to name a few. On a practical level, using these services can mean offloading functions to providers who are expert in handling them. On a more strategic level, it can enable IT to focus on innovative projects that can help expand the business.

Organizations that use managed services entrust one or more of these functions to a service provider, typically for a monthly fee. In some cases the provider monitors a client's systems, networks or applications remotely to ensure that everything is running as it should be—and fixes problems as they arise.

The potential benefits for organizations that hire such providers include improved services and the ability to focus on core business processes and meeting strategic goals. The services can be especially helpful for smaller companies that lack the in-house expertise and resources to handle particular functions.

For IT departments, the use of a managed services provider (MSP) can free up management and staff to work in concert with business leaders to develop innovative projects that will differentiate the organization from its competitors.

There are risks to hiring a service provider, however. As with any type of outsourcing arrangement, using a managed service involves some loss of control. In addition, service providers might fail to deliver services as promised.

Whatever risks there are don't seem to be discouraging companies from hiring managed services providers. Demand for services is on the rise, says Charles Weaver, co-founder and president of the MSPAlliance, a global organization of managed services providers and service-enabling technology vendors, who work to promote managed services and educate the industry and end-user organizations on the use of managed services.

According to data gathered by the alliance in 2006, 97 percent of managed service providers said their services revenues had increased over the previous 12 months. Weaver says end-user organizations queried by the alliance said virtual private networks, servers, firewalls and desktop computers were the most typically managed IT components. When organizations were asked why they had purchased managed services, security and increased employee performance were the most commonly cited reasons, he says.

So how do you choose a managed services provider? One obvious criterion is that the provider should have extensive experience and a solid reputation in whatever service area you're looking to have managed. The MSPAlliance offers a Managed Services Accreditation Program to benchmark companies in the industry on the basis of factors such as financial well-being, business practices, client references and service delivery processes.

"Businesses looking for qualified MSPs need to be on the lookout for accredited MSPs," Weaver says. They should also ask service providers if they are willing to provide client references. Other factors to look for are whether the service provider offers remote management capabilities; proactive monitoring to prevent problems, such as network failures, from occurring; and flexible pricing and financing options.

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