A Managed Service Contract, or Managed Service Agreement (often abbreviated to MSA) is a contract under which a business outsources the responsibility for maintaining its IT systems to a third party.
It is often contrasted with the break/fix outsourcing model where a service provider performs on-demand services only when needed and requested by the client business because something has gone wrong.
Services provided under an MSA may well require the provider to respond to requests on demand because things have broken, but the services will typically include ongoing monitoring of software and hardware, proactive updating and patching of systems, virus checking, conducting back-ups and other services to minimise the occurrence of problems before they happen.
A Managed Service Agreement can also be contrasted with a Master Services Agreement. The latter is a master contract with terms that govern multiple separate contracts made under it, for multiple separate projects. Usually each project is governed by a “Statement of Work” (often abbreviated to SOW).
Managed Service Agreements typically contain a list of the services that the service provider will perform and, for some of those services, it will include service levels – setting the standard to which the services will be performed. Therefore, sometimes, MSA’s might be casually referred to a Service Level Agreements or “SLA’”s. The schedule of an MSA that contains the service levels might also be called the “SLA”.