What are cloud managed services?

Cloud managed services are an IT model in which some to all cloud management and maintenance tasks are outsourced to a management provider, also known as a managed cloud service provider (MCSP). 

The MCSP can be the same company that also provides the cloud services, or a dedicated cloud service management provider. When using multiple clouds and services, having multiple MCSPs with different expertise can be helpful.

The main reason to use cloud managed services is straightforward: cloud platforms are complex, and managing them requires time, resources, and specialized knowledge. Cloud managed services abstract all of this complexity away and let businesses focus on their core processes without having to think about structural IT issues.

Find out how Aerospike's always-on, secured Aerospike Cloud Managed Service (ACMS) can optimize and secure databases so users can focus on delivering value.

Cloud managed services types

There are four main types of cloud managed services and countless subtypes. While new niches and acronyms are created almost daily, most are just branding exercises and trend-jumping and don't have much impact on typical business functions. The four primary (and one secondary) cloud managed service types, arranged in order from least to most abstracted, are:

• Infrastructure as a Service (IaaS): These services provide a blank-slate cloud experience, offering distributed servers, storage, and networking that allow users to deploy anything they want.
  Examples: Amazon EC2, Microsoft Azure VMs

  • Bare Metal as a Service (BMaaS): A subtype of IaaS where rather than offering virtualized hosting, users are given access directly to the physical servers to achieve faster speeds, a maximally customizable environment, and optimization opportunities not available in a VM.
    Examples: IBM Cloud, Rackspace
    

  • Storage as a Service (STaaS): Storage as a Service is a subtype of Infrastructure as a Service that provides a place for users to store any kind of digital assets they may need, from documents to media to raw data. While it falls under the IaaS umbrella, most users encounter it as part of a Platform as a Service (PaaS) offering, rather than purchasing storage infrastructure directly (e.g., subscribing to Google Drive [platform] rather than renting a terabyte of unformatted drive space).
    Examples: Amazon S3, Azure Storage blobs, Alibaba Cloud Storage
    

• Platforms as a Service (PaaS): The next level up in abstraction; these cloud managed services provide the infrastructure and a layer of software and applications on top that make building and running applications possible without managing the required software stack.
  Examples: Google App Engine, Amazon Amplify

  • Database as a Service (DBaaS) is one of the most common types of PaaS services. It offers users a preinstalled, preconfigured cloud database solution that can be further optimized to fit specific data types, structures, or operational needs (e.g., availability vs. speed).
    Examples: Azure Database, Amazon RDS, Google Cloud Bigtable
    

  • Explore the top 10 NoSQL cloud databases in Aerospike's detailed guide.
    

• Serverless Computing: A cloud managed service provider sitting somewhere between IaaS and SaaS that allows developers to write and run code without any exposed cloud infrastructure whatsoever. It's also sometimes referred to as Function as a Service (FaaS) or Compute as a Service (CaaS), though both of those also have more specific meanings.
  Examples: Amazon Lambda, Google Cloud Functions
  

• Software as a Service (SaaS): The most abstracted and common cloud managed service type, SaaS offers fully developed, turn-key applications. The cloud infrastructure is completely opaque to end-users.
  Examples: Microsoft Office 365, Netflix

How do cloud managed services work?

In a traditional business environment, companies that wanted to deploy technology would need to do so locally or on-premises (on-prem). This could be installing Microsoft Office on employee laptops (application), putting an Exchange Server in the basement (platform), or running a mainframe at corporate headquarters (infrastructure). This IT infrastructure model is often called on-prem, self-hosted, and legacy or traditional infrastructure.

Cloud services take these concepts and move them off-premises onto a network of computers distributed around the world in data centers and server farms. Microsoft Office becomes Office 365, an Exchange Server becomes Exchange Online, and the mainframe is replaced with an Azure virtual machine.

Differences between managed cloud services and on-prem services

The differences between cloud managed services and traditional infrastructure don't stop at where the service lives. Cloud services can feel similar to traditional approaches but range from almost the same under the hood to completely different.

Cloud services delivery models

Like any cloud architecture, managed cloud services come in three major delivery models; that is, what kind of cloud users get. Any combination of cloud managed services and cloud delivery models can work together, and the right combination will depend on the needs of individual users. The three main types of cloud delivery models are:

• Public cloud: The most common option, public cloud services run on shared infrastructure occupied by multiple tenants (users). Each tenant has its own space, and its data and processes don't overlap, but resources like bandwidth and computing power are split and shared.

• Hybrid cloud: The hybrid cloud splits services between public cloud servers and private servers dedicated to specific tenants. These kinds of cloud models are often used by enterprises that want to take advantage of the cloud but keep sensitive or proprietary data separate from any other tenant.

• Private cloud: A private cloud is a cloud environment that's dedicated to one tenant. It can be entirely owned and managed by the user on-prem, or it could be dedicated equipment controlled by the user but managed by a cloud provider in a data center.

What core services do managed clouds offer?

One of the biggest advantages of moving to cloud managed services is the ability to outsource a lot of the core functions of the IT department. Managed clouds will often handle many basic IT functions as part of their core services. These typically (but not always) include:

• Deployment, configuration, and migration: One of the biggest time and operational savings found with cloud services is deployment, configuration, and migration services. The MCSP will typically handle everything involved in getting a server up and running and will assist with moving from on-prem to cloud or from one cloud to another.

• System updates and patching: Cloud managed services providers are usually responsible for the equipment they run, including patching and updating their systems. This can be broken down into performance and security.

  • Performance monitoring and optimization: MCSPs will monitor the health and performance of the equipment cloud instance runs on and make changes as needed to ensure performance and availability remain high. Note that this might be a double-edged sword: an upgrade might improve performance but cause applications to break or create unexpected bugs.

  • Security: MCSPs will take care of securing and patching their hardware and services, though users are still often responsible for securing their own applications running on these services. As with performance optimization, security patches come at the price of potential bugs and disruptions to application functionality.

• Backup, recovery, and availability: Cloud managed services will usually keep backups by default, or at least have built-in systems to automate backups. These services will also allow for simple recovery in the event of an outage or disaster. MCSPs will also work to ensure that services are available at least at the terms of SLA, with best-in-class providers offering five-nines availability or better.

• Help desk and user support: Most managed cloud service providers offer some level of free user support and more in-depth paid support options.

Cloud managed service business benefits

All of the features and services provided through managed cloud hosting add up to real benefits for businesses that choose to use them.

• Operational efficiency: Using cloud managed services saves companies from having to build their own IT capability in-house, allowing them to focus on their core business.

• Cost efficiency and predictability: Cloud services charge for the capacity used, making them more cost-effective than self-hosting, even after accounting for service upcharges. These costs scale with use, making them predictable.

• Future-proofing: Using a cloud managed service, businesses get access to new technology and upgrades without needing to upgrade their own infrastructure.

• Stability, availability, and safety: Keeping infrastructure up and accessible is hard. It's even harder to do it in a way that safeguards networks. Cloud managed services make accessing tools easy from anywhere with an internet connection, and they ensure those services are secured with the latest standards, like the cloud database security framework used by ACMS.

• Compliance and regulation: The right cloud partner can simplify compliance and adherence to regulatory requirements by building those requirements directly into their service offering. This includes encryption and access management, hosting location selection, and automated data cleaning and verification to ensure data sent to the platform is fully compliant.

• Continuity and recovery: Distributed networks like cloud managed services can back up files and software around the world, making localized outages less likely and allowing for more secure backups.

• Speed and innovation: Companies using cloud managed services can accelerate the pace at which they innovate and ship features since they don't have to spend time on infrastructure, provisioning, deployment, or scaling.

• Elasticity and agility: Cloud services can scale from a handful of concurrent users to millions of concurrent users in minutes, and do so automatically if they're set up to auto-scale, giving businesses the freedom to grow as quickly as they want to.

The risks, challenges, and tradeoffs of cloud managed services

Cloud managed services offer a lot of features and benefits, but they also come with some risks and challenges that should be considered. These include:

• Vendor lock-in: While many MCSPs offer assistance migrating data into their service, they can also make it more difficult to migrate out. This can be proprietary structures or data-types, integrated ecosystems that require significant refactors to leave, or something as simple as lacking an integrated bulk data export function.

• Loss of fine control: The level of control available over the exact technology used in infrastructure will vary by the cloud options selected, but will always offer less granular control than building an in-house option.

• Shared resources: Without opting for a full private cloud, users will have at least some resource sharing with other tenants on cloud managed services. This can result in slowdowns and added latency during heavy use periods or, in the worst case, cause outages and data leaks if the servers aren't set up correctly or another tenant breaks something.

• Dependency on provider for support and uptime: While cloud managed services often offer better availability than self-hosted networks, and offer a lot of redundancies to keep services running and accessible, users still have to rely entirely on the provider to keep things working smoothly and fix things when they break. Companies learned this lesson the hard way during the CrowdStrike outage that took down most of the commercial internet in 2024.

• Unexpected costs: While cloud infrastructure can be cheaper for scaling companies with managed growth, it can also lead to eye-watering bills in the event of an unexpected surge of traffic. If this traffic doesn't generate revenue, paying for all that extra elasticity can be painful.

• Over-optimization: Cloud managed services providers may rack up high service charges, optimizing cloud deployment long past the point of diminishing returns. Over-optimization on only a few factors can also lead to inefficiencies like server sprawl or virtualization sprawl. To avoid over-optimization costs, companies need to conduct a sound analysis of the costs and benefits of every improvement in key metrics.

• "Small fish, big pond": Users who aren't venture capital darlings or Fortune 100s will likely sit low on the priority order for cloud managed service providers, and the level of service and support received might reflect that. Subscribers might find it difficult to reach a senior support engineer (or any real person) for assistance and have little bargaining power for negotiating prices, SLAs, and technology choices.

Choosing a cloud managed service

Choosing to migrate to the cloud is a big decision, and determining whether to use a managed provider or self-manage is a big part of it. The choice can be broken down into three main components: 

• Deciding whether a managed cloud is right for an application, 

• Choosing the right delivery model and managed cloud type, and 

• Selecting a managed cloud service provider. 

The first decision can be relatively easy and depends on the specific use case. The latter two are more complex and can involve in-depth business analysis, a request for proposals (RFP) or vetting process, and extensive research.

When to use managed cloud services

Managed cloud services don't always make sense. For example, a company with little need for external access, fixed or low growth rates, or services that can run on old or cheap hardware may find internal infrastructure more affordable. On the other hand, companies with significant in-house engineering resources and specific needs may be better off with a self-managed cloud solution that helps them save on the costs of managed services.

So, when does it make sense to bring in a cloud services management provider? Common cases include:

• Replatforming or migration: Cloud migrations are incredibly big lifts with a lot of moving parts and opportunities for things to go wrong. Enlisting the help of a management provider familiar with the new infrastructure can make the process easier, cheaper, and less prone to disaster.

• Use cases that require extensive resources and distributed functionality: Big data, IoT, edge computing, AI, and other use cases with heavy emphasis on distributed computing can often benefit from the specialized experience and insider knowledge MCSPs provide to get the most out of their architecture.

• High-growth, innovation-focused companies: Start-ups, scale-ups, and other companies that move fast, grow quickly, and focus on features can benefit from cheaper IT by outsourcing their cloud management.

• Compliance-heavy industries: Companies with strict compliance needs can rely on the regulatory expertise of a managed services provider rather than building out internal compliance teams or using expensive outside legal counsel.

How to choose a cloud managed services provider

After deciding to go with a managed cloud, the last choice to make is which MCSP to go with. This process is similar to choosing any service vendor — draft requirements, investigate options, compare capabilities — but has some unique properties that businesses should be aware of.

What is the future of cloud managed services?

Managed cloud services are such an integral part of the modern internet that it's hard to believe they've only existed for a couple of decades. They have become an essential and well-established part of how business operates, and they're still evolving with industry needs and technology changes. The near-future evolution of these services is likely to see some big shifts, especially in:

• AI/ML: Artificial intelligence (AI) and machine learning (ML) have been used in managing technology and infrastructure for decades, but recent developments will likely push things even further. The biggest changes could come in the areas of security, compliance, and optimization.
  
  AI/ML will be integrated with managed cloud services to respond automatically to new threats and anticipate security issues before breaches happen. It's also likely to be more closely tied into compliance monitoring, with many cloud managed services already using it to scan data and ensure sensitive information isn't exposed. For example, Google Docs provides a warning before sharing documents if those documents contain sensitive information.
  
  Finally, expect to see a heavy reliance on AI/ML in optimizing cloud infrastructure and the services they run, shifting resources intelligently to provide maximum performance with minimal costs. These changes will give rise to a new kind of MCSP: the AI manager.

• Multi-cloud orchestration and platform engineering: Companies are increasingly using multiple cloud vendors for different needs, and it's becoming more challenging to get all of these vendors to play nice together.
  
  We expect that in the near future, cloud-agnostic MCSPs with expertise in multi-cloud orchestration will become more prominent and important than legacy providers that specialize in a specific cloud. They are also likely to be integrated into infrastructure decisions much earlier, assisting with the architecture and engineering design of cloud infrastructures from the beginning of the process.

• Sustainability and green IT: As companies focus on reducing carbon footprints and meeting sustainability goals, more cloud managed service providers will focus on environmental wins alongside cost and performance. These new Green IT MCSPs are already becoming more common; soon, they will become the dominant providers of managed services.

The cloud is a big place, and it's better with an expert guide

Cloud infrastructures can be vast, complex, and opaque to end users. Companies planning cloud deployments or migrations often find that the level of choice presented is overwhelming. Getting the right deployment on the right platform with the right options can be too much, even for experienced IT departments — in addition to being a massive engineering time sink. 

Cloud managed services offer a better way forward, providing users with guidance and support and letting them focus on features, not infrastructure. This is especially true for cloud database migrations: the right partner can dramatically reduce the number of clusters and nodes required while keeping data safer and offering lower latencies and higher throughput. 

Read how the Aerospike Cloud Managed Service helped Experian deliver new applications in record time, or get in touch to see how we can help with cloud database design and implementation.