Functional Service Providers: Enabling agile IT Infrastructure through specialized shared services
Defining Functional Service Providers
A functional service provider (FSP) is a company that provides specialized IT infrastructure and applications services to other organizations on a shared or outsourced basis. Rather than each company maintaining their own full IT departments, Functional Service Providers allow organizations to "rent" particular IT functions and services on an as-needed basis. This enables companies to focus on their core competencies while obtaining flexible, scalable access to advanced IT resources.
Functional Service Providers specialize in discrete functions like server management, database administration, cloud services, security management, and more. By concentrating expertise and investments in specific functions, Functional Service Providers can offer these services more efficiently at scale compared to any single customer building these capabilities in-house. Customers only pay for the services they require and can quickly add or drop services as business needs change.
Cost Optimization and Access to Advanced Capabilities
With an Functional Service Providers model, costs shift from fixed capital expenditures to variable operating expenses. Customers avoid large upfront investments in IT infrastructure that sees ongoing maintenance costs even during declines in utilization. Paying an FSP on a subscription or usage basis allows costs to closely track actual business activity levels and needs.
Rather than making do with older, fully depreciated systems, customers gain access to state-of-the-art facilities, software, and expertise of the FSP. Specialists at large Functional Service Providers remain on top of the latest technological advancements, standards, best practices, and security threats relevant to their domain of expertise. FSP customers benefit from these high levels of knowledge and investment without having to build and support such capabilities themselves.
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