A proper IT staffing strategy can make a big difference for your software development projects. As a business owner, CEO, CFO, or CTO, you should consider the differences between managed IT services vs staff augmentation. While both are forms of outsourcing, they work quite differently.
If you choose a managed services model, the providers become your partners. They fully manage the IT tasks and development roadmaps you have agreed to. With staff augmentation, on the other hand, you invite qualified experts to join your existing teams and have them work directly under your control.
Learn about these two approaches to make the best choice for your needs.
Why Do Businesses Need Managed IT Services?
Many businesses need help to operate efficiently, remain competitive, and deliver customer value through technology in their market. It may be challenging to find professionals or concentrate on business goals while managing IT infrastructure, developing roadmaps, and ensuring reliability, as engineering initiatives can become complex, resource-intensive, and costly. It's worth considering managed services to reduce internal overhead, offering the expertise, tools, and support needed to thrive.
Managed IT services come in various forms, but the core concept remains the same: shifting the responsibility of IT maintenance and development from your company’s internal teams to a service provider. In a well-structured managed services offering, you as a client gain the advantage of predictable costs and service level agreement and can concentrate on your core business priorities while leaving IT management tasks to the experts.
Types of Managed IT Services in IT
| Managed IT Strategy and Consulting Services | Companies choose these services to help their businesses align their technology goals with overall business objectives. Your MSP (Managed Services Provider) can offer IT roadmapping, strategic planning, legacy system assessments, and expert advice on choosing digital transformation solutions for growth in the market and changing approaches to commercial success. |
| Remote Monitoring Services |
The team you hire monitors your company's IT infrastructure and applications to provide seamless performance and detect issues before they harm your business operations. These efforts include monitoring servers, networks, and applications to observe performance metrics and detect security breaches or operational anomalies. The MSP reports regularly, keeps systems running, minimizes downtime, and addresses issues so your IT infrastructure runs smoothly and efficiently. |
| Managed Application Support | From Level 1 (L1) through L2 and L3, your MSP will step in to interact with your internal users and customers who interact with your systems and applications to triage, troubleshoot, and solve ongoing issues in your application portfolio. Such support services can integrate seamlessly with your internal engineering department to take over at any level. |
| Managed Security Services | Security services include protective actions to keep digital assets safe. These services include firewall management, intrusion detection, anti-virus and anti-malware solutions, patching, infrastructure monitoring, and security system audits. |
| Managed Cloud Services |
These services involve administering and optimizing public, private, or hybrid cloud infrastructures. MSPs help businesses with cloud strategy, migration, configuration, and management, ensuring your team uses cloud resources efficiently and securely. MSPs offer expertise in infrastructure as a service (IaaS), managing public cloud solutions in collaboration with major cloud providers such as Amazon Web Services (AWS), Google Cloud, and Microsoft Azure. They may also manage platform-as-a-service (PaaS) solutions or software-as-a-service (SaaS) as well as customer relationship management (CRM). |
| Managed Communication Services with AI Assistants |
AI assistants are transforming business strategies to interact with clients, teams, and stakeholders. They help enhance customer engagement and automate the communication process with clients, offering
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| Project-based Managed Development Services | Outsourcing different IT projects to a service provider helps manage the digital project's planning, implementation, and marketing efforts among businesses. These services are ideal for companies that need expert support for a one-project or short-term basis, such as custom software development, digital transformation of legacy systems, cloud migration, or cybersecurity tasks. The main benefit for any business is finding an outsourcing vendor to get access to specialized expertise without hiring full-time staff. |
| Telecommunication Services | Managed IT service providers are finding ways to differentiate themselves in telecommunication. Some providers offer managed IP telephony services, taking full responsibility for managing and maintaining voice communication systems within a client’s business environment. |
Managed Services Market Revenue
What is Staff Augmentation?
Staff augmentation is a flexible outsourcing strategy where a company temporarily hires an external software development team or efficient talent to fill specific skill gaps or increase project potential. A strong staff augmentation partner typically handles hiring, payroll, and administrative tasks, allowing your business to focus on core operations.
The staffed experts offered by a provider become an extension of the company’s internal IT team, following their rules, workflows, processes, and management. Key options your business gets with this model of cooperation:
- Temporary staffing solution suitable for short-term projects or to address resource gaps;
- You are supervising the augmented staff, process, and day-to-day tasks;
- Cost-effective for specific needs and avoids the overhead of full-time employment while providing access to specialized skills.
Types of Staff Augmentation Services
| Short-Term Augmentation | Temporary staffing for periods under six months, like for a busy season, is often to cover employee absences, handle short-term projects, or manage workload spikes. |
| Long-Term Staff Augmentation | You invite external professionals to integrate into the team for six months or longer. This model suits businesses requiring ongoing support for specialized roles. |
| Dedicated Engineering Teams | Your staff augmentation partner supports you in building up a complete engineering team remotely that is hired and locally taken care of by the partner who seamlessly extends your engineering organization. |
| On-Demand Staff Augmentation | Quickly scaling the workforce to meet immediate needs, often for industries with unpredictable or seasonal demand. |
| Skill-Specific Staff Augmentation | Adding professionals with highly specialized expertise not available in-house, often for emerging or niche technologies: AI, ML, IoT, etc. |
| Project-Based Staff Augmentation | External professionals are hired for a specific project, like digital transformation or cloud migration, collaborating closely with the in-house development team. |
IT Staff Augmentation and Managed Services Market Size, 2023-2032
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NOTE: According to research platform Business Research Insights the IT Staff Augmentation and Managed Services Market size, which was valued at approximately USD 299 billion in 2023, is expected to reach USD 1072 billion by 2032, growing at a compound annual growth rate (CAGR) of about 13.7% from 2023 to 2032. |
Top Industries Using IT Staff Augmentation
IT staff augmentation services are popular, especially across industries that rely on technology to change legacy systems and start the digital transformation, implement innovative technologies like AI or ML to increase customer engagement or analyze vast amounts of data to make decision-making processes more accurate.
Software Development
Software development vendors find clients who require specific expertise for tech projects, engaging staff augmentation talent to address skill gaps, manage fluctuating workloads, and speed up product development. Suppose a company requires skills on a short-term basis with emerging technologies like AI, blockchain, and cybersecurity. Staff augmentation can bridge skill gaps for a project that requires these skills.
Financial Services
Banks, fintech companies, and insurance companies require IT staff augmentation to maintain and enhance secure, reliable cloud systems. Skilled tech experts are critical for handling digital transactions, fraud detection, and regulatory compliance. Financial businesses usually require data analysts, cybersecurity specialists, compliance experts, and blockchain developers.
Healthcare
The modern healthcare industry increasingly relies on innovative IT solutions for electronic health records (EHR), telemedicine, and data analytics. Engaging staff augmentation talent helps develop patient-centered technologies and modernize existing systems.
IT professionals found for staff augmentation can develop and maintain telemedicine platforms, patient portals, and mobile health apps, enhancing the patient experience and accessibility to care.
E-Commerce and Retail
With the boom in online shopping, e-commerce companies depend on IT staff augmentation models to develop platforms, integrate payment systems, develop AI assistants or chatbots to interact with their clients 24/7, and analyze user experiences using data analytics dashboards.
Logistics Companies Use IT Staff Augmentation Model
The logistics industry uses advanced technological solutions to automate workflows, optimize supply chains, improve inventory management efficiency and communication for brokers by automatically validating carriers, negotiate competitive rates, and save time.
Logistics companies also search for solutions to enhance transportation management systems that optimize route planning, shipment tracking, and resource allocation. Augmented teams can integrate TMS with other systems, such as warehouse management systems (WMS) or enterprise resource planning (ERP) tools.
Logistics businesses build systems to process real-time data, enabling proactive decision-making to address delays or disruptions. Staff augmentation helps create mobile applications for drivers to manage routes, communicate with dispatchers, and update shipment statuses.
To handle sensitive data, including customer information and delivery routes, augmented cybersecurity experts can implement systems to protect against breaches and secure communications, as well as backup and recovery solutions to ensure business continuity in case of system failures. There are so many options augmented staff can offer that logistics companies often choose this model of cooperation with.
Education Institutions
Due to the demand for online education, many educational institutions have stopped relying on outdated systems. EdTech platforms incorporate emerging technologies such as artificial intelligence, machine learning, augmented reality, and virtual reality. Skilled professionals provide access to adaptive learning algorithms, gamified content development, mobile learning apps, and learning management systems (LMS) enhancement.
The shift to digital learning led to the development of virtual classrooms, video conferencing, real-time assessments, and personalized learning systems that adapt to individual student needs. By outsourcing tech tasks to the dedicated team, EdTech companies focus on curriculum development and student engagement to provide a high level of education.
Key Differences: Staff Augmentation vs Managed IT Services
Both managed IT services and staff augmentation provide businesses with access to external IT expertise, but they differ significantly in their approach, scope, and responsibilities. Understanding these differences can help your business choose the right solution based on their needs and goals.
| IT Managed Services | Staff Augmentation Services |
| The outsourcing team entrusts IT operations or specific functions to a third-party service provider. | Staffing providers help add specialized talent to existing staff and address resource shortages. |
| The service provider is responsible for managing and delivering the agreed IT services according to SLAs. | The client retains control over the augmented staff's project management and task delegation. |
| Long-term focus on managing IT infrastructure, digital platforms, cybersecurity, cloud, delivery, etc. | Rather, project-based support is often focused on a particular skillset or role. |
| It is ideal for businesses that want to offload responsibility and manage IT complex projects entirely or partially to independent providers. | Offers flexibility to scale the IT workforce up or down based on the in-house staff's project demands or core competencies. |
| Offers packages with different levels of support: basic, intermediate, and advanced packages offer different service levels, allowing them to choose that best fits their needs and budget. | Paid on an hourly, monthly, or project-based basis for external talent or dedicated teams. |
| Focused on long-term partnerships for continuous IT support and improvements. | Typically short-term or project-based, although some augmented teams get longer durations. |
| Operates independently with minimal disruption to the client’s internal operations. | Fully integrated into the client’s team, requiring collaboration with in-house staff. |
Virtido IT Staff Augmentation Services
Virtido is an outsourcing provider offering IT staff augmentation services and managed IT services based in Switzerland and operating across different countries. With over 9 years of experience and 500+ successful remote placements, we offer clients the expertise and flexibility needed to meet their goals efficiently and cost-effectively.
At Virtido, we offer custom software development solutions to match your business needs, whether you’re looking for staff augmentation or a fully outsourced technology partner.
Our services include:
Extra Experts for Your Existing Project
Strengthen your current team by adding specialized talent to meet deadlines and achieve high-quality results. With our IT staff augmentation service, you can integrate experts at any stage of your software development cycle to address specific technical and business needs.
Outsourcing Vendor
If you need a reliable technology partner, our dedicated outsourcing teams can take over your project at any stage, ensuring a seamless transition with minimal disruption. We drive your solution forward while maintaining high-quality standards.
Short-Term Staff Augmentation
Our short-term augmentation model provides rapid access to skilled professionals for urgent staffing needs. Within a week, we can onboard experts to extend your in-house team and help you scale quickly for complex projects.
Long-Term Extended Team
We specialize in building custom long-term teams that follow your project requirements. While you manage the day-to-day tasks, we handle all administrative responsibilities, ensuring smooth integration, direct communication, and consistent collaboration.
Fully Managed Team
We can not only build up your remote team but also run it in your stead if you prefer to entrust the full cycle of delivery to us. Our senior project leadership will be your single point of contact while managing delivery and staffing internally on our side to match your delivery expectations.
Final Insights on the IT Staff Augmentation and Managed Services Market
The IT Staff Augmentation and Managed IT Services market is divided into major regions: Europe, Latin America, Asia Pacific, North America, and Middle East & Africa.
North America will lead the market due to its advanced infrastructure, presence of major IT service providers, and large pool of skilled IT professionals. The region's business tends to adopt the latest technologies and digital transformation, driving the demand for outsourced IT services.
Local government policies and programs support the IT industry, providing North America’s dominance in the software development market. So, North America will continue to be the driving force behind the augmentation of IT staff and managed services.