The MSP channel glossary

Last updated October 8, 2026

The words an MSP owner will use on the first call without explaining them. Each one says what it means, then why it matters to you. Read it end to end once, then come back before calls until none of it is new.

How the MSP makes money

MSPManaged service provider: A company that runs IT for other businesses for a fixed monthly fee, usually per user or per device.Why it matters: Your buyer resells or bundles what you sell. Their client pays them, not you.
MRRMonthly recurring revenue: The monthly total of the MSP's managed services agreements.Why it matters: The number the owner manages to and the business is valued on. Say how you grow it or protect it.
AISPAll-in seat price: MRR divided by the seats (users) the MSP supports. A TruMethods measure.Why it matters: Owners judge your cost as a slice of this number. Two dollars on a $150 seat is a different conversation from two dollars on a $90 seat.
COGSCost of goods sold: What the MSP pays to deliver the service: tools, licenses and tech labor.Why it matters: Every tool you sell lands here, against a price the MSP has already fixed with its clients.
Gross margin: Revenue minus COGS, as a percentage. Healthy managed services margin runs in the mid 40s.Why it matters: Your product either protects it, through tech hours saved or something billable, or eats it.
EBITDA: Earnings before interest, taxes, depreciation and amortization. The profit figure an MSP's sale price is a multiple of.Why it matters: PE-backed and growth-minded owners think in EBITDA. A tool that cuts COGS raises what the business is worth.
AYCEAll you can eat: A flat monthly fee covering unlimited support and the standard stack.Why it matters: Under AYCE every support hour is a cost to the MSP, so tools that cut tickets are worth real money.
T&M and block hoursTime and materials: Billing by the hour, or prepaid banks of hours. The break-fix model most MSPs moved away from.Why it matters: An MSP still billing this way earns from problems, not from preventing them. Pitch accordingly.
RHEMReactive hours per endpoint per month: How much unplanned support time each device generates. A TruMethods measure.Why it matters: If your product lowers it, say so in these words with a number.
Utilization: The share of a tech's paid hours spent on billable or agreement work.Why it matters: Over 80 percent means the team is stretched. That is why owners say they have no time for another tool.
Co-managed IT: The MSP works alongside a client's own internal IT staff instead of replacing them.Why it matters: Two sets of users touch your product: the MSP's techs and the client's IT team.
OMLOperational maturity level: Service Leadership's 1 to 5 scale of how well an MSP runs.Why it matters: Higher-OML shops have processes your product must fit into. Lower-OML shops need more hand-holding.
VARValue-added reseller: A company that earns mostly from margin on the products it resells, not from recurring services.Why it matters: A VAR thinks per deal, an MSP thinks per seat per month. Do not sell to one like the other.
PE platformPrivate equity platform or roll-up: A group of MSPs bought by a private equity firm and run as one company.Why it matters: Central procurement, a vendor manager, SOC 2 requests and redlines. Run a more formal process for them, and only for them.

The tools they run on

PSAProfessional services automation: The system that runs tickets, time, agreements and billing. ConnectWise PSA, Autotask, HaloPSA, Syncro.Why it matters: The MSP's operating system. Your product should write tickets and billable quantities into it.
RMMRemote monitoring and management: The tool that monitors, patches and runs scripts on every endpoint the MSP manages. NinjaOne, Datto RMM, N-central, Kaseya VSA.Why it matters: The first technical question is often whether your agent deploys through it.
Endpoint: A device the MSP manages: a laptop, desktop, server or phone.Why it matters: Many tools are priced per endpoint, and owners will multiply your price by their count on the call.
Seat: A user the MSP supports, usually the unit its own clients are billed by.Why it matters: Know whether you price per seat or per endpoint, and how that maps to how they bill.
Multi-tenant: One console that manages many separate client environments, with one login.Why it matters: A single-tenant tool means a separate login per client. To an MSP that is a dealbreaker.
Single pane of glass: One screen that shows every client and tool together.Why it matters: The phrase means fewer consoles. Do not claim it unless it is true.
Documentation platform: Where the MSP keeps passwords, configurations and procedures. IT Glue and Hudu.Why it matters: Integrating with it saves techs time, and owners notice that.
NOCNetwork operations center: The team, often outsourced, that watches alerts around the clock.Why it matters: If your alerts go to the NOC, they must be clear enough for someone who does not know your product.
CSPCloud Solution Provider: Microsoft's program for MSPs to resell and bill Microsoft 365 and Azure.Why it matters: The way most MSPs buy Microsoft, and the reference point for how they expect to buy software.
NCENew Commerce Experience: Microsoft's licensing terms: an annual subscription can be cancelled or reduced only within 7 days of purchase or renewal, and monthly terms cost more.Why it matters: Owners compare your flexibility to this. Being looser than Microsoft is a selling point.

Security and compliance

EDREndpoint detection and response: Software on each device that detects and stops threats.Why it matters: A tool, not a team. Do not confuse it with MDR.
MDRManaged detection and response: A human team watching and responding to threats 24/7, on top of the software. Huntress, Blackpoint and others.Why it matters: Most MSPs have no security staff on at 3am. MDR is how they cover it.
XDRExtended detection and response: Detection that correlates endpoint, identity, email and network signals together.Why it matters: Often a marketing term. Ask what it actually connects before you use it.
SOCSecurity operations center: The team that monitors and responds to security events.Why it matters: Many MSPs rent one rather than build one.
SOC 2: An independent audit report on how a vendor protects customer data.Why it matters: MSPs ask for yours because their clients and insurers ask them about every vendor that touches client systems.
SATSecurity awareness training: Phishing simulations and training for the client's staff.Why it matters: Usually a cyber insurance requirement and an easy add-on to a security bundle.
BCDR, RPO and RTOBackup, continuity and disaster recovery: RPO is how much data a client can afford to lose. RTO is how long they can afford to be down.Why it matters: Speak in these numbers if you sell anything near backup.
Cyber insurance checklist: The controls insurers require before they will cover a business: MFA, EDR, backups, awareness training and more.Why it matters: The most common way MSPs get reluctant clients to pay for security. Map your product to it.
CMMCCybersecurity Maturity Model Certification: The US Department of Defense security standard for its supply chain.Why it matters: Defense contractors need it, and MSPs sell the ongoing compliance work as recurring revenue.
NIST CSF and CIS Controls: The common frameworks MSPs map client security programs to.Why it matters: If you can show which controls your product covers, you hand the MSP a sales tool.

Buying, terms and the channel

Deal registration: A partner records an opportunity so no other partner, and not your direct team, can undercut them on it.Why it matters: Breaking it gets discussed in peer groups. Honor it every time.
Channel conflict: A vendor selling directly to a partner's client, or one partner undercutting another.Why it matters: The fastest way to lose an MSP and every MSP they talk to.
NFRNot for resale: A free or low-cost license for the MSP's own internal use.Why it matters: Owners trial your product on themselves first. A stingy NFR policy is a common complaint.
MDFMarket development funds: Money a vendor gives partners for co-marketing.Why it matters: Useful for helping an MSP sell you to its own clients.
Billing in arrears: Billing each month for the seats actually active last month, so the count can go down as well as up.Why it matters: What owners want, because their clients shrink as well as grow. Committed minimums are resented.
Auto-renewal: A contract that renews itself, sometimes for a longer term, unless cancelled by a deadline.Why it matters: Many owners have been burned by this. State your renewal and cancellation terms before they ask.
Distributor: A marketplace where MSPs consolidate buying and billing. Pax8, TD SYNNEX, Ingram Micro.Why it matters: Being available there makes you easier to buy.
MSA and SLAMaster services agreement and service level agreement: The MSA is the master contract. The SLA inside it sets response and resolution times.Why it matters: Your SLA to the MSP has to support the SLA they have promised their clients.
Sell-through: The MSP reselling your product to its own clients, after it has bought from you.Why it matters: The deal starts at deployment. Packaging help, QBR material and joint calls drive it.
Peer group: Owners who meet regularly, share financials and compare vendors. IT Nation Evolve, TruMethods, Taylor Business Group.Why it matters: One bad experience with you gets discussed by a dozen MSPs at once. So does a good one.

Who you talk to

Owner: At most MSPs under about 50 people, the person who signs, and often still sells and touches the tech.Why it matters: Can say yes on the first call. Talk margin, risk and time, not features.
Service manager: Runs the service desk: ticket flow, utilization and the techs.Why it matters: Decides whether your product gets adopted, and so whether it renews.
vCIOVirtual chief information officer: The MSP's strategic advisor to clients, who plans their technology and runs business reviews.Why it matters: Often decides whether your product is recommended to clients.
TAMTechnical alignment manager: In TruMethods shops, the person who checks client environments against the MSP's standards.Why it matters: If your product helps them prove alignment, say so.
QBRQuarterly business review: The meeting where the MSP shows a client the value delivered and plans upgrades.Why it matters: Give the MSP a report that looks good in a QBR and you help them sell you.