Managed IT services pricing depends on your company’s needs, goals, the makeup of your IT team, and the state of your infrastructure. It will also depend on the costs determined by each managed services provider (MSP).
By the end of this MSP pricing guide, you’ll know:
- How managed services differ from the break-fix model.
- What your small business can expect to spend on managed IT services.
- Common pricing models.
- And more!
In a hurry? Download the MSP pricing guide to take these insights with you.
Optimizing your IT investment starts here. Explore our MSP pricing guide to understand costs, factors, and models. Â
Table of Contents
How Break-fix Services Differ from Managed Services
Many small businesses start with the break-fix service model. With break-fix services, your company receives reactive support. These providers sell their services as separate, hourly occurrences or as subscriptions. So, this may be a cost-effective option for SMBs that have less than 10 employees or occasional IT needs.
However, it’s important to note that you may be losing money in the long run. According to SolarWinds’ Orange Matter, the average cost of downtime for small businesses is $427 per minute. That equates to $25,620 per hour. So, every minute you’re trying to reactively solve an IT issue, it’s costing you.Â
Break-fix services tend to be a one-time cost – usually ranging from $120 to $300 per hour. The services you receive are generally subject to the availability of the provider. SMBs that have frequent IT issues and use break-fix services, find that it quickly becomes an expensive option.
It’s worth noting that businesses that operate under this model benefit from working slowly or delivering subpar results. That means there’s no sense of urgency to get your issues resolved.
Unlike the break-fix model, managed service providers benefit from resolving your issues quickly and effectively. Because MSPs are proactive, you can expect to save money on your IT investment over time.
Average Cost of Managed IT Services
It’s challenging to give you an average cost of IT support for small businesses. Why? Because MSP pricing models vary depending on the services provided. The amount you will invest is unique to your business’s environment. Â
Your small business’ IT support costs are dependent on many factors, including:
- System complexityÂ
- Company sizeÂ
- Specific needs and goalsÂ
However, our experience in the industry says the average MSP cost per user is between $110 to $400 every month.
The managed service provider’s goal is to provide you with the IT support you need but would be unable to afford in-house. Gar Whaley, Teal Cofounder and CRO, explains how we deliver our managed IT services.
“What we’re trying to do is bring that enterprise IT department to the small and medium-sized business because you need all the same services and solutions,” explained Gar.
“But it wouldn’t make sense for you to hire a help desk person, network engineer, CIO, a VP of cybersecurity. So, we provide the right size of each of those solutions, and that size depends on the client.”Â
Optimizing your IT investment starts here. Explore our MSP pricing guide to understand costs, factors, and models. Â
6 Factors Impacting Managed IT Services Cost
The actual cost for your company will be based on a variety of factors, including:
1. Number of Devices
The more complex your environment is the more you can expect to spend. With that in mind, the cost of each managed device depends on the location, number, and type of device you need to have managed.
2. Number of Locations
The more your business grows and the more users or devices it uses, the higher your management costs will be. You can estimate your costs by determining the total number of devices that will require management by an MSP.
This formula can offer you a ballpark figure:
Office locations + Servers + Desktops/Laptops + Tablets/Mobile Devices (connected to network) = Device Count
Look for a reliable MSP that not only manages your technology but also aligns it with your business goals.
Example
Planning to expand in the coming year? Make sure your MSP knows your plan. They should help you strategize for growth and provide a clear picture of how costs may rise.
3. Security Services
In today’s landscape, every business needs robust cybersecurity. If you partner with an MSP that doesn’t have the expertise or technology to secure your environment, your business is at risk.
We understand the appeal of lower costs. Unfortunately, the cost pales in comparison to the financial impact of cyber threats on your business’s bottom line.
That’s why we recommend you invest in a provider that has the technical know-how. They will help your business stay productive and secure. The cost of cybersecurity services will vary, but reducing your risk is priceless.
4. Length of Service Level Agreement (SLA)
An SLA outlines the services you’re receiving from the provider for your investment. It will include your managed devices and agreed-upon contract duration.
Some providers offer reductions in pricing if you commit to a longer contract. This could potentially save your organization thousands of dollars. If you choose to enter a long contract (incentive or not), make sure you choose a reputable MSP.
A few of the things you should look for include:
5. Remote & On-site Staff
Remote employees also add complexity to your network. If you haven’t moved to the cloud, anticipate additional fees related to your setup.
6. Backups & Storage
It might surprise you that your data can be a factor in managed service pricing. But the more data that needs to be managed, the more technology and support hours are needed.
Because of how complex data can get, the cost range can vary wildly – from $500/month to $3.5K/month. Don’t be swayed by cheaper pricing, though. These lower costs likely won’t include critical features, like:
- Maintenance
- Advanced security
- Regular backups
Managed Service Provider Pricing Models
1. Per-user Pricing
One of the more popular pricing models, per-user pricing allows MSPs to charge clients a flat fee based on the number of users. If you have employees who use multiple devices, this model will benefit your company.
2. Per-device Pricing
Per-device pricing charges a monthly fee for each managed device. This model may be impacted by mobile devices on your company network or a Bring Your Own Device (BYOD) policy.
3. Tiered Pricing
Tiered pricing depends on the tier of service selected by the client. Examples of service packages could range from basic to premium. Clients can generally choose to upgrade or downgrade, as needed.
Key Service Offerings in Managed IT Pricing
These are the managed IT services your small to medium-sized business likely needs to help you grow faster, run more efficiently, and become more secure.
Be sure to partner with an MSP that can deliver all these services. Even if you don’t need them right now, you might soon. You don’t want to hold your organization back from maturing because you’re stuck in a contract with a provider who can’t provide them.
Proactive Support Services Leads to Cost Savings
Fully outsourcing IT to a managed service provider leads to even more cost savings for your small business. Because workloads and business needs fluctuate, it can be challenging to manage an internal IT department.Â
By partnering with an external IT service provider, you can avoid the costs associated with recruiting IT professionals, including:
- Salaries
- Benefit packages
- Office space
- Equipment
- Ongoing trainingÂ
Plus, MSPs give your business scalability and flexibility it wouldn’t otherwise have. Outsourcing allows you to easily adjust the level of support based on your requirements. This helps you save money on costs related to hiring or downsizing your team during peak or slow periods.
Have an IT Team with Skill Gaps?
Co-managed IT services allow you to supplement your in-house IT team with the expertise/assistance they need.
For example, let’s say your team has a cybersecurity skill gap. If you partner with an MSP, you can close that gap and avoid the additional costs it would take to manage it in-house.
Plus, this option costs less than fully managed IT services. It’s a win-win option for you and your team.
Learn more about how co-managed services reduce costs.
Get the IT Support You Deserve Today
Teal offers affordable, responsive and secure managed IT services to US-based SMBs, including local MSP services provided in:
Established in 2000, we enrich lives by delivering ultra-responsive services, prioritizing integrated cybersecurity, and investing in our staff.
Discover how we fulfill our promises to clients with Net Promoter Surveys and our unique quality assurance processes.Â
