The managed IT services pricing for small businesses typically runs $110 to $190 per user, per month, based on Teal’s experience as a managed service provider (MSP) for over 25 years. But that cost can surpass that. The exact number depends on your company’s needs, compliance requirements, goals, the makeup of your IT team, and the state of your infrastructure, along with the pricing model your MSP uses. This guide breaks down the things that shape that range, how MSPs structure their pricing, and where break-fix support stops making financial sense.
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MSP Pricing Guide for Small Businesses
Optimizing your IT investment starts here. Explore our MSP pricing guide to understand costs, factors, and models.
Table of Contents
How Break-fix Services Differ from Managed Services
Many small businesses start with the break-fix service model, and that makes sense. Break-fix is when your company receives reactive support, sold as separate hourly occurrences or as subscriptions. This is generally the more cost-effective option for SMBs that have fewer than 10 employees or those that simply have 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.
Break-fix IT support is commonly billed hourly. My recent research puts the typical range around $75-$250 per hour, with emergency and after-hours support often charging over $300/hr. SMBs with frequent IT issues that rely on break-fix services – and have increasing issues – find that it quickly becomes an expensive option.
It’s worth noting that providers operating under this model benefit from working slowly or delivering subpar results because there’s no sense of urgency to resolve your issues.
Unlike the break-fix model, managed IT 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.
How Much Does Managed IT Services Cost Per Month?
Managed IT services cost small businesses an average of $110 to $190 per user, per month, based on Teal’s experience as a managed service provider.
It’s important to note that the per-user, per-month number can climb well past $190 due to things like complex compliance requirements. We’ve seen the high end as high as $400 per user/per month.
The exact figure depends on:
- Device count
- Security and compliance requirements
- Service level agreement length
- Company size
- Business goals
- Complexity of your IT environment
It’s also challenging to give a single average cost of IT support for small businesses because MSP pricing models vary wildly depending on the type of services that are being provided. The amount you invest is unique to your business’s environment.
It’s also challenging to give a single average cost of IT support for small businesses because MSP pricing models vary wildly depending on the type of services that are being provided. The amount you invest is unique to your business’s environment.
A managed service provider’s goal is to give you the IT support you need but would be unable to afford in-house. Gar Whaley, Teal cofounder and CRO, explains how Teal delivers its 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,” Gar said.
“But it wouldn’t make sense for you to hire a help desk person, network engineer, CIO, or a VP of cybersecurity. So, we provide the right size of each of those solutions, and that size depends on the client.”
What Factors Affect the Cost of Managed IT Services?
Your actual managed IT services cost are often based on six factors, including: number of devices, number of locations, security services, length of contract/agreement, remote/on-site staff, backups and storage.
1. Number of Devices
The more devices your MSP has to secure, monitor, and support, the more you’ll pay because your costs will scale directly with your total device count. Furthermore, if there’s any complexity within that count (such as device type, condition, and use case), that can push the number higher still.
This formula can give you a ballpark figure:
Servers + Desktops/Laptops + Tablets/Mobile Devices (connected to network) = Device Count
Cost per device also depends on type and location. A server takes more work to manage than a laptop, and a device at a satellite office often costs more to support than one sitting down the hall from your help desk, which is where the next factor comes in.
The more complex your environment, the more you can expect to spend. With that in mind, the cost of managing each device depends on its location, quantity, and type.
2. Number of Locations
Every office you need managed will increase your costs beyond what your device count alone would suggest.
Each site typically needs its own support, including:
- Network hardware at each site: firewall, switches, wireless access points
- A dedicated internet circuit, and often a backup connection
- On-site dispatch or travel time when a remote fix won’t cut it
- Separate physical security and, in regulated industries, separate compliance requirements per location
Look for an MSP that prices this in as part of your quote, not one that only counts devices and assumes every location behaves like the last one.
Example
Planning to open a new location next year? Make sure your MSP knows the plan before you sign a contract with them. They should walk you through how a new site changes your network setup, your support costs, and your monthly bill, plus the project cost for setting it up.
3. Security Services
Every business needs robust cybersecurity today. If you choose 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, but the savings pale in comparison to the financial impact of cyber threats on your bottom line.
That’s why we recommend investing in a provider with the technical know-how to keep your business 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 an MSP that you trust.
A few of the things you should look for include:
- Responsiveness
- Quality assurance processes
- High levels of customer satisfaction
- Business-aligned technology strategies
- Defense-in-depth cybersecurity
5. Remote & On-site Staff
Your staffing model affects your rate as much as your device count does.
A hybrid workforce with remote employees, branch offices, or field staff costs more to secure and support than a single in-office team. That’s because your provider has to manage VPN or zero-trust access, monitor devices it can’t see in person, and troubleshoot connectivity issues from a distance.
On-site visits add their own line item, too. Most providers bill dispatch calls, hardware installs, and scheduled office walkthroughs separately from your base monthly rate, since a technician on the road isn’t available for remote tickets.
Be sure to ask upfront how many on-site hours, if any, come standard in your agreement and what triggers an extra charge.
Remote employees also add complexity to your network, so if you haven’t moved core systems to the cloud, plan for additional fees tied to that setup.
Leaning on remote-first support (instead of adding in-house IT staff for on-site coverage) is one of the simpler ways to keep your managed IT costs predictable and manageable.
6. Backups & Storage
Backup and storage costs vary more by company size than by data volume alone. A business with about five employees might spend $500 per month, while one with 15-17 employees could easily climb up to around $3,500 per month.
The exact number within that range depends on how many devices generate data, how much of it lives in the cloud versus on-site, and whether disaster recovery is included. But don’t choose a provider based on whichever number here is the lowest because a bargain quote on backup and storage usually means the plan is skipping restore testing, encryption, or monitoring for failed backups.
A ten-person business budgeting $1,500 a month should expect that number to rise, not hold steady, after hiring five more people. Your MSP should walk you through how growth changes that bill before it shows up as a surprise.
How is Managed IT Services Pricing Structured?
Managed service providers structure pricing using three primary models: per-user pricing, per-device pricing, and tiered pricing.
Per-user pricing charges a flat monthly fee for each employee, per-device pricing bills for every managed device, and tiered pricing bundles services into basic, standard, and premium packages.
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.
What's Included in Managed IT Services Pricing?
These are the managed IT services you should have access to so your small or midmarket business can grow faster, run more efficiently, and become more secure.
Be sure to choose 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 deliver the support you need.
How Does Managed IT Support Reduce Costs?
Fully outsourcing your 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.
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 training
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.
