Questions about managed IT services pricing are among the most frequently discussed topics by business owners, especially small to medium-sized businesses (as they are ideal clientele for managed services).
And yet, “what does managed IT services cost?” can be one of the hardest questions for which to find an answer. Technology budgeting is required for most businesses, so why are managed IT services rates so tough to nail down?
Well, the answer is – it depends. However, that doesn’t mean you can’t get a good idea of what you should expect when it comes to managed IT costs, as the price range tends to be somewhere between $99 per month to $250 per user, per month.
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Let’s break down some of the different elements involved in managed IT services pricing so that you can get a better understanding of what to expect.
How to Price IT Managed Services – Charging Per User vs Per Device
The first thing to understand about managed IT pricing is there are 2-3 common managed services pricing models that you’re likely to see, depending on the provider. Although they are fairly straightforward, defining and exploring these models can help you to understand the baseline pricing model your business would need.
Typically, the charge is a flat fee per month price, whether per-user per month or per-device per month.
For quality managed IT, however, you won’t usually find a managed IT services hourly rate. And you may want to consider walking away from any IT provider that does not provide a flat fee rate, even if the per-hour rate is low. You will undoubtedly pay more in the end and likely receive less than adequate services.
Per-user is what it sounds like – based on the number of users you have. This can be based on active employee email addresses or a list of active employees within the domain controller. Per device, as it sounds, is dependent on how many devices are connected to the network. Sometimes the pricing can be based on a combination of these two factors.
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Make sure to communicate your organization’s situation to your potential managed services provider (MSP). For example, a manufacturer may have 50 machines but 100 people using them. In this case, you will want to explain this so the vendor understands your use case and can factor this into your monthly fee accordingly.
They may decide to charge you per device in this particular situation, rather than per-user, given that it is a more unique setup.
How the IT Services Provided Affect Managed IT Services Pricing
This likely comes as no surprise to any business owner, but depending on what service levels you are receiving, managed services costs can be drastically higher or lower.
For example, are you utilizing the MSP’s remote support help desk? Are you leveraging them for monitoring only? Do you have additional cybersecurity services baked into the contract? Individualized services, such as disaster recovery or the frequency of on-site support, will affect your price.
Each vendor you are assessing as your potential MSP partner should provide you with a checklist or a managed IT services calculator that outlines what would and would not be included in your potential service package(s), along with the costs of each. This way, you can understand what you are receiving, and ensure it meets your expectations.
Managed IT Service Rates—What’s Included?
Understanding what is and is not included is an important part of doing your due diligence when assessing the cost of an MSP.
For example, additional IT projects, such as setting up a new phone system, are typically not included in your monthly fee. These are an additional, typically hourly rate, the cost to your organization.
However, other costs, such as a virtual Chief Information Officer that assists the leadership team with IT strategy, may be included in some MSPs pricing but not others. It’s important that you do not compare “apples to oranges” and expect them to be the same price. It’s highly likely that every MSP’s managed IT offering is different.
As with any other element of choosing an MSP, communication is key. As you move further along in the process, the Service Level Agreement can indicate the level of service you can expect, which also plays into managed IT services pricing. Another example that may affect pricing – is a site visit by an engineer included? If so, is there an hourly limit?
It should be noted that managed services may seem more expensive on the surface, but you often receive additional services you wouldn’t have with internal IT. A good example of this is the depth of expertise and the number of diverse certifications on the team. Your potential MSP should explain how they provide value that outweighs the cost, which is an important consideration when leveraging a managed service provider.
Why Does Managed IT Services Pricing Differ Among MSPs?
The variety of services offered affects managed IT services costs from company to company.
Examine the pros and cons of the potential service you are provided versus the cost of service. However, make sure that when assessing potential vendors, you are comparing apples to apples, or as close as possible. If provider A seems less expensive, but includes fewer services than provider B, then comparing them solely on cost does not make sense.
As we’ve discussed in a previous article, The Price You Pay for Poor Service Quality, not all MSPs are created equal. This is another area of assessment for your organization when choosing an MSP.
Ask the provider how long they have been around, what kind of experience their technical team has and for references. You may find once you have this information that an MSP was less expensive; however, it doesn’t seem to be as good of an option as it did previously.
Oftentimes a lower cost means less experience or less bandwidth, or they may rely on a break-fix model instead of proactive management. You can even simply ask the potential vendors – why do you charge less or more than your competitors? Regardless of where you land, this helps you make an informed assessment of different MSP prices.
So, How Much Do Managed IT Services Cost? It Depends…
Although it can be frustrating to hear “it depends” when asking about managed IT services pricing, it is important to understand that the cost of leveraging an MSP is influenced by many moving parts.
Understanding these elements helps you understand what the cost might look like for your organization as you explore potential managed services partners.
To get a quote for managed IT services for your business, talk to us today.
