How Much Do Managed IT Services Cost? [Answered]

Managed Services November 9, 2018

If you’re at this point, you’ve likely determined that a “team” of one or two “IT folks” isn’t enough to manage your business’ growing — and increasingly complex — IT demands. You need IT help.

But, how much will the services of a managed IT service provider (MSP) cost?

There are major differences in how you’ll budget for an MSP compared to building-out in-house IT staff. Here we outline what you’ll need to account for in order to get an accurate price-figure.

Managing IT Costs

Before moving into how MSP prices are calculated (which you can read below), it’s worth taking a look, if only briefly, at why you’re seeking an MSP in the first place.

Simply, the answer likely revolves around the point that building a competent IT department is a very difficult task, especially for a small or medium-sized business (SMB) such as yours.

In terms of direct costs alone you’d have to maintain payroll for many IT specialists — especially high-salaried cyber security experts (who are in-demand by large and enterprise companies) — and a wide range of fixed, capital expenditure (CAPEX) in IT infrastructure.

Moreover, to maintain IT infrastructure — especially cloud hosting — you’d need to increase your spending on utilities (e.g. electricity for cooling), on-site security, compliance and insurance.

Finally, for many SMBs managing IT alone is a headache. First, cybersecurity issues demand constant attention (and investment). Second, compliance is complicated and in need of review.

Opting to deal with them alone puts SMBs – such as yours – at risk of operational paralysis, where IT security/compliance distract you from focusing on your core business activities.

Why struggle with any of that internally when MSPs have both built that necessary capacity (and experience) and, above all, are willing to provide it to you today?

How Much Do Managed IT Services Cost?

You won’t get an average managed services pricing figure. Simply put, the cost of managed IT services depends on many factors, including:

Company size
The number and device-types in need of managed support
The size of your software asset library
Your networking needs
Your cloud hosting requirements
Your cyber security and IT compliance obligations
The competency of your staff (not just IT) and the extent of help you need
…and more.

Thus, the final cost figure will vary business-to-business (it’s a case-by-case estimate).

But if there’s a takeaway, it’s the fact that you can consolidate practically every one of your IT needs — no matter how complex — into a predictable, flat-fee price.

This operating expenditure (OPEX) covers everything: IT helpdesk support, guaranteed service levels and availability, IT security coverage and insurance.

For example, at Power Consulting, we package 24/7 IT helpdesk support, device management, remote monitoring, end-user management and more within our managed IT services offering, Power Managed Care (PMC). PMC is priced as a clear OPEX figure.

For SMBs, this is a more affordable route than trying to build a large in-house IT department.

If you need to expand your IT presence or IT capabilities, then speak to your MSP for an expanded service-level agreement (SLA). There’s no need to take the risk on expensive capital expenditure (CAPEX). If you downsize, you can revise your SLA and avoid fixed costs.

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Managed IT Services Pricing Models

Below, we look at the four main pricing models you can expect from MSP proposals:

IT Monitoring

Generally, this is a low-cost option. The MSP takes a relatively hands-off approach to manage your IT by just remotely monitoring specific assets (such as desktops). The bulk of the action — such as resolving problems — falls on your lap.

Charge Per-Device

The price is charged on a per-device basis. Many SMBs have fewer devices than employees, e.g. restaurants and retail. These SMBs don’t need full-service IT support for each employee.

Cost Per-User

This typically includes all of your MSP services but focused into a simple, per-user price. Yes, this will generally cost more than per-device arrangements, but MSPs offering this model are offering end-to-end IT support for each employee as though they are your IT department.

Tiered Pricing

In some cases, MSPs offer different levels or packages of managed IT support. You can select the tier that best fits with your IT needs. Of course, the tiers with more services are higher-cost than those with less, but the important part is that you can choose.

For example, our security as a service (SECaaS) packages are available in three packages: Core, Silver, Gold and Platinum. Each of these is tailored for SMBs, but they offer different levels of monitoring, remediation and stress-testing support.

Value-Based Pricing

This is a comparatively high-cost option, but your MSP will aim to deliver concrete results — e.g. better efficiency, guaranteed uptime and availability, bring extensive IT experience and expertise for compliance, proven commitment to enterprise-grade data security and more.

Understanding Managed Service Provider Pricing Goals

By relying on an MSP, you’re aiming to make your IT a cost-effective expense. But that shouldn’t mean looking for the lowest-cost solution on the market.

Yes, some MSPs offer packages that cost comparatively more compared to others but do pay attention to the commitments high-cost MSPs are willing to accept.

For example, do they offer guaranteed pick-up and ticket resolution rates with their IT helpdesk? Do they invest in enterprise-grade data centres for private cloud hosting and virtualization? Are you getting actionable support for your compliance obligations? Do they offer cyber-insurance?

There’s no point in picking an MSP that, while cheaper, doesn’t solve the IT problems you’ll face down the line, especially on the cyber security and compliance fronts.

Instead, look at the higher-end MSP as an investment that you’ll get returns on later in the form of fast-moving business processes, avoiding non-compliance penalties, etc.

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Next Steps

We at Power Consulting have honed over 20 years of experience providing managed IT support to the leading brands and trailblazing startups in New York’s sharp competitive space.

Use our tried-and-true cyber security assessment services and cyber security consulting to see improved IT results at your company in 3 months of starting and, within one year, the end of unexpected IT disruptions across your entire IT system.

Be it IT security, hardware management, dealing with software licenses or hosting data in the cloud, we’ve got you covered in all fronts.