When business owners look at IT solutions, the question of cost inevitably arises.
In the case of the managed service market, the marketplace is quickly ballooning, estimated to nearly double in size from $161.37 billion in 2021 to $311.22 in 2027 as more businesses turn to the advantages of managed service providers.
Given the wide range of managed IT services pricing and service models available, it can be challenging to accurately estimate your costs without a managed IT services calculator because managed service pricing can vary with:
- The number of users
- Service time required
- Data storage requirements
- How many servers you need
- How the needs of the business evolve
Though all of your services are detailed in a service level agreement (SLA), you should know what to look for in cost.
Managed IT pricing also depends on factors such as if the agreement is a break/fix model, and focus on device management vs. overall managed IT services—among other factors.
On average, however, managed IT services pricing ranges between $99 to $250 per user, per month.
How Much Do Managed IT Services Cost?
For small to medium-sized businesses, having an in-house IT person may not be the most cost-effective solution. When you choose to work with a Managed Services Provider (MSP), you get the knowledge of an entire team of IT professionals for a set monthly fee. This pricing model is both cost-predictable and budget-friendly—a simple solution for smaller ventures.
When looking at managed IT pricing, there are a few questions you should consider:
- What is my budget?
- What needs to be covered?
- What are the risks if I don’t invest in protecting my data?
Though all businesses should take an active interest in protecting their data, the last point is of additional concern to those working in heavily regulated fields, like healthcare.
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Managed IT Costs: Pricing Per Device vs. Per User
When looking at what you can expect to pay for managed IT services, there are 2 or 3 pricing plans you’ll encounter in your research. Many MSPs offer a flat rate per month, whether that is broken down per user per month, or per device per month.
For high-quality managed IT services, however, you likely won’t find it from a provider that charges an hourly rate. Though the per-hour charge may be lower, the hours of service can rack up, and you might be stuck paying more in the long run—and not even for the services you actually need.
Factors That Impact Managed IT Costs
Though you can benefit from a set monthly fee once you hammer out the details of your service agreement, knowing the factors that influence costs can be helpful. Managed IT costs are influenced by the following factors:
- Service time: A small business has different IT needs than a large enterprise. The time required to solve tasks of varying complexity impacts cost. For example, do you need round-the-clock monitoring? Service time can be billed per hour, as break/fix companies do, or are lumped in with your set monthly fee.
- Number of users: More users mean more devices, and keeping all of them secure comes with its own demands. The price range per user is, again, dictated by the work involved: Do you need to upgrade workstations?
- Number of servers: Just like how many users need coverage impacts the total cost, how many servers need to be managed also impacts the final cost. Many MSPs offer cloud storage as an alternative, too.
- Data storage: Since large amounts of data need more storage capacity, you may find this impacts the total cost of service.
- Equipment upgrades: If you’ve been putting off upgrading computers and other systems, you’ll likely need a number of upgrades. Though this can be costly, upgrading your equipment better protects your data.
With all of these variables, it’s important to understand the ins and outs of your MSP’s service offerings. If there’s a part of your SLA you don’t understand, don’t be afraid to ask questions. Don’t sign on the dotted line until everything has been explained.
What’s Included in Managed IT Services Rates?
Part of understanding your SLA also means understanding what’s covered by your monthly fee. For example, if your business needs a new phone system, that likely won’t be included in your monthly cost. These are typically charged at an additional hourly rate.
On the other hand, some MSPs may offer support from a virtual Chief Information Officer to help leadership establish a well-rounded IT plan. This service may be included in some pricing options, but not others.
It’s important to remember that though MSPs often share the monthly fee pricing model, what services are offered will vary from company to company.
When thinking about your managed IT services ROI calculator, you should also consider:
- Flexibility: Outsourcing your IT needs saves you both money and stress.
- Efficiency: Working with an MSP both improves your operational uptime and employee productivity.
- Security: Your MSP’s got your back: They monitor potential threats and stay up-to-date on the latest news and technology.
Why Does Managed IT Pricing Differ Between MSPs?
Before signing any agreement, you should take a detailed look at different prices from different MSPs, and see what’s included. If the first provider on your list is cheaper than the second, double-check the services they offer. You may find that the first provider offers only a fraction of the services the second does.
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To help guide your decision-making process, you should ask your prospective provider the following questions:
- How long has the company been in business?
- What kind of experience does their technical team have?
- What certifications does the team have?
- Who can provide references?
Lower costs may mean that the MSP relies more on a break/fix model, rather than proactive management. Don’t hesitate to ask your MSP why they charge what they do for services. How they answer will tell you everything you need to know.
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