Pricing for Managed Services: Why Can’t I Get a Straight Answer?

Are you considering external IT support? An MSP, or managed service provider, needs to be on your list of options. An MSP is more than just outsourced IT. Your MSP is a partner who aligns with your business values and works in your best interests to keep your technology running in optimal condition. Partnering with an MSP is an investment in your business. They will work with you now and into the future to ensure that all your technology needs are met. They’ll make sure you stay ahead of the curve to minimize downtime and maximize productivity and profits.

As with any investment, it’s important to know how much it will cost. So why does it seem so difficult to get a straight answer about managed services pricing? Let’s take a look at some common pricing models to help you understand why costs are laid out the way they are.

Pricing per User

Pricing per user is one common way that an MSP might calculate your costs. The per-user model is a good choice for SMBs with a fairly stable employee base because it very easily scales up and down for incoming and outgoing personnel. Pricing per user costs can range anywhere from $75 – $350+ per user per month, and these costs are based on a variety of factors.

The first factor is the complexity of your systems—the more hardware and software that needs to be maintained, the higher the cost. Pricing can also depend on how much the user does; a part-time employee will cost less to support than a full-time employee. You could also have employees who require different levels of technical support, e.g., a legal department and accounts receivable are not likely to use all the same software to perform their job functions. Costs can also vary on the level of oversight and management given to the MSP. Lastly, it’s dependent on the MSP—some MSPs offer more and some less. Their pricing will be reflective of that.

You will have to work closely with your MSP to make sure your user count stays current. That way you’ll avoid overpaying for users that are no longer employed with your business. You’ll also ensure that all of your users have access to the support they need.

Pricing per Device

Pricing per device is another common pricing method for MSPs. This model is great for SMBs that don’t have a lot of equipment or may share equipment between employees. This might be a good choice for you if you have a bare-bones or basic hardware set-up. It’s also scalable up or down if you add or eliminate equipment. Costs per device typically range from $35 – $250+ per device per month; again, this pricing relies on several variables.

The first factor in determining the price per device is the type of device itself. Cell phones, tablets, computers, servers, and peripheral hardware all require differing levels of maintenance. The next factor is what kinds of software and apps are being run on each device, and more complex systems will drive the cost up. Scope of oversight also comes into play when pricing per device. If the MSP is responsible for managing and maintaining both hardware and software, prices will be set accordingly. And again, each MSP is going to set their own pricing based on what services are included—sometimes they won’t even offer a service or feature that you’re wanting (or needing!), so be leery of the budget MSPs for that reason.

As with per-user pricing, you’ll need to make an extra effort to promptly communicate any device changes with your MSP. Otherwise, you could miss out on proactive maintenance and support of new devices added to your network or overpay for devices you no longer have.

Monitoring Only Pricing

If you’re looking for monitoring without any labor or proactive maintenance, an MSP can also provide that service. Some MSPs only offer this service. Monitoring-only services are priced per device, ranging from $2 – $200+ a month. The costs are calculated using similar criteria as full maintenance and management per device costs. Pricing factors in the type of device and the depth and breadth of software each device runs, and whether automated and/or manual patching services are also included.

Flat-Rate Pricing

If per-user or per-device pricing doesn’t work for your business’s needs, some MSPs, like StepUP IT, choose flat-rate pricing by default. This is great for all businesses looking for consistent IT management costs. It doesn’t necessarily matter if you add or remove a few devices or users in any given month, as the pricing is based on overall value. In fact, this is a good pricing model for SMBs with a rapidly evolving employee base or technology needs. Flat-rate monthly pricing can vary between $1,000 – $15,000+ based on the scope and complexity of contracted services.

These prices might come with a bit of sticker shock, but MSPs need to account for:

Additionally, because overhead costs can vary by region and market prices, it can be difficult to estimate total IT expenses without examining all the details. Plus, flat-rate pricing is such a flexible option. It’s tough to set an exact price until all services are decided upon.

How Does MSP Pricing Stack Up Against Other Options?

Since partnering with an MSP is an investment, you don’t want to go in blind. By comparison, if you needed to hire an external IT consultant or a per-call support service, you could be looking at costs ranging from $75 – $350 an hour. If you have a monthly IT budget of $1,000, you’d only be able to bring in a $200/hour per-call service for five hours before your budget dries up. What if you need more than five hours of service? Now you’re in a deficit.

An MSP might also cost you $1,000 a month, but you’ll know exactly what services you’re receiving. Also, you won’t have to worry about going over a set number of hours or calls. There are months when you’ll need more support and months when you’ll need less. So think of an MSP as insurance that you know you’ll use and that you know will be there for you. With managed services and a set price, you never have to worry about your IT budget. Your support spending will be a constant.

Much to Consider

There’s a lot to think about when choosing outsourced IT support for your SMB. Your business is unique, and you deserve the kind of support that best fits your needs now and moving forward. If you want to learn more about MSP pricing models and how to find the best-suited support for your business, get in touch today! Experienced IT professionals are available to answer all your questions.