IT service pricing is somewhere between $75/user and $300/user. It ranges so widely because of the services offered, the MSP's pricing structure, their specialization (or lack of one), and a host of other factors.
Types of Services Provided
The biggest cost determiner is the breadth of services you want to be covered.
Break/Fix
Unlike managed contracts, break/fix agreements have no set monthly cost. So you get to have your cake and eat it too, right? Not exactly.
Break/fix is exactly like how it sounds. When something breaks, a technician comes out to fix it. And you only pay an hourly fee for that time. Fees vary wildly among MSPs, but you can bet it’s at least $100/hour. This means that no proactive maintenance or patching is happening unless you have an inside man. So things are going to break more often.
In addition to the repair cost, you also pay for discovery in these situations. The break/fix tech who shows up walks into your environment blind. They don’t know what systems you use, how your tech is structured, or the most basic passwords. They must identify all these things before they can truly diagnose and fix your issue.
And there’s still no guarantee it won’t be a problem once they step outside your door.
But it’s not all bad. If you have internal IT staff, break/fix may be a good option. Because your team is handling the proactive maintenance and long-term projects, you can afford to bring in an extra set of hands when things overflow.
Partial Managed IT Services
This is like an a la carte menu. You can pick and choose from a list of services the MSP offers and build your contract based on your needs and goals.
Businesses with an internal team of technicians often choose this route because they can augment their teams’ current activity. That could mean outsourcing project planning and implementation for teams with lower-level technicians. If you have an engineer or specialist on staff, it may make more sense to look at outsourcing just the helpdesk piece to keep your internal team focused on larger projects.
Partial Managed IT Services may also include break/fix solutions, access to enterprise applications, or IT consulting and strategizing.
Fully Managed IT Services
Fully managed IT is a comprehensive service that covers all your basic IT needs. While those vary depending on your provider, you can predict they include at least helpdesk troubleshooting, escalations, project support, backups, and disaster recovery, access to enterprise tools, and some form of consulting.
Common IT Service Pricing Structures
The two most common IT service pricing structures are per user and per device. Both pricing structures allow you to limit which people or devices are included or excluded in the agreement.
Per-user pricing is a common practice for outsourcing IT services because it assumes all your employees need access to MSP services. A user is defined as anyone in your business using a PC, Mac, laptop, mobile device, tablet, or any other technology requiring IT support. With how businesses use technology, you can assume most, if not all, of your employees are considered users.
Per-device pricing is another common pricing practice. This structure assumes that the bulk of the work will happen on specific devices, like workstations or servers, rather than with individual people.
What Influences the Monthly Cost of IT Service Agreements?
In addition to the types of services you’re looking for and the pricing structure your potential partners use, several other factors affect the monthly cost of outsourced IT service agreements.
Contract Length
MSPs vary their contract lengths between 12- and 36-month agreements. While your Partial Managed IT Services may be renewed annually, most Fully Managed IT Services require contract lengths of at least two years.
If you’re comfortable with your current MSP and are just looking for a little wiggle room in your budget, consider extending your contract term. But if you’re concerned or uncertain about a potential MSP, negotiate a lower term. Lower terms, however, typically come with a higher bill at the end of the month.
Internal Resources
You may be able to lower your monthly cost if you have a reliable internal resource. When MSPs don’t have to take over responsibility for your entire environment, they may be willing to negotiate the price in your favor.
Any IT department has two main goals: keep the technology running now (daily lifting) and ensure it stays working for the future (heavy lifting). Most technicians are skilled at only one area. They may be good at the customer service side of troubleshooting but lack the strategic thinking skills to create long-term IT plans and budgets. Or vice versa.
If an MSP only has to take on one of those roles, you may have a bit more wiggle room in the price than you might expect.
Complexity of Your Environment
The more complexity you have in your environment, the higher your cost will be. Legacy applications, unusual connectivity needs, older hardware, hybrid cloud environments, or regulatory compliance requirements all create complexity that could affect your monthly IT service costs.
Complexity is difficult to avoid as businesses rely more on technology. But you can manage your complexity cost by ensuring your systems are easy to administer, your technology is updated to currently supported technology, and you limit or remove on-premise legacy applications in your business.
Benefits of Outsourced IT Service Pricing
IT Service Pricing Provides a Low Barrier to Entry.
SMBs aren’t just being attacked; they’re being targeted. Cybersecurity is a real threat for many businesses, but the cost for a cybersecurity specialist is too high. So, MSPs give small businesses access to their team and tools at a feasible cost for a growing business.
While you pay a small monthly rate, MSPs take on the full brunt of the IT expenses. They do the headhunting, hiring, and training for an entire team. They find, purchase, and implement the business and security tools their clients need to stay protected.
IT Service Pricing Means Lower Overhead Costs.
In that same vein, as you continue to grow, MSPs reduce your overhead costs. When you rely on an outsourced team, you don’t have to worry about insurance, training, or other People Ops overhead costs. You can also leverage your MSP buying power for lower monthly fees on subscription services you need to run your business.
IT Service Pricing Offers Better Predictability.
Technology is an investment in your growth. But that doesn’t mean you want to be blindsided by the cost. The first thing your MSP should do, even before you sign on the dotted line, is to map out your goals. They should identify where you are now, your vulnerabilities, and where you want to go. And then give you a plan for when and why you need to take on specific projects and how much they’ll cost. That way, you can budget and plan your fiscal year with an accurate map of your future technology investments.
IT Service Pricing Provides Better Scalability.
Your company doubles in 12 months. Woo! You add new tech to accommodate your growth. Nice! But now your internal team is begging you to hire extra hands because there’s too much work. You could invest even more money into a couple of technicians at a minimum of $30K, plus overhead and training costs. Or you could outsource part or all of your department to an MSP. Your monthly cost grows at the same rate you do. Plus, you get the specialists (note the “s”) that cost upwards of $70K+ apiece.
Now, you get to hire the people who drive your mission without worrying your IT infrastructure will collapse.
What is PKT's IT Service Pricing?
For the average business, our base price for managed IT services is about $100/workstation. However, we build custom pricing for all our clients that look at:
- The number of workstations and servers
- The complexity of the environment
- Licensing needs
- BCDR and backup requirements
- Business and technology goals
Ultimately, you decide the price of your IT service agreement. From the type of service, you want to the number of users or systems you choose to cover and your goals for your business technology.
