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Alltek IT Services

Managed Services Pricing (Questions/Answers)

Wondering how to make your business’ IT run better without costing more? One popular option to consider is managed IT services companies.

But how much you should be paying for Managed IT Services?

And on the other hand, do you know what type of services you should be getting for what you’re currently paying?

Managed Services Pricing

Using Managed IT Services to Save You Money

Managed Services Pricing

Let’s start by defining what a managed IT service is and is not. A managed IT service provides you with a range of services. You pay a monthly subscription cost, and in exchange, the service takes care of your IT needs that are covered under those services.


These services can include software updates, managed software-as-a-service options, backup services, website management, and similar possibilities.

Because they are responsible for these IT assets, these assets are carefully managed to provide you with optimum performance, security, and efficiency.


Increase Team Efficiency By Reducing Downtime


Well-run IT systems with technology strategies allow your employees to work at their highest levels of efficiency instead of focusing on computer problems and wasting their time updating systems and being on hold with a help desk.


Wouldn’t you rather have your people focusing on what your company is best at, promoting growth? When there’s a problem with your IT assets under your managed IT service, your employees don’t have to worry about fixing the problem – the managed IT service handles the entire process.


Every week, 140,000 hard drives fail. An estimated 44% of companies believe that an hour of downtime costs them about $10,000.


Instead of having your companies have to stop their work and deal with distractions caused by an IT failure, they can simply continue on another device while the managed IT service takes care of the problem.


Enjoy Peace Of Mind With Better Network And Data Security


Every day, we hear about another company that has had its data exposed through a security breach.


In fact, in the first four months of 2018, over 260 million records containing sensitive data were exposed. You don’t want your company to be the source of the next big data breach, losing your company’s credibility and trustworthiness in the market, do you?


When you work with a managed IT service, their primary focus is making sure that your IT assets are current on all security patches, updates, and anti-virus software, not the rest of the activities that your company undertakes. That allows you to focus on building your business, rather than on whether you’ll be one of the 60% of companies that go out of business within six months of a major data disaster.


Lower Your Company’s Overall IT Costs


Though it seems counterintuitive that hiring out your company’s IT needs would save your business money, it’s actually been proven time and again.


If you don’t hire a professional for your company, thinking it’s an unnecessary expense for a small business, then you’ll have employees wasting time trying to troubleshoot their own computer issues or waiting on hold for help desk personnel.


Even if you do hire a professional to handle your in-house work, how will they spend their time if there isn’t enough work to keep them occupied?


For these reasons, businesses typically find that the expense of a managed IT service is lower than that of trying to manage their own IT assets in-house.


Because the managed service is only focused on the IT costs of your company and is focused on improving their own efficiency, these companies are focused on providing you with the most efficient service possible. They’re able to share the cost of education, new technology, and equipment across a number of clients, reducing the cost.


The Big Problem With Managed IT Services Marketing

Unfortunately, it’s common practice in many industries, including the IT world, to keep from explicitly stating the price until it’s absolutely necessary.


The thinking is that, the more a potential customer learns about the service before knowing the price, the more likely they’ll keep an open mind once they finally do find out what it costs.


It feels like this stems from an antiquated sensibility, which dictates that you should never be too forward about money – but when it comes to finding the right Managed IT Services, you obviously need to know what it will cost you.


Budgeting for your technology can be difficult enough without having to do in-depth research to actually find the price tag.

Managed Services Pricing Calculator

The cost of managed IT services varies depending on the size and complexity of your business network. But don’t worry, we have a pricing calculator that will give you an instant estimate. Just enter some basic information about your company and we’ll do the rest.


If you’re not sure what type of managed IT services you need, our team of experts can help. We’ll work with you to create a plan that fits your budget and meets your business needs. Our services can include:


  • Workstation Cleanups
  • Virus and Malware Removal
  • Desktop Optimization
  • User Management (Add, Remove, Change, rename, etc)
  • Vendor Management
  • Network Reviews and Consultations
  • Business Application Support
  • Expert Microsoft 365 Support
  • Managed Microsoft Updates and Patching
  • Advanced Endpoint Protection (Anti-Virus)
  • Hardware and Software Audits and Inventory
  • Performance & Preventative Maintenance Reports
  • VPN and Remote Access Management
  • Computer and Server Health Reports
  • 24 x 7 Monitoring and Management Tool
  • Remote Support (7 AM – 7 PM)
  • Quarterly Email and Network Security Audits
  • Average Response time of less than an hour

Cost Calculator

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Managed IT Service Price

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This is just an estimate for a free detailed quote and consultation please submit your details below.

This calculator is meant to provide an estimate only. Your final proposal will be based on a complimentary detailed sales quote.

As you can see, working with a well-run managed IT service can save your company time, money, and potential risk.

Are you ready to consider the options that are available to you? We offer a range of services, either in a package form or a la carte, should you only want help with a couple of areas.

Please feel free to reach out today to discover how we can help your business get ahead through solid managed IT service solutions.

FAQ About Managed Services Pricing

How much should the cost of IT Services be?

Despite being one of the most important factors in deciding between one service or another, the price of IT support can often be difficult to nail down. If you’re considering investing in Managed IT Services, you should know how much you need to budget.

When researching a potential service, there’s a lot that you need to know about it. What it includes, how effective other customers have found it to be, how it stacks up against the competition, etc.

But there’s one bit of information that’s often as important, if not more, than the rest.

The price.

How does Managed Services pricing work?

It’s important to understand the model that Managed Services pricing is based on.

The vast majority of Managed Service Providers (MSP) across the country operate on a “per user” or “per device” basis. Therefore, charges are based on the number of users or devices on the network.

The MSP incurs the cost for the agent (a management device that is installed on all devices), anti-virus, any extras, and of course the support for each endpoint. Therefore, this flat number should cover their expenses and provide a level of profit that allows the business to grow.

This is compared to, for example, “Break/Fix” services.

Break/Fix service is the traditional style of outsourced IT services, which works by fixing your computers once they’re broken. In a nutshell, when something goes wrong — data loss, hardware failure, virus, etc. — you then get in touch with your Break/Fix support provider and have them fix it.

Our calculator above can help you get a better estimate!

Are Managed IT Services expensive?

If you’re currently using Break/Fix IT support, or perhaps relying on a tech-savvy employee at your business to fix problems when they happen, then yes, Managed IT Services will definitely be more expensive.


That’s just the cost of doing business – if you want to overcome issues that you’re currently experiencing with a more limited form of IT support, then you’re going to have to invest more, simple as that.

How much do Managed IT Services cost?

Managed Services Pricing

Managed Services Pricing can range from $10 to $250 per user/device per month.


If you think that’s a wide range, you’re correct – the reality is that the level of support included from one end of that range to the other, and therefore, the type of business that those levels of support are designed for, vary greatly.


Does $10/month sound like a good rate? Of course, it does.

Is it the same quality and level of services as those that charge $250/month?


Definitely not.


There are some business owners that happily pay $250 per user a month to eliminate the worry of hardware cost, additional bills, and a long response time, guaranteeing effective service for what could be a multi-location business or an even larger enterprise.


Generally, though, most business owners prefer the $10-$100 per user range. They are okay working with a smaller IT business, additional bills for projects, onsite work, and sometimes even remote support.


Before you make your decision on what you are willing to pay for support, review the types of agreements below. This will help guide your expectations going into a new agreement or help to evaluate the comprehensiveness of your current agreement.

What are the common Managed IT Services agreement types?

T&M
MONITORING
REMOTE
ALL-IN

Price

$75-200 per hour

Price

$10-$30 per user/device/month

Price

$30-$100 per user/device/month

Price

$100-$300 per user/device/month

Pros

  • Simple
  • Easy to adjust to changes
  • Better control over the project

Pros

  • Detect and prevent problems before they happen
  • Usually a very manageable price for any size business

Pros

  • Cheaper than other comprehensive services
  • Support is often quick to respond and resolve issues

Pros

  • Always up to date
  • Budgeting for your technology expenses is simple and straightforward
  • Avoid IT problems altogether instead of fixing them after the fact
  • Access to an entire team of IT

Cons

  • Uncertain timeline
  • Not considered "managed services"
  • Impossible to accurately budget for

Cons

  • Requires an internal IT person/team or someone with enough knowledge to resolve any potential issues
  • Most effective when bundled with other IT support, which can drive up cost and require multiple vendors

Cons

  • More impersonal than other types of support
  • If an issue requires on-site service, you’ll have to find another provider to help

Cons

  • Can be unaffordable for smaller companies
  • Usually requires a contract"

Agreement Details

T&M – Time and Material – $75-200 an hour

The first plan is the old-fashioned time and material. Some MSPs stay away from this plan entirely. One-off projects and ongoing hourly support typically fall under this domain.


In this plan, the IT business gets paid when things break – not unlike Break/Fix. Generally, this isn’t necessarily considered “managed” services.

Monitoring – $10-$30 per user/device per month

A remote monitoring and management tool is the foundation of what is generally considered Managed IT Services.


This allows MSPs to manage computer/server patching, provide alerts for any troublesome areas on the network, and ongoing network optimization.


This typically runs between $10-$30 per user/device per month. Any remote support, onsite support, projects, consulting, hardware, or applications will incur an additional expense. This allows a low barrier to entry but makes budgeting for ongoing IT expenses much harder for businesses with over 5 users.


If you’re looking for a monitoring plan, do not consider any that are quotes outside this range. The cost and time commitment of these agents cannot justify charging outside of this range. Any less than this range and you can guarantee things are not being managed correctly.

Remote Support – $30-$100 per user/device per month

This type of agreement is one of the most common in the MSP community.


It includes everything in the remote support plan, typically a certain level of consulting, and unlimited remote support. Most IT businesses don’t want you to know this, but 90-95% of tickets are completed remotely, so this is a practical option for the price-conscious business owner.


The best way to describe this plan is “a la carte.” Most things are included, but you are left with additional bills for firewalls, backup, Microsoft Office 365/G Suite, projects, and onsite support.


This is a budget-friendly option but be prepared for some variations in your monthly IT expenses.

The “All-in” Model – $100-$300 per user/device per month

Most MSPs offer some variation of this model and come up with some sensational marketing terms for it like “MSP Premium,” “All you can eat,” or “MSPness.”

This model is perfect for a thriving business that likes to have a defined budget for their IT expenses and high expectations of their outsourced team.


This model can contain everything including:

  • Hardware upgrades every 3-4 years
  • Licensing
  • Project Work
  • Remote and Onsite Support
  • Dedicated Technology Consultant
  • Staff Augmentation in some cases
  • Firewalls
  • Business Continuity
  • Applications (Office 365, G Suite, etc.)


Some MSPs will still tack on additional charges for hardware, projects, or applications, but, for the most part, this is a completely comprehensive IT plan.

Budgeting is easy, the response is quick, and downtime is very low. That makes this plan very advantageous, despite the hefty invoice each month.


Which Managed IT Services plan is right for you?

The model that is right for your business is up to you to decide, and it depends heavily on 3 key factors:


Location


Typically big cities house MSPs that charge on the higher end of the spectrum detailed above.


If you are in Tampa, Miami, New York City, or most other major cities, prepare to receive slightly higher quotes for the cost of service. Because after all, you must have your outsourced IT team right next door, right? Not exactly.


Given that 90-95% of tickets are completed remotely, MSPs have been able to expand their geographic range significantly. Therefore, it may behoove you to consider a well-established MSP in a smaller market. Their support and response time will be comparable to a big city but at a better rate.


Business Size


For example, let’s say you are a 50-user business. Anything over 25 users is a sweet spot for most MSPs. Yes, that MSP has a set price per user per month cost, and they will likely refuse to budge or offer a discount.


However, if it’s clear it could cost them your business, you could provide a reasonable adjustment and they will almost certainly relent.


It may only be $5 per user per month, but that will quickly add up over time.


Type of Agreement


As explored above, the agreements and costs vary greatly, but each MSP will have set services in each of their agreements.


For argument’s sake, let’s hold the monthly cost and location static in this example and only focus on the agreement. Let’s say they are pitching you the Remote support plan. It includes everything except onsite support and the extras.

You could, in theory, ask them to include some onsite work for the first month or start with room to negotiate and ask to include 2 hours of support each month in the agreement.


While they may not agree to that specifically, it’s likely that they’ll budge on the agreement to get you onboard. Most MSPs have yearly client retention of around 95%. When a client comes on board, they are typically there to stay. Use that to your advantage.


As mentioned several times, it’s important to keep in mind how greatly all this can vary. That’s why it’s necessary to examine what you’re currently paying for IT services, and how satisfied you are with them.


Look at your own MSP agreement and review the factors that are leading your bill to be higher/lower than expected. If it is too low, it’s likely that you are not happy with the support on the front end and things are absolutely being left undone on the back end. If it is too high, review the factors and advice we’ve explored above.

Ask yourself these questions:


  • Would working with an MSP in a smaller market save you money while providing the same level of support?
  • Could you negotiate the per-user cost down because you are in the MSP sweet spot?
  • What about add-ons to the agreement?


In the end, it’s all about finding the lowest rate you can pay to have all your IT problems solved.


Depending on your business and your location, the cost can vary greatly – but more often than not, there’s going to be a way for you to either save a bit of money and get the same level of support, or invest slightly more and get those pesky IT problems squared away once and for all.