How to Price Managed IT Services

managed it services pricing

If you’re considering managed IT services, it’s important to understand the different pricing models available on the market. Managed IT services pricing differ based on your company’s size, location, and specific type of service or product offering. Overall, you should consider a flexible MSP pricing model that suits your budget and business priorities.  In this guide, we’ll outline managed IT services rates as well as the ROI calculator.

Managed IT Services Pricing Types

There are three common managed IT services pricing models:

  • Flat rate pricing model
  • Per-user pricing model
  • Per-device pricing model

Below, we outline these models to help you understand what will work best for your company.

1. Flat-Rate (Per-Month, Quarter or Year)

This option provides coverage for all IT services as opposed to individual projects or tasks. It’s the most expensive MSP pricing model that is becoming popular and valuable for small and medium-sized businesses (SMBs). With this model, your MSP essentially becomes your outsourced IT department. If something breaks down, for instance, your server, your MSP will help based on the service level agreement. But if it’s a major breakdown that will take several hours to fix, your MSP will charge an hourly rate based on the expertise of the technician.

A flat fee pricing model could be the most expensive option but it allows you to have a more predictable IT budget. Whether you trim or add devices or users, your pricing remains the same.

2. Per User Per Month MSP Pricing Model

As a business owner with employees who use multiple devices, paying per user can be a great advantage. It’s a simple pricing model that makes service-level agreements (SLAs) easy to interpret. Your monthly price will vary depending on the number of users you have. Prices generally vary per user per month.

Your monthly costs will obviously vary based on the number of users you’re covering. Per user per month is the most common model, but for some devices (e.g., server), per user doesn’t make sense. However, for services like help desk, per user pricing model makes a lot of sense as one user can have multiple devices.

3. Per Device Per Month Pricing Model

This managed IT service pricing model charges businesses per device. There will be a flat fee for each type of device that is supported in a user environment. On average there are prices per device:

  • per desktop
  • per server
  • per firewall
  • per switch

This model simplifies the user pricing structure for your different service levels and makes it easier to provide potential clients with a managed IT services price list.

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Managed IT Pricing Tiers

A tier-based approach allows MSPs to structure tiers of service that gives businesses the best option based on their individual needs. At this point, you should note that the cheapest tier may not adequately cover your needs or future growth requirements. Higher tiers may include on-site visits, a specific number of monthly ticket requests, emergencies, and after-hours tech support.

1. A La Carte

A La Carte pricing models allow you to tailor the exact service you need and have granular control of your IT budget. You can avoid bundling services or paying for things you don’t really need. For example, if your internal IT team can handle desktop and email support, you can engage an MSP to help with quarterly patching of all your servers and 24/7 monitoring.

You don’t want to stay up all night or incur huge costs in overtime payments. Moreover, you can free up your time to carry out your core duties or monitor your system during non-peak hours.

The A La Carte pricing model is a great option if you need desktop support for multiple end-users and you don’t have the capacity to do it in-house. For example, installing antivirus patches for more than 400 desktop users can be an overwhelming task to do in-house.

2. Partially Managed Services

This option allows you to offload some tasks like server management and helpdesk support to MSPs and handle break fix and desktop support internally. It’s an effective way to prioritize your internal IT team’s time and make sure they’re concentrating on projects that generate revenue.

Let your MSP handle non-revenue generating tasks at a fraction of the price it would cost to do it in-house. In other words, you can smart-source a portion of your IT needs to an MSP to manage costs and create a more predictable managed IT services cost model.

3. Fully Managed IT Services

The alternative option is to let the MSP handle your entire IT stack. This is a great option for a business with limited time/resources to focus on IT. Your MSP will handle everything from break fix to help desk, maintenance, cloud configuration & maintenance, etc. With a single point of contact (SPOC), your concerns and inquiries are adequately addressed at fair managed IT services rates.

Although it is the most expensive tier, it is quite cost-effective at an enterprise level. Instead of investing in costly tools and technologies, you can leverage the high-tech IT infrastructure that the MSP has already put in place. Your MSP also serves as an extension of your IT team. If you already have cloud assets, the MSP will monitor things like consumption, back-up data, and server loads.

4. Managed IT Services ROI Calculator

Choosing to outsource your IT services is a huge decision. You must strive to know whether the decision will result in a positive ROI. So, how much does managed IT services cost? Before you use the managed IT services calculator to determine your ROI, it’s crucial to understand the baseline figure for all your IT processes. Some considerations to make include:

  • How many service tickets do you receive each month?
  • What is the average turnaround time for each ticket?
  • What’s your average rate of resolution?
  • Are the tickets severe in nature or can your team fix them quickly?
  • How much time does your IT team spend fixing internal IT issues?

Once you’ve determined the baseline figure, you can evaluate the efficacy of managed IT service providers. Take a month or two to get a full picture of your ROI. Generally, SMEs have reported positive ROI on managed IT services. According to a CompTIA survey:

  • 50% of companies saved 1-24% in IT costs per year through managed services
  • 33% saved 25-49% in IT costs
  • 13% saved more than 50% in IT costs

You can use a managed IT services pricing calculator to determine your estimated ROI. The bigger part of the saving on managed IT costs comes from the economies of scale in MSP tools and technologies.

Instead of spending on expensive IT tools and having a big team of IT staff, you can cut down on internal tools and move internal IT staff to revenue-generating functions.

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2019-11-12T17:05:13+00:00