How Much Does Managed IT Support Cost?
As a managed IT provider we receive a lot of questions about the costs associated with managed IT. Having so many services and solutions can make the pricing seem very confusing and overwhelming. To help make it a little easier to understand how costs are determined we worked with our IT experts to explain how some of those Managed IT costs can vary and the best way to receive the cost structure for your business specifically.
Managed IT costs fluctuate depending on which and how many services the IT company is providing. The price of Managed IT is impacted by the number of users in the network, the number of locations that your business has, and the number of applications that your business utilizes.
Industries that must comply with legalities when it comes to their IT structure may require more support and time from their MSP (Managed Service Provider). This would be an industry such as healthcare, which has strict industry standards that they must comply with, namely Health Insurance Portability and Accountability (HIPAA). These types of industries can tend to be more costly than those that do not have strict IT regulations.
The price model your MSP provides will determine your cost breakdown.
What Are The 6 Price Models For Managed IT?
This pricing model is where the lower maturity MSP (Managed Service Provider) or IT provider charges all their work by the hour. You must keep placing service tickets for the problems that are arising and when that service ticket is received by the MSP, they will come in and fix it. For this reason, the break/fix approach is not as popular anymore. Mature businesses prefer a more proactive approach so that the potential issue is fixed before it can occur.
As an alternative, Time Blocks are often associated with the break/fix model. This is when you purchase a certain number of hours, and once you have used up those hours with your MSP, you must purchase more. An example of this is a client who might pay a discounted rate for 50 hours (about 2 days) of support. Once that 50 hours are used up, you will need to buy another block of 50 hours.
With this method, many of the same challenges associated with the break/fix model still apply. The IT provider simply wants to generate more billable time; therefore, they will not try to fix anything other than the issue at hand. On the other hand, you as the client want to minimize the money spent.
The goals of the IT provider are very different from those of the client. This model was once the only model that existed but as the tech industry has matured, so have their services.
Today many IT providers and higher maturity MSPs have shifted their pricing models to align with those listed below:
MSP services are sometimes calculated on a per-user basis; therefore, more users typically mean a higher cost. The average cost per user monthly typically ranges around $150. This is a simple pricing model in which the number of users determines the price, therefore it can be subject to change.
Clients will not be charged more if users have multiple devices. The per user/month is a simple pricing model which is beneficial for both the MSP and the client, as it is a predictable model.
This is a pricing model which is determined by the number of devices that the client has. All devices have an associated cost to calculate the amount of monthly support. Every server, computer, and often tablet are all added together to produce the final cost. Each device carries its own weighted value based on different variables.
For most MSPs, any major effort to deploy new technology typically requires a separate project. An example of this would include moving a client into a new office, a total network refresh, or helping in the deployment of a new line of Business (LOB) applications. Projects allow for a single price that covers all the client's needs without stacking up unplanned costs.
At Usherwood, we utilize the per user/month model. At the start of our relationship with your organization, we determine the number of users and that price so that we can establish a base. That base price is the minimum monthly expenditure. That can increase as users are added, and even decrease back down to that base price as users are removed.
For example, if we started with a base price of $2,000 and then added users at a cost of $150 per user, we would slowly increase the monthly spend. What if we added two users to jump our pricing up to $2300, but then the following month one of them left? Well in that month the price would be $2150.
However, if two more people left, the price would only drop to that base of $2000. All these details are mapped out upfront in the Agreement and then planned as an expected monthly expense.
We also rely on project pricing to help us budget and plan for network enhancements and changes as the need arises. This need could be generated on the client-side as the desire for newer technologies or features come up, or on the provider side (Usherwood’s side) as the need for security or features appear on the horizon.
The industry landscape and emerging security threats require us to keep our clients educated, and at times make suggestions for things like multi-factor authentication so that we can continue to keep them secure in the face of new threats.
For most managed IT companies any extra projects that come up within the partnership outside of the original contract will be an additional cost. Microsoft 365 is an example of a project that would be on top of the Services. If you’ve decided your business would like to onboard Microsoft 365 your managed service provider will take on the task of implementing.
They will then help you the client understand and choose the appropriate licensing for their organization and then act as administrators so that as licensing needs to change, it can be added or subtracted accordingly. However, this licensing has a cost that is also factored in the monthly spending.
The managed service provider will settle on a standard license and try to keep it as simple as possible while maximizing security and features that are useful. There will always be exceptions, but it keeps things simpler and easier to understand.
IT spend does not have to be a mystery. Planning is the key. Managed providers should use a vCIO (virtual Chief Information Officer) who can help plan expenses and keep the client informed and part of the process. The goal of working with a vCIO is to be part of the client team and be a valuable resource for all things related to IT and technology.
At the end of the day, IT is a requirement, and it carries a cost. Accepting that reality does not mean it has to be confusing. Partnering with an MSP can go a long way towards helping the spend be meaningful and justifying where those dollars go and how they help keep things secure and working efficiently.
With so many factors to consider when it comes to costs, it is important you have a trustworthy Managed IT provider do a full evaluation on your current environment and network infrastructure requirements to get a pricing estimate for your company's solution.
Looking to Get an Estimate on the Cost of Managed IT For Your Business?
The costs associated with Managed IT vary depending on which provider you choose to go with, the services you require, the size of your business, number of users you have. For this reason, the best way to get an estimate on the cost of Managed IT is to reach out to a managed service provider to get an analysis of your current IT infrastructure.
Managed Service Providers can offer a full briefing on your IT and determine how to create a personalized solution for you. They will also provide an estimated cost depending on what you require. If you are looking for a Managed Service Provider consultation, Usherwood Office Technology can assess your situation and give an estimate.
For any questions, click here for a consultation.