Managed IT Service prices can vary greatly and depend on factors such as the complexity of your IT environment, the number of users, and each service provider’s approach to IT management. Sadly, there are no standards for how Managed Service Providers (MSPs) package and price their services. Complicating the situation, most MSPs are reluctant to publicly discuss their pricing, making it difficult for prospective clients to compare vendors objectively.
Selecting your Managed Service Provider (MSP) is an important decision. That’s why we created this guide to walk you through the different factors that affect Managed IT Service costs and equip you to make meaningful comparisons between vendors.
What Are Managed IT Services?
Before discussing the cost, we should define what we mean by “Managed IT Services.” It is an umbrella term that describes a relationship where tasks are outsourced to experts to reduce costs, improve service quality, or free internal resources to do work specific to your business. A company that provides these service offerings is a Managed Service Provider (MSP) – they “manage” some or all of your IT for you.
In the past, MSPs often delivered these services under a combination of business models such as “time and material,” “block time,” and “preventative maintenance” service plans. Customers were asked to pick and choose individual services such as backup, antivirus, password managers, etc. These piecemeal approaches often lead to management gaps and higher business risk. They are no longer adequate for the needs of today’s technology-reliant organizations.
Today, in organizations where IT is strategically essential, when leaders such as yourself shop for Managed IT Services, they are looking for an “all-inclusive” service model. One that integrates and delivers all the essential elements of a high-performing, secure, reliable IT environment. Under the “All-Inclusive” model, your MSP functions as your IT department, handling ALL IT management and support for a flat monthly fee.
Related Blog: Selecting an IT Security Partner: Key Questions to Consider Before Making a Decision
Pricing All-Inclusive Managed IT Services
As mentioned earlier, because MSPs are free to choose what they include in their “all-inclusive” services, you will encounter a WIDE range of prices. Honestly, it is often challenging for business leaders to make meaningful comparisons.
For instance, one vendor may say their package includes “cyber security.” But what precisely does that mean? For one MSP, it may just mean they include a few essential software tools like antivirus and security awareness training. But for another MSP, it might mean that they include those tools plus ten more AND are also aligning your IT environment to one of the industry standard cybersecurity frameworks. It may not sound like much, but that’s a BIG difference.
Because of this, it is impossible to give a simple, straightforward answer to the question: “How much should an all-inclusive Managed IT service cost?” The answer truly is, “It depends.” But before you walk away in disgust and dismiss this article, let us reiterate – just because the pricing is variable does NOT mean we can’t make it clear and accessible.
The current market price for all-inclusive Managed IT Services ranges from $80 to $450 per user per month.
Related Blog: The Top MSPs in Knoxville, Tennessee
Factors Affecting IT Support Pricing
As mentioned earlier, three primary drivers affect that price: the complexity of your IT environment, your number of users, and the maturity of the MSPs approach to IT management.
Regarding IT complexity, we are talking about factors such as your number of locations, the number of servers, and the volume of data to be protected. Be wary of MSPs who don’t do some sort of analysis to understand your environment as part of their proposal process.
A “user” refers to the employees who use technology to do their job. If you have 30 employees who use an IT device (PC, laptop, tablet, or thin client), you will pay for 30 users. Some MSPs have a sliding scale on their rate per user. As your number of users grows, their rate per user decreases.
Note: Some MSPs’ rates are based on the number of devices, servers, and/or other factors. For comparison purposes, you can convert their pricing to a per-user basis. Just divide their total estimated price by your number of users.
Your technology complexity and the number of users are what they are – that component of your Managed IT Service cost will be the same across MSPs. Where your company ultimately falls on the price spectrum depends mainly on the level of maturity you need from your MSP.
Related Blog: The Top MSPs in Nashville
Lower Maturity MSPs
MSPs can vary significantly regarding their operational maturity. Lower maturity MSPs are mainly reactive in nature and have limited standardized processes. They function as “night watchmen” – they watch your systems closely, and if something goes wrong, they fix it (sometimes for an additional fee).
At this level, “proactive services” are often limited to installing patches. IT security is limited to a firewall, some anti-virus, and maybe some security awareness training for your team. When low-maturity MSPs meet with you, conversations will focus on recent support issues and equipment that needs to be replaced in the future.
If your IT systems are not strategically essential to your operation or IT security isn’t a serious concern, this type of MSP may be a good fit for you. These services are usually priced around $80-150 per user per month.
Higher Maturity MSPs
(Most Popular for Small and Midsize Organizations When IT Matters)
When IT does matter to your operation, it’s mission-critical; you will want a high-maturity MSP. While there is no formal industry designation marking an MSP as higher or lower maturity, you will recognize higher maturity MSPs by their strong organizational structure and process consistency.
Higher maturity matters because IT never ceases to become more complex. For stability and security reasons, thousands of configuration settings must be monitored and maintained, even in a relatively small network. Higher maturity MSPs will have dedicated roles on their team and a process for continuously auditing your environment and aligning it to industry standards and best practices for IT performance, reliability, scalability, etc.
Your IT security will also be objectively measured and aligned to a framework of security best practices. This is HUGE. -- Unless your IT team intentionally aligns to a framework such as the CIS Controls or NIST, you have an elevated risk of a cybersecurity incident. These frameworks force the IT team to consider hundreds of security factors and settings to protect you from the bad guys.
Higher maturity MSPs will also develop, test, and manage not just your backup process but also the incident response plan (in coordination with your insurance provider) to help you restore operations quickly should the worst happen. Lastly, higher maturity MSPs will help you monitor your compliance with insurance and regulatory requirements.
These MSPs have moved beyond a maintenance mindset and will engage you in strategic conversations focusing on business innovation, data-driven decision-making, and risk management.
For just IT management and support, these services are usually priced around $160-225 per user per month, depending on the number of users and the services included.
When coupled with advanced services such as cloud hosting, advanced cybersecurity, compliance management, hardware-as-a-service, and software-as-a-service, prices can range from $250-400 per user per month.
If that sounds like a lot, consider this; no MSP has a monopoly on IT resources. We all pay similar rates for the tools we use and must compete in the labor market for technical talent. So, when you look at an MSPs’ price per seat, it should give you some idea of where they are in terms of their maturity. Lower-priced MSPs tend to have less maturity, less experienced staff and spend less time on truly proactive tasks. Higher-priced providers have more maturity, include more tools, have a more experienced staff, and invest more time in proactive tasks than reactive tasks. You must decide which type of MSP makes the most sense for your organization.
In Summary
If IT is strategically vital (or Mission Critical) to your organization, then IT will cost what it costs. Don’t get hung up too much on the cost you pay the IT vendor, but rather make sure you get the lowest cost of overall ownership. How will that vendor impact your larger costs associated with your risk and staffing? The less problems or risk you have, the lower the impact, the lower the cost (and vice versa). If you go with a lower-priced solution, then in that case, you accept more risk in the future—risk in daily disruptions, lower productivity, greater risk of lost data, cyber events, lost opportunity, etc. Eventually, the bill will come due.
Related Blog: Making the Switch: Navigating the Transition to a New Managed Service Provider Without the Headache
How Much Will YOUR Managed IT Service Cost?
Finally, the big question – how much will YOUR managed IT services cost?
Most IT service providers are afraid to talk about pricing on their websites, and even after you’ve had a conversation with them, it can be challenging to figure out their model.
EpiOn is different. Use this calculator to get a budgetary estimate of our services.
While there may be similarities in the naming convention between providers, there is no standard “part number” for managed IT services agreements.
It’s important to understand that the EXACT services that each IT company offers will be different. Be sure the vendors you’re interviewing are transparent in what you’re ACTUALLY GETTING with their service.
Need help evaluating IT providers? We're happy to help, whether or not you choose to use our services. Give us a call any time at 877-389-3742.
