Managed IT costs vary depending on the pricing structure your provider uses. In most cases, a managed service provider (MSP) will charge a flat monthly fee for their full suite of services. The price can be anywhere from $99 to $500 USD per user per month. The various managed IT pricing structures are the reason why the range is so wide.
“When you use an MSP, expect to pay for good results. That doesn’t mean good service is always expensive, it means that paying for quality and reliability is worth it.” – Duane Maas, Director at MC Services.
While knowing the cost is important, many business owners tend to overfocus on the initial price tag. To understand the true cost of managed IT services, consider how much you will save on your IT expenditures and compare that to the initial price. The result will give you a better idea of how much you pay for your services.
Plus, no matter what your managed IT services price list is, there will always be the benefit of predictable budgeting. 96% of surveyed business owners agree that cost predictability is extremely or very important.
To help you accomplish that, this article will explore various managed IT service pricing structures and their average costs. We will also show you how to predict your partner’s ROI to recognize the long-term value. Please note that the price ranges discussed do not necessarily reflect the cost of partnering with MC Services. You can request a quote for more information.
How Managed IT Service Rates Are Charged
Flat Fee
With a flat fee pricing structure, you pay a consistent, fixed amount for managed IT services each month. This model simplifies budgeting as it covers a comprehensive range of services under one payment, regardless of the volume of support or issues that arise.
Tiered Pricing
Tiered pricing offers multiple service levels, each with its own set of features and support options. You choose a tier that best fits your needs, and pay a rate that reflects the services and support included in that specific tier.
À La Carte
In an à la carte pricing structure, you select and pay for only the specific IT services you need. This model allows for greater customization. You will be charged based on the individual services you choose, rather than a bundled package.
Block Hours
Block hours pricing involves purchasing a set number of service hours upfront. These hours can be used as needed, with the cost reflecting the amount of time IT professionals spend providing support or managing your systems. While this may seem cost-effective at first, these hours can quickly add up.
Need Someone Who Can Solve 50% of Issues Under 4 Hours? |
Per Device
Per device pricing charges you based on the number of devices, such as computers, servers, or mobile devices, you need to manage. The rate is determined by the total count of devices requiring support and management. This structure works if your employees share devices. However, this is becoming rarer. It’s predicted that each person will use 15 devices by 2030.
Per User
Per user pricing charges you based on the number of individuals requiring IT support. Unlike per device pricing, each user is charged a flat rate, which typically covers all the devices they use. This model is more cost-effective for organizations where users have multiple devices.
Hybrid Pricing
Hybrid pricing combines elements from multiple pricing models, such as flat fee, per device, or block hours, to create a custom structure. This approach allows flexibility to match the specific needs of your business while balancing cost and service levels.
| Learn More About How You Could Benefit From Fully Managed IT Services |
How to Predict Your Provider’s ROI
1. Define Your Objectives
Set clear, measurable goals for each service the MSP provides, such as achieving specific uptime targets, meeting response time expectations, or maintaining high levels of user satisfaction. Having specific benchmarks to evaluate the MSP’s performance allows you to quantify the value added.
2. Assess Costs
Calculate the direct costs associated with the MSP. This includes recurring monthly fees, initial setup costs, and any additional charges for services beyond the standard package. Beyond these direct expenses, consider the indirect costs, such as the internal resources required to manage the MSP relationship.
3. Measure Benefits
Evaluate the benefits of the MSP, starting with cost savings. This includes lower in-house IT expenses, reduced hardware and software costs, and less downtime. Then, look at efficiency gains, such as quicker IT issue resolution, better productivity, and more streamlined processes. In general, MSPs provide a 25% cost reduction and 50% efficiency improvement.
4. Calculate ROI
To calculate ROI, subtract the total costs of the MSP from the total benefits you’ve gained, and then divide by the total costs. Multiply the result by 100 to get the ROI as a percentage. If the MSP contract is long-term, consider using Net Present Value (NPV) to factor in the time value of money, which can give you a more accurate picture of the return on your investment over time.
The basic formula for calculating ROI is:
(Net Benefits / Total Costs) × 100%
For NPV, the formula is:
NPV = Total Present Value of Cash Inflows − Initial Investment
Managed IT Services ROI Calculator
To simplify things further, we have included two online managed IT service calculators. One follows the basic ROI formula and the other calculates NPV.
ROI Calculator
NPV Calculator
5. Monitor & Adjust
Regularly check the MSP’s performance against the set goals and adjust your approach to maximize benefits. Keep a feedback loop with key stakeholders to ensure the MSP meets your business’s changing needs. These ongoing reviews help you fine-tune service levels and make informed decisions about the MSP relationship.
| Find a Wisconsin MSP at The Price You Need | ||
| Milwaukee | Pewaukee | Waukesha |
Get a Competitive Rate From MC Services
Monthly pricing varies both based on structure and by MSP. While there is no singular answer to the question of MSP costs, you can find providers who offer competitive rates for high-quality services.
MC Services is a good example. We’re dedicated to ensuring we understand your business needs so we can tailor our IT management practices accordingly. This way, there’s a higher chance that we’ll be able to give you a better ROI for your investment.
Reach out today for a quote.
