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How Much Should I Be Paying for Managed Services?

How much should I be paying for managed services?

Managed IT Services Can Be the Key to Managed IT Costs. Here’s What You Need to Know about What MSPs Typically Charge, and What You Should Expect to Pay.

If you’ve struggled to keep up with your company’s IT needs using just internal resources, chances are, you’ve been thinking about hiring a managed service IT provider. It’s an attractive option. Managed IT service providers (MSPs) can expand and contract their contracts with your business cycles, procure business software and hardware at bulk discounts, and provide round-the-clock help desk and cybersecurity monitoring. The key is finding the MSP with the right blend of services for you. So, when you’re asking yourself “how much should I be paying for managed services?” the answer is, “it depends.”

Let’s talk about the all the things you’ll need to consider when you’re thinking of hiring an MSP.

What is a Managed IT Services Provider, and What Can They Offer My Business?

The best kinds of managed IT service providers can be “the staff IT department, who’s not on staff.” MSPs provide IT services companies do not have the headcount or technical expertise to provide. They can handle everything form ordering a laptop for your new hire, and onboarding them onto your system, to handling breakages, to installing and monitoring your software, and providing strategic counsel on how to manage your IT investments. A good MSP should be a true partner to your business, providing you with the services and strategic insight to grow your technology infrastructure to meet your business needs.

With that said, however, there are several kinds of providers out there that call themselves MSPs. The price you pay will largely depend on the type and level of MSP you hire. Here’s how that breaks down:

Independent Contractors

These little one to four person MSPs are usually who you get sent to when another small business owner tells you they “have a guy.” They may be working part time. Or, if they’re full time, they generally don’t have access to the gold partner access programs vendors can offer other MSPs. If they’re on vacation and your system breaks down, you may be out of luck. But, they are likely to offer their services a la carte, which can be an important consideration when your business is very small.

Add-on MSPs

This is an MSP that forms when and established consulting, law or accounting firm decides to also offer managed IT services. This kind of MSP is generally better than the independent operators, but it pays to ask questions. While it seems like they come from an enormous company, there may only he a small handful of IT employees on staff. They may lack the vendor relationships and staff coverage to really make a difference for your business.

Value MSPs

While this full time operation may have a few more employees, they usually compete by offering truncated plans. Perhaps they only do “break /fix” services, or they don’t offer round the clock packages. Remember, you get what you pay for. How long can your systems be down while you wait for a slot with your on again, off again IT provider? When you ask yourself–how much should I be paying for managed services? It’s important that you factor in the real costs of cutting corners.

Mature MSPs

Usually having at least 15 employees, a mature MSP has a variety of services available, gold partner or better relationships with their vendors, and the ability to provide help desk and security systems for your business 24/7. They are likely to have been in business in your area for more than five years and have deep connections in the local business community. When you ask for references, they can provide them, and their clients always have good things to say. We here at Iconic IT fall into this category, so perhaps we are a little biased. But we built our business on being able to offer clients a full complement of services.

What Should I Be Paying for Managed Services? Here’s How the Price Breaks Down

So, now that we’ve discussed the type of services that are available, let’s answer the question: what should I be paying for managed services?

To put it simply, most Break/fix IT services will cost about $75 to $250 an hour. Many of these value MSPs will require that you pay for a certain number of hours regardless of the length of the call. So it’s important to read the fine print, and ask lots of questions.

Most other MSPs operate on a “Fixed Fee” model that’s paid every month, and usually in a contract that is a one year contract, or more. Fixed fee arrangements are great, because you’re able to get a full complement of services, yet be secure in the knowledge that you won’t shocked with extra costs when the bill comes each month. Fixed fees are usually charged by how many employees/contractors you have using your business network. This “per user” pricing generally ranges from $75 to $300 per user, each month.

While this is a big range, it is set based on how many software products, cybersecurity systems and backups a company purchases. If you want around the clock IT helpdesk services, that affects the price, too. Most small and medium sized businesses tend to average around $100 to $150 per user, each month.

What You Should Ask an MSP, Before You Sign That Contract

No matter what type of MSP you choose, or what type of product package, it’s important to determine what you are, and are not getting. And sometimes, the devil is in the details. Here at Iconic IT, we have questions that we recommend you ask any MSP you’re considering, including:

  • Do you answer your Help Desk Phones live? Is staff available nights and weekends? Are these staff members local, or in another state or country?
  • What is the average response time for a service call?
  • Are staff members available to come to my facility if that’s what’s needed?
  • What does your invoice look like? Does it contain clear billing information that shows what services we’ve purchased?
  • Does your company have business liability insurance, to protect our firm in the event of errors or problems that might occur?
  • Does your MSP notify us when backups and upgrades are needed? Does your staff handle those backups and upgrades proactively?
  • Is there anything that’s not included in your all-inclusive plan?
  • What cybersecurity and system monitoring products do you offer?
  • Do you take responsibilty for our ISP, phone lines and other lines of business, or are we on our own?

When you’re asking yourself, what should I pay for managed services, the answers to these questions will quickly help you sort out which providers offer you the most service for the money.

More MSP Pricing Resources

Remember, when you’re trying to answer the question “What Should I be Paying for Managed Services?” knowledge is power. If you’re looking to take a deeper dive into MSP pricing levelss, Iconic IT can help. Check out our recent ebook, Seven ways to Save Money on Your Managed IT Services, available free!

7 Ways to Save Money on IT Services


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