Managed IT services pricing is one of the most important elements potential managed services customers want to understand. And yet, it can be one of the hardest questions to find an answer to. Budgeting for technology will always be part of IT strategy, so why can this be tough to nail down?
Well, because the answer is – it depends. However, that doesn’t mean you can’t get a good idea of what you should expect managed services to cost. We’ve outlined some of the different elements involved in managed IT services pricing below.
Charging Per User vs Per Device
The first thing to understand about MSP pricing – there are 2-3 typical pricing models, dependent on the provider. Although they are fairly straightforward, defining these helps understand your base pricing model.
Per user can be based on email addresses or a list within the domain controller. Per device, as it sounds, is dependent on how many devices your organization uses. Sometimes the pricing can be based off a combination of these two factors.
Make sure to communicate your organization’s situation to your potential MSP; f0r example, if you have 50 machines but 100 people using them, explain this so the vendor understands and can factor this into your pricing accordingly. They may decide to charge you per device in this particular situation, rather than per user, given that it is a more unique setup.
Services Provided Affect Pricing
This likely comes as no surprise to any business owner, but depending on what services you are receiving, managed services costs can be higher or lower. For example, are you utilizing the MSP’s help desk? Do you have additional cybersecurity services? Each vendor you are assessing as your potential MSP partner should provide you an outlined checklist of what would and would not be included in potential service packages, along with the costs of each. This way, you can understand what you are receiving, and ensure it meets your expectations.
Understanding what is not included is an important part of doing your due diligence when assessing the cost of an MSP. For example, additional IT projects such as setting up a new phone system are typically not included in your monthly fee. However, other costs, such as a virtual Chief Information Officer, may be included in some MSPs pricing but not others. As with any other element of choosing an MSP, communication is key. As you move further along in the process, the Service Level Agreement can also give you clarity into managed IT services pricing.
It should be noted that managed services may seem more expensive on the surface, but you often will get things you wouldn’t have with internal IT. Your potential MSP should explain how they provide value that outweighs the cost, which is an important element of leveraging a managed services provider.
Why do Different MSPs Charge Different Amounts?
As explained above, the variety of offerings affects the pricing of managed services from company to company. Examine the pros and cons of the potential service you will be provided versus the cost of service. However, make sure that when assessing potential vendors, you are comparing apples to apples, or as close as possible. If provider A seems less expensive, but includes fewer services than provider B, than comparing them solely on cost probably does not make the most sense.
As we’ve discussed in a previous blog, The Price You Pay for Poor Service Quality, not all MSPs are created equal. This is another area of assessment for your organization when choosing an MSP. Ask the provider how long they have been around, what kind of experience their technical team has, and for references. You may find once you have this information that an MSP that was less expensive doesn’t seem to be as good of an option as it did previously, as oftentimes a lower cost means less experience or bandwidth. You can even simply ask the potential vendors – why do you charge less or more than your competitors? Regardless of where you land, this helps you make an informed assessment of different MSP prices.
Although it can be frustrating to hear “it depends” when asking about managed IT services pricing, it is important to understand that the cost of leveraging an MSP is influenced by many moving parts. Understanding these elements helps you understand what the cost might look like for your organization as you explore potential managed services partners.