MANAGED IT SERVICES | 12 MIN READ
When comparing Managed Service Provider (MSP) pricing, you can feel stuck when choosing between all-inclusive and a la carte models. Managed services is a complex product already, so throwing different pricing models into the mix only serves to further complicate your decision. Read more to learn the difference between both pricing models as well as how else, disregarding price, to find which type of MSP is a better match for your business.Not enough time? Jump to:
What's the Difference?
A La Carte
With a la carte models, you only pay for the services you need. These types of pricing models offer you the freedom to only pay for services you pick and choose.
While a la carte models don’t provide the range of services that all-inclusive models do, they can potentially come at a lower cost since you're only paying for certain services.
While it isn't technically managed services, break-fix services are useful for companies without an internal IT staff that don't have the capabilities to fix big issues. Here, you can find your standard computer repair shops (the Geek Squads of the world).
With this model, if your equipment malfunctions, needs an update, or something else you aren’t sure how to do, you can take it to a company that does nothing but single jobs.
In this sense, break-fix models take a more reactive stance to managing IT, as companies pay for external support only when something breaks as opposed to paying to proactively monitor systems.
Since this pricing model isn’t all-inclusive, it does not include any of the malware protection, email filtering, vendor management, and data back-up that a managed IT services provider would offer.
Flat rates are often between $40-$350 for specific services like troubleshooting or device repair.
Hourly rates can be between $99-$250 per hour, depending on the level of service required, but it's important to note that the time required to travel to the client's place of business may also be factored into the overall cost.
This provides companies with a relatively cheap option to include managed IT services in their infrastructure.
With this option, a third-party company’s job is to remotely monitor either a few specified aspects or all of a client’s network infrastructure. Companies pay third party managed service providers to use a Remote Monitoring and Management (RMM) software to monitor their system.
Based on the size of your budget or how well-equipped your internal IT team is, when a monitoring-only provider notifies you about issues, you can either fix it yourself internally or pay extra to have them fix it. Sometimes with this pricing model, the external company trains in-house IT staff on basic monitoring practices.
Monitoring-only models can range from $20-30 per device per month, but since this is an a la carte system, the price varies more depending on if you decide that you want to upgrade an aspect of your monitoring package, for instance upgrading 9-5 Monday-Friday monitoring to 24/7 monitoring.
The price could also increase if you decide to take more of a hands-off approach internally and pay more to let the third-party company monitor more aspects of your infrastructure. The issue with this model is that when you pay for a monitoring-only service, the costs of having to pay to fix any issues that the third-party provider finds quickly adds up.
Think of all-inclusive models as an all-you-can-eat buffet. In a buffet, you pay a flat fee for a wide range of food, allowing you to sample a few different options or get heaping plates of food for the same price. All-inclusive pricing models work in a similar fashion. They offer a wide array of services packaged together for a flat fee per month. This allows you to fully leverage each service offered.
Per user models give a company all the monitoring and maintenance services with zero hidden costs.
This model allows companies room to grow in their technological capacity. If a company hits a hiring boom and needs to quickly add and on-board many employees, they can do so without worrying about their managed services costs skyrocketing.
The issue with this model is that tech support is built into the package, so if your company doesn’t have a need to call tech support often, you might be over-spending on tech support.
However, keep in mind that having few technical issues could result from the outside managed service provider (MSP) monitoring so well that there aren’t many issues. A comprehensive, full-service per user model will run you $100-$200 per user, per month.
“Why is there such a price range for the per user option?”
Some MSP's charge more when you choose to utilize your own network security platforms that are different from theirs. This is because they spend additional resources learning how to use your software and assume the risk of integrating unfamiliar software within their monitoring and support programs.
A managed service provider may also be willing to remove services to make the price more reasonable for your budget. Be cautious, though — if you remove too many support functions from your cyber security package you risk losing the entire purpose of getting managed IT services in the first place, which is to effectively manage and protect your network.
There is one model, the per device model, that allows companies the flexibility to build either an a la carte or all-inclusive model, depending on that company’s needs.
This model combines a few different prices to offer a packaged price per month, but still has separate costs for your network endpoints. Endpoints include servers, devices connected to your network such as work phones and desktops, and network equipment such as network switches.
You can make this model more a la carte by only paying to monitor certain devices and paying extra to fix issues. You can make this model more all-inclusive by monitoring all aspects of all devices.
The issue with per device models is that if you have a lot of equipment, this model can quickly get expensive − a single company phone or tablet counts as a device in addition to all your computers, copiers, and desktop printers.
Additionally, companies that use this model can vary in how much they charge for certain devices. For instance, they could charge $5 per month for a work phone, $30 per month for a desktop, and $50+ for an executive’s computer.
For a more all-inclusive per device model, a pricing package could include the following: anywhere from $200-250 per month for server monitoring, $25-75 per piece of equipment per month for monitoring network equipment, and $5-100 per device per month.
For a more a la carte model, these prices will be a little cheaper depending on how your service package is built.
Which Is Better?
A La Carte
These types of models can work for larger companies who already have somewhat of an internal IT staff and just want some extra support.
A la carte models can come at a lower cost because you're not paying for a pre-priced package.
Keep in mind though, figuring out which services you want and don’t want can quickly become a hassle. Conducting extra research on the types of services offered before building a package ensures that you won’t be roped into paying for services that might not work for your company’s needs.
The break-fix option is a great cost saver if you only have a job or two per month, but this can quickly become expensive if you experience several periods of downtime within a 30-day period. Break-fix models run on hourly and flat rates.
This model is great for companies with a small internal IT staff who might not be equipped to fix large issues or would become overwhelmed with handling all aspects of their company’s cyber security infrastructure.
All-inclusive models offer the budgeting ease of paying a flat fee to monitor all aspects of your cyber security infrastructure without being nickel-and-dimed with added costs after. Additionally, these models take the hassle of figuring out how to internally manage your network by collectively managing everything for you.
These models are beneficial for small to mid-sized companies with little to no internal IT staff who need a full range of security coverage.
Per user models make protecting your network and budgeting a breeze. Every monitoring and maintenance service is included, and this model makes budgeting easy because the only cost per month is a flat fee per user.
With this model, since all services are packaged into a bundle, you don't get caught up with deciding which services are a good fit for your business. Additionally, since pricing is per user, your company has room to expand without worrying about how many devices per employee that you need protected.
Remember, this model can take the form of an a la carte or all-inclusive model.
From an a la carte perspective, this model can be beneficial for companies with some internal IT support who only wish to protect certain executives’ devices, for instance the CEO’s phone and laptop.
Additionally, you might want an a la carte per device model so you can internally manage portions of your IT, but pay to have an outside company manage your servers or provide overall downtime prevention measures.
From an all-inclusive perspective, this model can work for companies with a smaller number of devices but no internal IT support. If you're a small-to-medium sized business, you may not have the budget to build out an entire internal IT team. Per device models, similar to per user models, let you have an external team monitor and fix your network for a flat fee.
Similar to per user models, all-inclusive per device models can make budgeting easier since you're paying a flat fee per month for network protection.
Additional Factors to Consider
When figuring out which MSP to sign with, there are a number of additional factors besides pricing to consider. Keep reading to learn about what else you should keep in mind when looking at an MSP's services package!
Most data back-up solutions involve cloud computing options. This ensures your data is available should something catastrophic happen to one of your hard drives.
E-mail Archiving and Filtering
This service constantly backs up past emails and employs a spam filter in an attempt to eliminate phishing threats.
Commonly referred to as the Help Desk, 24/7 support serves as the call center for managed service providers. Call centers can range from actual call centers that are outsourced by a third party, to call centers that are in-house and supported by actual IT service staff.
Office Software Management
Take Office 365 as an example of such a software. Some managed service providers (MSP’s) will include an office management software in their package to assist with digitizing your company's processes.
Equipment Leasing or Purchasing
IT services providers can offer equipment such as laptops, desktops, tablets, servers, firewalls and more for rental/purchase.
Server and Equipment Maintenance
Servers are computers or computer programs that manage access to a centralized resource or service in a network (such as a website). Onsite servers, onsite maintenance, and server virtualization all work together to help a company's network continue to function offsite if the onsite machine experiences downtime.
Keeping up with compliance standards is essential for some industries such as the healthcare industry, who risk losing multi-million-dollar contracts with companies who are not permitted to do business unless those standards are met.
Compliance considerations task a managed services provider with keeping current on new federal and international regulations that deal with technology and the Internet, specifically with Personally Identifiable Information (PII).
Virtual Chief Information Officer (vCIO)
Managed Service Providers may offer the service of a virtual Chief Information Officer. vCIO’s work to manage your company’s IT needs, whether that be strategizing how certain technology can meet your business’ needs or overseeing the repair of any major IT issues.
vCIO’s mainly oversee your company remotely but occasionally make in-person visits to recommend technology upgrades and strategy for your business.
Are Managed IT Services Worth the Money?
The fact that you’ve read this article means you believe in the potential of some form of managed IT services. It also might be possible that you currently don’t have adequate in-house support. At Standard Office Systems, we strive to provide such localized IT support to companies in Georgia that our help feels in-house.
Even though the Equifax’s and Capital One's of the world are the ones making headlines, many people fail to realize that 4,000 small and mid-sized businesses are hit every day by data breaches. Of those 4,000, 60% never recover (IBM study, 2017).
There are so many factors that go into proper network support that it is difficult to list every single one. Even though every MSP is different, the good ones will be able to offer you all of the features that were previously mentioned and more.
Businesses cannot afford to be unprepared when hackers attempt to breach their networks. A single internal IT personnel is not an effective long-term solution for smaller companies. This is because that employee probably has other job duties, for instance if they are also an office manager or a receptionist.
Protecting an entire company’s network is a difficult job for a single person to manage, which is why we provide a small army of network engineers to assist our customers.
The truth is that managed IT services are a lot like healthcare. When you are healthy, you don't think you need coverage to cover extremely expensive medicine or surgery. If you get sick without healthcare, though, the costs can be crippling.
Managed IT services are also impossibly expensive if you wait until the day something goes wrong. Solid network support is something no business can comfortably operate without. Your business cannot afford to be crippled by preventable downtime or data loss. It's not a question of if there will be a technology issue or security breach, but when.
Posted by Kevin Kendall
Kevin Kendall is the VP of Services for Standard Office Systems and has built a career of assisting businesses with their office technology needs. He has decades of experience with products and services like copiers, business phone systems, and managed IT services. Mr. Kendall is driven to see others succeed and help them develop to achieve results beyond ordinary expectations.