How Much Do Managed IT Services Cost? [Updated for 2022]

What if I told you there is a service that can alleviate most — if not all — the stress you have about keeping technology working along with all of your other executive duties? managed IT services cost

Before you write off the possibility as too good to be true, let me explain the concept of managed IT services.

With this IT solution, you outsource the maintenance and management of your IT environment to a team of technology experts, known as a managed services provider or MSP. Once you’re onboarded as a customer, they’ll handle everything from printer problems to figuring out why you can’t connect to the internet to locating those missing files.

As a busy business leader, you’re likely, at a minimum, intrigued by this concept. But you’re also budget-conscious, so we expect that your most pressing question is how much this solution costs.

You can anticipate spending between $200 and $250 per user per month, with a minimum monthly commitment of $2,500. Keep in mind the numbers are based on The KR Group’s managed services prices, and different providers might cost more or less.

So how do we and other MSPs come up with these prices? We’ll give you some insight into the various factors that play a role into the cost.

 

Managed IT Services Retainer

Before you start receiving monthly managed services bills, the first invoice you’ll pay is the retainer.

Typically, this is equal to one month of services and is due after you sign the agreement prior to your MSP assuming responsibility of your IT environment.

This fee is non-refundable but your MSP will apply the payment to the final month(s) of your contract.

Managed IT Services Recurring Rate

The cost you’ll become most familiar with is your recurring monthly charge.

Most MSPs require you to pay a minimum amount each month – generally around $2,500. This covers the first 10 users in your organization and pays for the MSP’s time and tools to support your IT environment.

Beyond that, you’ll pay approximately $250 per user per month for up to 15 users, $225 per user per month for up to 19 users, and $200 per user per month for 20 or more users.

That price fluctuates based on how your MSP implements the following categories into their agreement:

 

1. Onboarding Fees for Managed IT Services

Before we get into the details of what goes into per-user pricing, let’s start at the beginning of how your MSP will bill you. 

Once you give a prospective MSP the green light to start assessing your IT environment to hone in on your monthly costs, they’ll need to conduct an audit. 

During this review, your MSP assesses what technology you have in place, checks for any issues you need to address before beginning services, and verifies the number of users in your organization. 

Many MSPs, including The KR Group, incorporate the cost of the audit into your monthly fees. However, some providers charge a one-time fee for this part of the contract. 

 

2. Ongoing and proactive support

Help-desk support is a significant part of your MSP’s services. They’ll staff engineers with the knowledge and experience to walk you through resetting your password to coming on-site to look at your malfunctioning hardware. 

Because not all IT issues happen between 8 a.m. and 5 p.m., your MSP engineers are on-call and available for after-hours emergencies. (You’ll want to check your contract if this service is included in the price of your contract.)

You can also work with your MSP to participate in your organization’s planning meetings or quarterly review to provide guidance and insight on the direction of technology for your company. 

Your MSP has to pay its staff for their time, which is reflected in your monthly rate. 

Plus, there are software components your MSP will implement into your IT environment to help the engineers do their jobs. For example, remote maintenance and monitoring software allows your MSP to access your users’ laptops remotely, which allows for faster problem resolution. Or, dynamic documents to help your MSP identify unapproved devices added to your network and reduce security risks. 

 

3. Security controls

Next generation MSPs should be providing security-focused services that include a combination of solutions, assessments, and scans.

  • managed IT services cost Anti-spam catches malware at the email level. It flags suspicious emails and prevents malicious software from coming through your user’s online inboxes.
  • Next-generation antivirus identifies threats that may be lurking on your devices. 
  • DNS filtration monitors your internet traffic for potential suspicious or malicious links and prevents users from opening them.  
  • Multi-factor authentication (MFA) is a security step that requires you to enter a code in addition to your login credentials. In a world where cybersecurity threats are continually advancing, it’s essential to protect your IT environment.
  • Blue team assessments, penetration testing, and vulnerability scans are different cybersecurity evaluation tools your MSP will use to identify vulnerabilities and gaps in your IT security posture and, ultimately, strengthen it.
  • Security awareness training helps your users identify and avoid potential threats they could otherwise unknowingly allow into your network. Your users are your biggest vulnerability, which makes training them imperative.

All of these subscriptions and solutions should be included in the monthly fee you pay for managed IT services. Without this agreement, you’d have to research, subscribe, and track each individual solution.

But with managed IT services, your MSP research and vets the solutions they recommend you use, so you can rest assured they’re safe and effective. You’ll use the same solutions as the rest of your MSP’s customer base, so they can quickly identify and resolve any issues.

 

4. Leased hardware

Your MSP will strongly recommend you follow their security software standards, they’re stricter about the hardware you use, specifically firewalls, access points, and switches. . 

Not only is it more efficient for your MSP to troubleshoot, but it also ensures the gear you use is securely functional in your IT environment. You don’t have to worry about what security measures the device has in place or if it is enterprise-grade. 

You can rent the need devices from your MSP, and the cost is incorporated into your monthly bill. Some MSPs may alternatively require you pay for the equipment at the beginning of your agreement. 

 

5. On-site and Off-site Backup

If you’ve ever accidentally deleted an important file, you know the gut-wrenching anguish that comes with data loss. When it comes to your business, the ramifications of losing critical data is infinitely worse.

MSPs provide business continuity services in the form of backup, so you can avoid the emotional roller coaster of lost files. 

There are two components to backup. On-site backup helps with quick recovery times against data corruption and hardware failures. Meanwhile, off-site backup with replication keeps a copy of your data, so you can recover your files if there is a fire, flood, tornado, or other natural disaster. This is a recurring, monthly fee based on the amount of storage you need. 

As far as how much you’ll pay your MSP for these services, it depends on several factors. 

  • Licensing: Generally, your backup is licensed per device or operating system. The more licenses, the higher your cost.
  • Sizing: The more data you need to backup, the more you’ll pay. And, you’ll want to keep in mind how much data you’ll need to store in a few years from now, so you don’t immediately outgrow your solution. 
  • Control bandwidth throttling: If you have an off-site backup, you’ll want a mechanism in place to ensure your internet connection isn’t saturated when transferring data off-site. 

Based on your provider’s billing practices, backup could be an upfront cost or blended into your monthly recurring fee.

 

Managed IT Services Cost Savings & Increase

After being asked about the price of a managed services contract, the most common question The KR Group hears is how to reduce that cost. 

We get it. You have an IT budget and are trying to stick to it or below it. While MSPs competitively price their services to cover the cost of support and solutions, there are a few ways to reduce how much you spend on IT. 

For example, if you already own up-to-date, enterprise-grade networking devices (firewall, access points, or switches)that matches your MSP agrees to support, you won’t be charged for hardware rental. 

Likewise, if you are already paying for security solutions that are in your MSPs technology stack, you’ll eliminate invoices since your MSP will incorporate it into their bills. 

However, your managed services bill can also increase. 

This most frequently happens when you add additional users and your monthly rate increases or when you require after-hours support. 

 

How Much Will You Spend on Managed IT Services?

There’s no denying cost is an important factor when deciding if managed IT services are right for you.

The total price of your managed services contract depends on how many users are in your organization since each one costs between $200 and $250 each month. 

This recurring fee can cover almost all costs associated with managed IT services, such as onboarding, support, security controls, hardware, and backup. However, you’ll want to check with your provider to double-check these are all financed monthly and you don’t have pay for any solutions in full at the beginning of your contract. 

You should expect to pay an upfront retainer before officially handing over your IT environment to your MSP., and understand there are ways you can increase or decrease your monthly bill. 

To help you better understand what managed IT services look like with The KR Group, check out our free guide on signing a contract with an MSP. It goes over everything you need to know before signing a contract.

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