While there may not be one definitive answer to the question: “how much does managed IT service cost?”, there are many ways you can predict the cost of managed IT services for you. Of course, this will vary depending on your provider, but there are some general guidelines.
Whatever you end up paying, one of the best things about managed service providers (MSPs) is that their costs are predictable. Your partner should highlight what you can expect to pay in their Service Level Agreement (SLA) and this price should remain consistent.
In this article, experts from the leading IT company in Michigan will break down what affects managed IT services pricing, what makes it predictable, and how you can estimate the cost of managed services for your organization.
What are Typical MSP Pricing Models and Average Managed IT Services Rates?
Most MSPs charge via a subscription model. It’s rare for an MSP to charge an hourly rate, but some may do so for professional services (if this is also something they offer). Generally, your managed IT subscription is paid through an annual or monthly fee. Still, the price range varies.
Here are 4 common pricing systems.
1. Tiered
A tiered system is a package deal set by the managed service provider. They may offer certain packages like “standard,” “premium,” etc. that include specific services. While this is a great way to get a predictable monthly cost, you run the risk of paying for services you don’t need.
2. Per User
This is the most common MSP pricing model. With this system, you would pay a specific rate per user per month. It’s important to note that this model is not necessarily based on the number of employees you have, but on the number of end-users in your IT infrastructure.
3. Per Device
With the per device model, you would pay a flat fee for every computer or mobile device connected to your managed network. In some cases, this may be more affordable than the per user model if multiple users use the same device.
4. À la Carte
Like an à la carte menu, à la carte managed services let you select the services you want and only pay for them. This can be a cost-effective solution, but there is a chance that you might need services that you didn’t know you needed. Consult your provider before you select services.
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Average Costs
The price of the aforementioned 4 systems will vary depending on your provider and the complexity of your needs. However, the following table highlights the general average cost of each.
| Pricing System | Average Price Range |
| Tiered | $3,000-$6,000 per month, depending on package |
| Per User | $175-$250 per user each month |
| Per Device |
|
| À la Carte | $30-$100 per user or device that uses each service per month |
Why are Predictable Fees Good for Your Budget?
Many business owners notice that MSPs have a higher initial cost than other IT services. However, this higher initial cost balances out in the long-term. Business Wire estimates that a successful MSP partnership will reduce IT costs by 25-45%.
This is largely due to the proactive approach of MSP services. Unlike the break-fix model, MSPs remediate system quirks that could cause future issues instead of waiting for them to become a problem to fix.
That’s a significant difference when you consider system outages during fixes can cost $5,600-$9,000 a minute.
Additionally, managed IT pricing remains consistent. You typically don’t need to worry about surprising additional costs after you’ve signed your contract. This makes it much easier to plan your annual IT budget in advance.
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How to Calculate Managed IT Costs
First, find out which pricing model your potential MSP uses. You could also compare a few candidates to gauge the best deal. Create a managed IT services price list to see a side-by-side comparison of each candidate’s annual costs.
You may be surprised by your findings. For example, one MSP’s tier package may fit your budget better than another’s monthly cost per user.
If you don’t know your candidate’s actual price, consider the average prices in the above table. Try using the following equations to get a rough estimate for your possible managed IT costs.
How to Calculate Your Managed IT ROI
Once you’ve determined your price estimate, you can predict your MSP ROI. Whether it’s a managed IT services ROI calculator, or for an ROI on something else, use this equation to predict your return.
| (Current Value of Investment – Cost of Investment) (Cost of Investment) |
You can also compare the cost of managed IT services to the cost of hired employees to see the comparative value. Use these equations to get your comparable amounts.
| (Total Annual Employee Salaries + Annual IT Costs) = Cost of Hired Employees | (Monthly Managed IT Service Fee x 12) = Annual Cost of Your MSP |
Make Every Workday Easier with Technology Solutions and Reasonable Managed IT Pricing
The KR Group offers fully managed IT services for a convenient, regular price.
Our model is a predictable monthly cost with occasional additional fees for ad hoc projects. You will be notified if any additional costs are needed.
Billing is only one part of the story. Before you reach out to The KR Group to get a quote, find out how you can benefit from our managed services:
- How to Solve Problems with your Managed Service Provider
- How to Switch to a New Managed Services Provider
- Your Complete Guide to Signing a Managed IT Services Contract
| Learn more about your future managed services contract. | Contact us |