In 2023, managed services spending accounts for 18% of IT budgets, up from 15% in 2020. This is because many companies turn to managed service providers (MSPs) to ensure their technology stack runs smoothly and efficiently. However, understanding the exact costs associated with it presents a challenge for SMBs.
| “The true cost of managed IT services extends beyond the invoice. It includes the value of enhanced security, increased efficiency, and the peace of mind that comes from knowing your IT infrastructure is in expert hands“, says Ryan Locking, COO, CAUSMX Technologies. |
In this guide, we’ll simplify how managed IT services pricing works, outline the various pricing options, and offer advice on getting the best value from your IT services. You’ll also find a handy calculator to help you easily determine the cost of managed IT services.
Overview of Pricing Models in Managed IT Services
Managed IT services pricing models can vary depending on the pricing model chosen. Each model offers different benefits and can impact the overall cost.
| Pricing Model | Pros | Cons | Ideal For |
| Per Device | – Simplified billing based on the number of devices. – Easier to budget. | – Can become expensive as the number of devices increases. – Less focus on proactive services. | Small businesses with a limited number of devices |
| Per User | Covers all devices per user, offering flexibility as technology usage evolves. | Costs may rise with each new hire, regardless of device count. | Employees using multiple devices |
| Tiered | Offers different levels of service at fixed prices, allowing for scalability. | Higher tiers can be costly. Basic tiers may lack essential services. | Businesses seeking scalability for a predictable cost |
| All-inclusive/Flat Rate | – Predictable costs with comprehensive coverage. – Encourages proactive IT management. | – May be more expensive for smaller needs. – Risk of overpaying for unused services. | Businesses looking for simplicity and full IT management |
| A La Carte | – Flexibility to choose specific services. – Can control costs by selecting only needed services. | – Potential for higher costs if not carefully managed. – May lack the comprehensive approach of other models. | Specific, varying business needs or project-based requirements |
Per-device pricing
This is a straightforward model where costs are based on the number of devices serviced. It is predictable but may not scale well for businesses with many devices. This pricing approach might be the most cost-effective solution for those requiring basic tech support for just a few devices.
Per-user pricing
A per-user model charges based on the number of users, simplifying billing for businesses with employees using multiple devices. This can be more cost-effective than per-device pricing in some scenarios.
Tiered Pricing
Tiered pricing offers packages or “tiers” of service, each with a set price and specified services. Businesses can choose a package that meets their needs and budget. Make sure you select a package that includes all the services you need, such as vendor management, remote support, or 24/7 helpdesk access.
A La Carte Pricing
This model allows businesses to create a personalized managed IT services price list as needed, offering maximum flexibility. By picking just the services you need, you can ensure that your IT support perfectly fits your business needs and budget.
Flat Fee Model
A flat fee model charges a single, all-inclusive monthly fee for all IT services, offering predictability in budgeting. This model is easy to budget for but may include services that you don’t need.
Factors Affecting Managed IT Pricing
Now that you understand the costs of managed IT services, let’s examine what can affect your total cost. This will help you choose the best payment plan for your company, select the services you really need, and avoid paying for unnecessary services.
- Service Complexity: The complexity of the services plays a significant role in pricing—the more complex your IT needs, the higher the price. Basic remote support will cost less than comprehensive services, including onsite support, cybersecurity, and proactive network management.
- Contract Length: Longer contracts often benefit from lower monthly rates due to the stability they offer to the service providers.
- Service Level Agreements (SLA): Higher service levels come at a premium. The higher the cost, the more you expect in terms of uptime guarantees, response times, and dedicated resources.
- Number of Devices: The number of devices supported (workstations, servers, mobile devices) directly impacts pricing due to the increased workload and complexity. Still, rapid business growth is the best time for an SMB to consider managed IT.
- Number of Locations: Businesses with multiple locations may face increased costs due to the complexity of managing IT infrastructure across sites.
Average Managed IT Costs
Understanding the average cost of managed IT services can be challenging due to service variability and pricing models. The monthly expense of managed IT services can vary between $166– $399 CAD per month.
The size of your business, the complexity of your IT needs, and the level of support you require can influence the costs.
Managed IT Services ROI Calculator
Calculating managed IT costs can be daunting, considering different IT setups and requirements. So, we designed a managed IT services calculator to help you understand your potential return on investment when opting for managed IT services.
Calculate Your Managed IT Costs
Interested in a Managed IT Quote From CAUSMX Technologies? |
Once you have a cost estimate, you can determine the ROI you’ll receive from your managed IT services. Consider the cost of IT management without a service provider and compare it to the cost you calculated above.
Then, you can use this formula to estimate your potential ROI.
ROI = (Expenses Without Service) – Cost of Service |
For example, if the cost of a provider is $10,000 and the cost of IT without a provider comes to $11,000, your ROI using this formula would be $1,000.
Tips to Negotiate Your Pricing
- Understanding your position: Understanding your negotiation leverage, such as the willingness to sign a longer contract or commit to a broader range of services, can significantly affect pricing.
- Clarifying requirements and expectations: Being clear about your requirements and expectations ensures you’re quoted for exactly what you need, preventing overspending on unnecessary services.
- Aim for added value: Negotiate not just on price but for added value. This could include additional services, improved SLAs, or flexibility in the contract terms.
- Balance long-term contracts and flexibility: Long-term contracts can offer cost savings but ensure you’re not sacrificing the flexibility your business may need to adapt to changing technology landscapes.
Manage Your IT Needs Within Your Budget
Understanding managed IT pricing ensures you make an informed decision, optimizing your IT operations and budget for long-term success. The right IT partner helps you meet your specific business needs and fits your budget constraints.
CAUSMX Technologies offers tailored solutions that align with your business requirements and budget.
Contact our IT specialists to learn how we support your business goals without overspending.
