Managed IT services are essential to businesses that want to remain competitive in a digitally-driven world. Entrusting your IT needs to an MSP (managed service provider) is a great way for small business owners, startup founders and IT managers to ensure uninterrupted operations and consistent support.
Understanding the pricing for these services may be overwhelming. The right pricing model will have a significant impact on the budget you set and the value that you get from the service.
This guide explores pricing factors and offers advice on selecting the best model for your business.
Common pricing models for Managed IT Services
1. Per-Device Pricing Model
The per-device fee is a flat rate for each device covered by the service plan. Desktops, laptops or servers can be included in the devices.
Pros:
- Costs are predictable: It is easier to calculate monthly costs as you pay only for the number devices managed.
- Scalable: This is ideal for businesses that have a constant number of devices such as small offices.
Cons:
- Support is limited: Focusing on individual devices can leave out network-wide problems.
- Costs can be higher for large companies: If your company has a lot of devices, it could become very expensive.
The best suited for:
Small businesses that have a simple IT set-up and predictable device counts.
2. Price per User
This model charges one fixed fee per user and covers all devices that are used by the individual. One user’s laptop, desktop and phone, for example, would be covered by a single charge.
Pros:
- All-inclusive coverage: Organizations with multiple employees who use different devices can benefit from user-centric, comprehensive support.
- Simple billing: Billing is based on users, not hardware. This simplifies budgeting.
Cons:
- Not device-focused: Businesses that have a heavy device setup (e.g. many shared devices) might not benefit as well.
The best suited for:
Businesses or startups with multiple employees who use devices to conduct business.
3. All-Inclusive (Flat-Fee) Pricing Model
Flat-fee models offer all services at a fixed monthly price, regardless of how many devices or users are involved. This includes 24/7 monitoring, maintenance, and support.
Pros:
- Predictable costs: No surprises or hidden fees.
- Comprehensive service: Includes a broad range of IT requirements, and avoids additional charges for support.
Cons:
- Costs could be higher initially than for other models.
- Standard packages may not always be flexible enough to meet niche business requirements.
The best suited for:
SMBs who want comprehensive IT management, without having to worry about extra charges for unanticipated issues.
4. Value-Based Pricing Model
This pricing model is based on the value that the MSP provides to its clients, taking into account factors such as business savings, efficiency gains and risk reduction.
Pros:
- Focus on results: You only pay for services that add clear business benefits.
- Packages tailored to your business: Services that are tailored specifically to meet your needs.
Cons:
- Complex negotiation: determining “value” is subjective and can involve complex negotiations.
- Unpredictability of cost: Prices may vary based on the perceived value.
The best suited for:
Businesses that are focused on measurable IT outcomes and want to get a return from their MSP.
5. Tiered Pricing Model
The pricing structure is based on a range of service packages (e.g. basic, advanced, and premium). Businesses can select the tier which best suits their budget and needs.
Pros:
- Choose from a range of options based on the level of service you require.
- Scalable: It is easier to upgrade your account to a new tier when you grow or demand increases.
Cons:
- Upgrades may incur additional costs.
- Overlapping features Some businesses pay for higher-tiered features that they do not use.
The best suited for:
Small business or startups who want to select IT services according to their current needs.
Factors Affecting Pricing
It is important to understand pricing models, but there are other factors that can influence the price of Managed IT Services. Some of these factors include:
- Costs are higher for larger organisations, with more devices or employees.
- IT Infrastructure: Organisations with complex IT infrastructures (e.g. multiple servers, software systems, or branches) will need more services and pay higher fees.
- Pricing is heavily influenced by the service features included in your plan (e.g. cybersecurity, data recovery and 24/7 monitoring).
- Customisation: IT services tailored to the needs of your business can be more expensive than standard packages.
- Expertise of the Provider: MSPs that are established and have seasoned experts will likely charge more, as they can demonstrate their expertise.
The Right Pricing Model
It is important to choose the right pricing model in order to balance your costs and the value that you get. How to choose the right pricing model:
- What are your IT needs?
- Identify the IT challenges facing your business (e.g. frequent system outages, outdated infrastructure).
- Decide if you require comprehensive assistance or specific help.
2. Assess Your Budget
- How much are you willing to spend each month on IT support? Set a budget to align with the growth goals of your business without straining resources.
3. Prioritise Features:
- Choose features that are non-negotiable for your company (e.g. 24/7 support, enhanced safety measures, cloud backups).
4. Ask for Customisation
- Talk to MSPs to find out if they can tailor packages to your needs under specific pricing models.
5. Compare providers:
- Request quotes from multiple MSPs and compare their pricing models.
You can start your IT journey here
It is important to understand pricing models for Managed IT Services in order to make an informed decision. It is important to choose a model that not only optimizes IT performance, but also fits your budget and goals. There’s a model for everyone, whether you’re an entrepreneur looking for scalability, or a small-business owner who wants consistency.
Softrobo is a specialist in helping companies like yours to take control of their technology needs through customised Managed Services. We would love to explore with you the best pricing options available for your business.
Softrobo can help you achieve a seamless IT environment. Contact us today to get started.
