Originally Published October 2022
Updated February 2024
The advantages of outsourcing your IT requirements to a managed services provider (MSP) are clear. However, calculating the cost of Managed IT Services for your organization may not always be so straightforward.
The average cost for Managed IT Services can vary depending on your organization’s needs, goals, the current makeup of your IT team and the status of your infrastructure.
Examples of Managed IT Services Costs
To give you a better understanding of how Managed IT Services costs can differ from business to business, here are two examples. We pulled these numbers from actual Loffler Managed IT clients:
What Does Managed IT Services Cost?
How much Managed IT Services cost can range widely from $2,500 per month to more than $15,000+ per month. To understand the true cost of Managed IT Services, you need to understand the variables that drive that cost up and down, such as number of devices, number of locations and length of the SLA (Service Level Agreement). Additionally, individual Managed IT Service providers may have their own models for pricing (e.g., flat-fee per month or hourly), which will influence your cost.
The key to figuring out how much you should expect to pay for Managed IT Services is to understand how these factors relate to your organization:
- Number of Devices
- Number of Locations
- Remote & On-Site Employees
- Length & Type of Service-Level-Agreement (SLA)
- Type of Backup
Factors that Impact Managed IT Services Cost
1) Number of Devices
Consider the number of servers in your pricing calculations. Increasing the number of servers in your network adds complexity to your infrastructure, requiring additional support hours for management, maintenance and security.
Price Range for Each Device
The amount you pay for each managed device depends on the location(s), number and types of devices you need managed. More complexity means a higher cost. On average, you can expect to pay around $95 per device.
2) Number of Locations
The more management you need, the higher your cost will be. IT management costs can differ greatly between small businesses with single locations and larger enterprises spanning multiple locations.
A reputable Managed IT Services provider should also take your organization’s goals into account. Do you plan on growing and expanding within the next year? Five years? Your provider should help you plan and give you an idea of how IT service costs will increase.
Price Range for Each Location
Giving you an exact price range per location can be difficult. We could provide some numbers here, but that wouldn’t be doing you any justice. The most significant factor for determining costs is to figure out the total number of devices you need managed by your MSP. Use this formula to get an idea for your organization: Device Count = Office Locations + Servers + Desktops & Laptops
3) Remote & On-Site Employees
Having employees working remotely adds an additional layer of complexity to your network. When calculating the device count, remember to account for mobile devices or tablets connected to your network.
The increase in remote work has also led to the popularity of the BYOD (Bring Your Own Device) trend, which further complicates matters due to heightened security risks.
Price Differences for Remote & On-Site Employees
The cost variation between remote and on-site employees hinges on your existing IT infrastructure. If your organization is already in the cloud, you have a head start.
However, if transitioning to the cloud is necessary to fulfill collaboration, security and storage requirements, expect additional setup expenses. Implementing extra network security measures for remote employees will also elevate the average cost of Managed IT Services.
4) Length & Type of Service-Level-Agreement (SLA)
The SLA between you and your service provider outlines the services you’re receiving for your investment. Your SLA will detail the devices requiring management, with more managed devices leading to higher total costs.
Additionally, the contract duration agreed upon can directly influence the long-term cost of IT management.
How Your SLA Impacts Pricing
Numerous service providers will offer incentives for committing to longer contracts, potentially saving your organization thousands. However, it is crucial to diligently evaluate and select a trusted Managed Services Provider (MSP) when considering a multi-year contract.
5) Data Backups & Storage
Another factor to keep in mind when looking into Managed IT pricing is how much data you need your MSP to manage and backup. The more data that needs to be managed, the more equipment and support hours required, which increases pricing.
Pricing for Backups & Data Storage
A wide gap can exist when comparing prices for data storage. Prices can range anywhere from $500 per month to $3,500 per month.
Remember, you get what you pay for when it comes to data storage. Cheaper prices can seem very attractive, but these plans probably won’t come with maintenance, proper backups or advanced security features.
Common Managed IT Services Pricing Models
Per-Device Pricing
The per-device pricing model stands out as a prevalent choice among MSPs. In this approach, MSPs impose a consistent monthly charge for the devices under their support and management. Its popularity stems from the flexibility and straightforwardness it offers both MSPs and their clients.
However, the per-device pricing structure may encounter intricacies as clients incorporate additional devices such as tablets and smartphones into their networks. The introduction of Bring Your Own Device (BYOD) policies and the prevalence of remote work can further complicate the dynamics of this pricing model.
Per-User Pricing
Like device pricing, this model allows MSPs to charge clients a flat fee based on the number of users. This is advantageous for clients that have users with multiple devices that need to be managed.
Tiered Pricing
Tiered pricing is another widely adopted model among MSPs. The cost of Managed IT Services fluctuates depending on the tier selected by clients, typically ranging from basic to premium. This pricing approach is frequently favored by both MSPs and clients due to its inherent flexibility.
Organizations utilizing a tiered pricing model have the freedom to upgrade or downgrade according to their present requirements and financial constraints.
Managed IT Service Provider Red Flags
Over Promise & Under Deliver
When selecting a service provider for your organization, ensuring they possess the capacity to support your needs is crucial. If a provider operates with a team of only five to ten individuals, they may struggle to handle an excessive client workload effectively.
It’s vital to inquire about how the service provider manages client load balancing. For instance, at Loffler, we distribute our clients among multiple Managed IT Services teams, ensuring each client receives the appropriate level of attention.
Lack of Experience Working in Your Industry
Every industry has unique IT requirements, and it’s crucial for your service provider to possess a deep understanding of your specific needs. The internal structure of your service provider’s managed services teams significantly influences your organization’s satisfaction with outsourcing IT services.
Contact Loffler Today
At Loffler, we structure our Managed IT teams with six to eight engineers, each dedicated to specific industries. For instance, if you’re a legal firm seeking to outsource IT services, you would be assigned to Loffler’s Alpha Team, specializing in IT solutions tailored for the legal industry. This targeted approach can make a substantial difference.
While determining if Managed IT Services are suitable for your organization, cost becomes a pivotal consideration. As a Managed IT Services provider, Loffler efficiently handles IT requirements for numerous clients, enabling them to concentrate on running and expanding their businesses.
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