So you’re finally considering hiring a managed service provider (MSP), or you’re trying to consider the cost of your current one. Whichever it is, it’s essential to consider both the price tag and the long-term savings and benefits they bring. But one thing to ponder is that managed IT services pricing is sometimes unclear.
There isn't a one-size-fits-all pricing structure for managed IT support. With our experience in supporting the IT needs of over 900 organisations in Australia, we carefully assess IT service costs based on each organisation's unique requirements, objectives, infrastructure complexity, and level of support needed. These factors, combined with the expertise and successful track record of an MSP, play a crucial role in determining the overall pricing for managed IT services.
In this article, we’ll discuss the factors that influence managed IT pricing, the pricing models MSPs offer, average costs, and additional/hidden fees to help you make informed decisions that align with your business goals and budget.
How Much Should IT Management Cost?
Numerous factors directly impact managed IT provider pricing. These can vary significantly based on the level of support and customisations required. A deep evaluation of specific needs and budget constraints is needed. That’s why there’s never a direct answer to how much managed IT services cost – they differ for every business.
When it comes to managed IT pricing, there is no one-size-fits-all approach, however, understanding managed IT services pricing models can be a tremendous help. For instance, some providers offer a flat monthly fee, while others offer a tiered pricing structure based on your required services. Have a clear understanding first of what you need and iron it out with your outsourced IT provider on what services you can include on the quoted price (along with additional costs that may arise). This approach is so you and your managed service provider can work together effectively towards your business goals without getting blindsided by unexpected expenses down the line.
Managed IT service pricing in Australia is anywhere between AUD $150 to $500 per user per month. As for the per-user model, this refers to the employees who use technology to operate on their jobs. These devices can be PCs, laptops, or tablets and typically include standard support and comprehensive solutions tailored to the business requirement.
How To Forecast Managed IT Services Pricing
The cost and pricing of managed IT services vary greatly depending on business size and requirements. Small to medium-sized businesses pay significantly less than larger companies due to simpler IT infrastructure and lower demands.
Say your organisation generates an average of AUD 500,000 annually. 2-7% of your annual revenue is allocated towards IT-related expenses, which brings your monthly IT expenditures from AUD 800 - AUD 3000. Although this may seem significant, the investment translates into reliable IT support services that ultimately contribute to long-term business growth.
These figures are averages and may not precisely reflect your specific IT needs. Tailor your IT services according to your unique requirements to maximise efficiency and productivity. The first step is to carefully assess your requirements (ranging from IT support and cyber security to cloud computing and project management) and budget constraints so you can prioritise your most critical IT services that alight with your objectives.
With the help of an outsourced IT team, you can access these specialised IT services without the headaches of managing overhead costs internally. They have highly experienced and skilled professionals who can provide valuable insights and solutions tailored to your specialised needs.
Factors Affecting Managed IT Pricing and Costs
There are multiple factors that impact managed IT services pricing. One of those is the customisation required to meet your unique business needs. Here are the things that directly affect your managed IT cost:
Number of Users (Remote + On-site Employees)
When more users access your system simultaneously, the more it strains your IT. This problem means you're more likely to experience downtime and IT performance issues if proper maintenance practices get disregarded. If that’s the case, the more fees you’ll be paying for proactive support, backups, and updates to mitigate potential risks and ensure smooth operations even with a large user base.
Remote employees are also included in the number of users as they need secure connections, data access controls, and ongoing maintenance for their day-to-day responsibilities just like on-site users do. Additionally, if you haven’t transitioned to cloud-based solutions, you may face extra fees for setting up remote access and maintaining network security.
Number of Locations
Business growth is an incredible thing. But with it comes an increase in IT management costs. As your business scales and you open up more locations, hire more people, and need more devices, servers, software licenses, etc.
Estimate the IT requirements you’ll need help from your managed service provider (MSP) so you can gain clarity on any potential expenses and allocate resources efficiently. If you’re still on the lookout for a reliable IT service provider, make sure to look for one that goes beyond just technical management. They should be able to align your managed IT support solutions with your goals. This alignment will ensure your IT can function and contribute to your success.
When planning to expand your business, involve your MSP early on to help create a strategic growth plan, and you can get valuable insights into the costs that may arise as you expand.
Services Needed & Complexity
Service Level Agreements (SLAs) are crucial. It outlines the services the managed service provider (MSP) will be providing. It will delve into the specifics of device management, shedding light on how each additional managed device can impact overall IT costs. Contract durations will also be in the SLA, which can be short or long-term depending on your MSP or business requirements.
Always confirm that the outsourced IT team has the reputation and track record to support their claims before signing contracts. Ensure that they align with your goals and values. Look beyond pricing incentives and delve into their service portfolios, customer reviews, and industry certifications to double-check.
Complexity is also a pivotal factor in managed IT service pricing in Australia. Shaping various technologies and devices, such as servers, networking equipment, and storage systems, can significantly impact the integration, support, and maintenance required in your infrastructure. MSPs will assess these components to look into the overall complexity of your business IT environment before offering a pricing structure.
Backup & Storage
Businesses collect tremendous amounts of data, and the volume of data stored on servers will continue to grow exponentially, which led to requiring outsourced IT support teams help to adjust their managed IT services pricing models to accommodate their growing data sizes. Furthermore, sensitive information such as personal records or financial details requires strict security measures that may amp up the managed IT service provider pricing for enhanced data protection.
Backup and storage services can vary significantly depending on your requirements when it comes to retention and recoverability.
One important takeaway is that cheaper options may not always be the best choice, as lower-priced services tend to lack critical features like security, speed and resilience. Always check the fine print before you sign anything to get the best bang for your buck.
Common Managed IT Services Pricing Models
Per-user
One of the go-to pricing models managed service providers (MSPs) usually offer to businesses is the per-user pricing. This approach includes charging clients a flat fee based on the number of users and the managed IT support included per user, providing a transparent and easily scalable payment structure. For organisations with employees who use multiple devices, this managed IT pricing model perfectly reflects your diverse operations, so you’re only paying for the services based on actual usage and demand.
The per-user model counts the number of end-users within your IT environment. This distinction emphasises the impact and reach of technology within your organisation beyond employee headcounts.
So, how much do MSPs charge?
This pricing model usually falls within the range of AUD $35 to $250 per user per month depending on requirements.
Per-device
A common managed IT services pricing model that businesses often go for is the per-device option.
Imagine the number of servers in your network plus all the other devices that needed support, management, maintenance, and security. The more devices you have, the more it creates a ripple effect in increased complexity in your infrastructure. This approach also directly impacts the overall efficiency and security of your IT.
As for per-device pricing, you only pay for the number of devices your IT service provider manages. This model is a flexible approach to cost management. But it does have its downsides when dealing with mobile devices and Bring Your Own Device (BYOD) policies in your organisations. So, with each additional device requiring monitoring, maintenance, and security measures, this pricing model reflects this increased workload by charging a monthly fee for every managed endpoint.
So, how much do MSPs charge?
Depending on the complexity of your IT requirements, the average cost per device can range from AUD $15 to $150 per device per month.
Tiered
The tiered pricing model offers a structured approach to selecting the level of service that best fits your needs. The hierarchy of service packages provides a progression from standard to premium solutions, which in turn will allow you to align your budget with the extent of services offered. Tiered is one of the managed IT services pricing models that simplify decision-making and enables you to scale as needed, ensuring flexibility in managing costs while receiving the IT support you need.
What’s best about the tiered managed it service provider pricing model is it offers businesses of all sizes a scalable and flexible approach to crucial managed IT support wherein you can start at a lower tier and gradually upgrade as your organisation grows. This way, you can effectively manage your budget while meeting your evolving IT needs.
A-la-carte
The best thing about the a-la-carte pricing model is it allows you to curate your IT services based on your specific IT requirements. No more, no less. This approach ensures you only pay for what you need, and you can prevent any unnecessary expenses associated with bundled services. However, this will require careful consideration to avoid overloading or underloading your systems.
When using the a-la-carte model, use a strategic approach when prioritising essential services and evaluating the value they bring to the table. This way, you can align your IT expenditures more closely with your operational goals and create a perfect balance between cost control and customisation.
All-you-can-eat
This common managed IT pricing model is quite similar to a food buffet – unlimited access to a wide range of essential services, such as 24/7 support, on-site assistance, robust security measures, and management, for a fixed monthly or annual fee. The all-you-can-eat model eliminates the uncertainty of variable costs associated with traditional IT service modules and helps you plan and allocate resources more towards growth and innovation.
The best things about this model are it simplifies budgeting, encourages proactive maintenance, and resolves issues swiftly. In essence, this model creates a partnership between you and the MSP that fosters trust and collaboration in navigating complex IT issues – giving you the ability to focus on core objectives while leveraging cutting-edge technologies without fear of financial limitations.
Additional Fees and Costs of Managed IT Pricing
There can be surprise IT costs from time to time. Sometimes they’re from unexpected events like cyberattacks or from non-transparent pricing structures. It’s always advisable to prepare an emergency fund to cushion the blow of these unforeseen circumstances and also have a deep understanding of the intricacies of managed IT service provider pricing.
Too often organisations get caught off guard by hidden fees or unclear monthly bills that result in inflated invoices than what was previously agreed upon. We’re here to educate you about any additional fees and hidden costs that may (or may not) come up in your monthly invoices.
The preventative approach is always the best choice to avoid potential disasters that can lead to additional costs upfront. Yes, managed IT service pricing in Australia may seem like a daunting cost upfront, but its long-term savings and benefits far outweigh the initial investment. At Office Solutions IT, we always opt for a proactive approach – whether that’s IT solutions or pricing – we implement preventive measures that help prevent issues from occurring and enable early detection of any anomalies.
Consider this: if your server crashes, you suffer from substantial downtime and lost productivity. Only by investing in regular maintenance and monitoring to detect these issues early on can minimise such catastrophic events in your organisation.
Transparency is key when it comes to managed IT services pricing. At Office Solutions IT, we understand the importance of being fully informed about costs upfront, which is why we take the time to understand your unique requirements and design solutions that cater specifically to your needs and goals. Furthermore, we ensure that all costs are clearly outlined before any managed IT support commence so you can confidently move forward to your goals without worrying about additional fees and hidden costs.
Are Managed IT Services Worth the Cost?
Rather than a burdensome cost, view managed IT as a proactive measure that protects and enhances your competitive edge in your industry. This way, embracing IT support as a strategic asset helps you thrive in challenges and technological advancements.
While it may seem like a significant investment, dedicating funds towards comprehensive IT services can lead to substantial cost savings in the long run. Just think about the consistent support, maintenance, and priceless peace of mind you get, knowing you can avoid surprise expenses from a neglected IT infrastructure.
There are many managed services providers (MSPs) to choose from, considering there are hundreds even in the WA state alone. But with the plethora of options available in the market, choosing the right one can be a daunting task. However, opting for one that offers a flat fee SLA can create a sense of security and transparency regarding costs. An SLA eliminates the uncertainties of pricing models and ensures business owners and decision-makers understand their monthly expenditures on managed IT support. This pricing model can help you avoid unexpected spikes in costs and budget more accurately for your IT requirements.
At Office Solutions, we offer various pricing models along with a flat fee SLA that will fit your diverse needs and constraints. This multi-tiered approach will help you tailor your IT to meet all your unique requirements while ensuring cost-effective and future-proof setups.
