Modern businesses depend on their digital technology, so when it comes to operating a successful firm, a Managed IT Services Provider can be an excellent business partner.

But how much should you really be paying for managed IT services? There are several different types of managed IT services you can purchase, and because of that, many MSPs are keeping quiet about their pricing amongst the competition.

The outcome is that you may be paying for IT services you don’t really need, making it harder for your business to grow. It’s important to understand why MSPs are secretive about their pricing and to know what the going rate for IT services is to make more informed decisions about your own IT provider.

Why Do Managed Service Providers Keep Pricing a Secret?

In reality, most High-Level MSPs charge each of their clients about the same price per month, but because there are other types of MSPs impacting the industry, pricing often gets kept under wraps.

The Four Different Kinds of MSPs

We outline four different kinds of MSPs in the industry: Pure-Play MSPs, Value MSPs, Sales-Driven MSPs, and High-Level MSPs. The clientele they serve and solutions they provide differ, affecting pricing and competition in the industry as a whole.

Pure-Play MSPs: They only serve a handful of clients, and while they may appear to offer similar services to a Mature MSP, they usually have far less experience. This can lead to your business’s IT lacking a clear alignment with your business goals for growth.

Value MSPs: They serve about 10–15 clients, and their core goal is to offer very inexpensive break/fix IT solutions to several clients. The problem here is that they typically lack the proper tools and consulting know-how to improve your security or streamline your processes over time.

Sales-Driven MSPs: They work with much larger organizations, usually providing printer rentals, phone systems, administrative services, and more. These organizations fall more within the sales realm than the technical MSP category, meaning their core goal is to build a revenue stream rather than manage your technology securely and efficiently.

High-Level MSPs: They work with companies housing over 20 employees and have 10+ years of experience offering managed IT services. They offer total technical management including cybersecurity, consulting, and project management services. High-Level MSPs’ core goal is to offer consulting and solutions for their clients’ technology using a monthly subscription service model.

How Pricing Is Affected by Each Type of MSP

Because High-Level MSPs typically know each other and understand that they are all charging their clients relatively the same price per month, competition is friendly. Opportunities to service clients usually depends more on scope than on pricing.

The reason High-Level MSPs tend to avoid divulging their prices is not because of each other, but because of the other types of MSPs in the industry. Here are some of the main reasons pricing is kept secret:

  1. Because Pure-Play and Value MSPs don’t have the overhead costs of training, security, and other administrative processes, they can offer lower prices, tricking uneducated buyers into thinking their services are the same as other MSPs’ at a lower cost.
  2. Similarly, Sales-Driven MSPs can offer their services for a lower upfront cost, but they usually drive up contract prices with add-ons as time goes on. Rather than offering consulting that will yield long-term growth, they offer short-term solutions as needed. Consulting is not a priority, as their core focus is more pressing, sales-driven partnerships.
  3. High-Level MSPs include consulting in their service model, so one of their first priorities is to review each client’s technological infrastructure before offering pricing options. This helps them understand the unique needs of their business and to tailor custom solutions based on their assessment.

High-Level managed services can be bundled, but when broken down, High-Level MSPs charge about the same amount for each service as one another. Pricing between High-Level MSPs usually only differs based on the MSP’s particular vertical experience.

How Much Do Managed IT Services Typically Cost?

Right now, the going rate for comprehensive managed IT services (those offered by High-Level MSPs) in the United States is around $100 to $150 per month for one individual. If you’re looking for more advanced cybersecurity solutions and consulting, pricing may be closer to $200–$250 per month per user.

This means that a small business of around 20 people would be paying around $2,000–$3000 per month for managed IT services, depending on the level of solutions your business needs. For example, if you’re a healthcare organization of 20 users that requires more advanced security services due to HIPAA or PCI DSS compliance regulations, you may pay closer to $4000 per month.

Keep in mind that MSPs also provide different billing options. Some MSPs charge per person; others charge per server or computer. Others may even charge a flat fee. But no matter how the pricing model is set up, High-Level MSPs should offer similar pricing per month as each other. If you’re being offered a deal that seems too good to be true, it is. If the proposal seems far too high, make sure you ask for a service breakdown so you don’t overpay.

What Should You Ask an MSP During a Consultation?

To be sure you’re being billed correctly for High-Level managed IT services, it’s important to know what to ask your MSP in a consultation. Here are some questions you might consider asking:

What’s Included in Your Managed IT Services Package?

  • How often is your help desk open?
  • Can all of our employees call the help desk directly?
  • Will we be offered Security Awareness Training for each of our users?
  • Can you provide a breakdown of all of the services we get with this package?

What’s Your Experience in the Industry?

  • How many years of experience do you have working as an MSP?
  • Have you worked with my industry before?
  • How often are your technicians required to get regular training and certifications for the technology I use?
  • Do you use Multi-Factor Authentication (MFA) on all your tools?
  • What is your typical change management process?

Can I Get Client Referrals?

  • Can you provide me with two long-time client referrals?
  • Can you provide me with a client referral who is the same size or in the same industry as us?

Finding the best Managed Service Provider for your needs requires a little know-how, but once you’ve done your homework, you can make the best decision for your business. Just make sure to take note of the different types of MSPs, how their services differ, and the fact that all High-Level MSP pricing should be relatively similar. With these factors in mind, you’re well on your way to a great MSP partnership.

Published On: June 16th, 2020Categories: Information Technology

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