How Much Do Managed IT Services Cost? IT Pricing Explained
Unexpected traffic jams. Hot water running out during a shower. Technology not doing what it’s supposed to do. Don’t these things all have a special way of making you instantly frustrated?
You might not have much control over the freeway or the shower, but there’s a simple way to eliminate your techno-woes—especially if your business relies on technology running smoothly.
It’s a bird. It’s a plane. It’s an MSP!
(All the ways they’re here to help you)
In the world of IT, you might recognize the abbreviation MSP meaning Managed Service Provider.
MSPs exist to save you from IT headaches. Often, when there's trouble, your MSP can show up at a moment's notice any hour of the day, any day of the year. They can rescue lost data and even protect your network speeds from slowing down.
The best MSPs don’t just respond to issues, they also proactively monitor and test your systems to resolve potential issues to prevent downtime. MSPs can even play a big role in streamlining your technological infrastructure and finding ways to enhance your operational efficiency.
5 Popular MSP IT Pricing Models: The Pros and Cons
It’s easy to see how an MSP might help reduce the quantity and severity of your IT-related headaches; but when it comes to navigating managed IT pricing models, it’s easy to get lost.
Let’s equip you with an easy-to-read map of the pricing models you're most likely to encounter in your search for a managed support provider.
One of the most common IT services pricing models charges based on the number of seats (users), devices (like computers and servers), or staff members in your organization. The cost scales with your needs and may vary depending on factors like network complexity, the number of locations, and the age of your infrastructure.
| Pros | Cons |
| Straightforward You’ll know exactly what you’re paying for based on your usage metrics. ScalablePricing adjusts as your business grows or changes, offering flexibility. TransparentEasier to budget and plan expenses with a clear cost per unit. | Lack of CustomizationBusinesses with diverse needs might struggle with a one-size-fits-all approach. Potential for OverpaymentFluctuating usage can lead to paying for resources you don't fully use, so keeping current information for your quarterly business review with your MSP is crucial. |
When you encounter this model of IT services pricing, approach with a more scrutinizing eye.
With this model, MSPs offer an attractive basic package with low per-seat pricing; additional services or features are available as add-ons at an extra cost. Although pricing can appear attractive at first glance, beware of bait and switch tactics.
These low initial prices often cover only a bare-bones type of basic service. Soon, other essentials will be needed but must be purchased as add-ons, inflating the overall cost.
Remember: to conduct a comparison with other pricing models, divide the total monthly bill by the number of seats to find the true price-per-seat.
| Pros | Cons |
| Cost-Effective Entry PointBusinesses with limited budgets can start with essential services and gradually add more features as needed. CustomizationClients can tailor their service package according to their specific requirements, avoiding unnecessary expenses. | Cumbersome BillingManaging multiple add-ons can make billing and invoicing complex, potentially leading to confusion. Cost EscalationWhile the base price may seem attractive, the cumulative cost of add-ons can exceed the budget if not monitored carefully. There's a larger potential to overpay as the MSP adds “complex” features. |
Under the Time & Materials IT pricing services model, clients are billed based on the actual time spent by the MSP on providing services, along with the cost of materials or resources used. Although this model offers transparency, many MSPs are shifting away from it due to its time-consuming nature.
| Pros | Cons |
| Cost TransparencyClients get a clear view of the exact breakdown of costs, making it easier to understand spending. FlexibilityYou pay only for the services you use, making it suitable for projects with unpredictable timelines or scopes. | Lack of Proactive SupportThis model tends to be reactive—more of an “IT Paramedic” approach—limiting the ability to maximize technology efficiencies and productivity gains. Budget UncertaintyCosts can fluctuate significantly depending on the time and resources needed, making it hard to predict expenses accurately. Potential for OverbillingRisk of inflated bills if the MSP's time tracking and reporting aren't transparent. Hesitation to Call ITStaff may be reluctant to contact IT support knowing it will cost the company money, leading to unresolved IT issues. |
With this model of managed IT services pricing, clients purchase a set number of hours in advance to use for support or services as needed. Once these block hours are used up, additional blocks can be purchased.
| Pros | Cons |
| Cost ControlPre-purchasing a set number of hours at a discounted rate helps manage IT expenses more effectively. Priority ServiceClients with block hour agreements often get faster response times, especially during emergencies. | Unused HoursIf the purchased hours aren’t fully utilized within the specified timeframe, they go to waste. Limited FlexibilityEstimating the number of hours required in advance can be challenging for businesses with unpredictable IT needs. Hesitation to Call ITSimilar to the Time & Materials model, staff may avoid calling IT support to save hours, leading to unresolved IT issues. |
Under this comprehensive model of IT services pricing, MSPs offer a bundled package that includes a wide range of services such as maintenance, support, security, and monitoring, all for a fixed monthly or annual fee. This approach provides clients with a clear picture of expenses and helps them enjoy predictable pricing. At TLC Solutions, we prefer this model and enhance it with tiered all-in pricing to meet various client needs.
| Pros | Cons |
| SimplicityA single, predictable payment that covers all IT needs, eliminating the hassle of managing multiple invoices. Proactive MaintenanceMSPs are motivated to keep everything running smoothly since any issues or downtime are included in the package. TransparencyA clear picture of expenses, making it easy for clients to understand exactly what they are paying for. | In our humble opinion, there aren’t many, but one possible con may be: Scope LimitationsWhile all-in pricing covers your daily business needs, specialized or project-based services may not be included, leading to additional expenses. *This can be avoided by having a clear understanding of your business needs. |
Our All-In-Seat Packages at a Glance
At TLC Solutions, we've put together a range of service packages that provide comprehensive IT support for every level of requirement and budgets. Whether you're a small business looking for essential support or a large enterprise that needs extensive coverage, our tiered packages make sure you get the right level of service.
| Essential | Enhanced | Premium | Enterprise |
| End-user support and Maintenance24/7 Server, Cloud, and Network MonitoringHardware, software, and 3rd party vendor managementOn-site Remediation to be billed at a reduced hourly rate | Essential Package IncludedOn-site Support IncludedDedicated Client Solutions Enablement and Client Care Representatives7am-5pm PST Help Desk SupportBackup & File Recovery Up to 1 TB of Offsite Retention | Essential Package IncludedvCIO ServicesQuarterly Technology Business Reviews (TBRs)Technology Roadmap developed by vCIOFree Ideation Session with Enterprise Software Team + 4 hours of Professional Services included on the first project | Premium Package IncludedCovers multiple locations across North America and over 200 usersCSE, CC Manager, SA, Technician + local POD support at each locationPST – EST Help Desk Coverage (8am – 8pm EST)Free Ideation Session with Enterprise Software Team + 8 hours of Professional Services included on the first project |
Conclusion
Choosing an MSP with a clear IT pricing model is crucial for managing your expenses and ensuring your business runs smoothly. Now that you have a better understanding of the pricing options you’ll encounter, you’re better equipped to find the best fits for your needs and budget.
We believe in the power of all-in-seat pricing to provide transparency, simplicity, and predictability for our clients. Our tiered packages are designed to meet a variety of needs, ensuring you get the most value from your IT investment—no matter the size of your business.If you’re ready to take the sting out of your IT headaches, contact us and let’s discuss how our MSP solutions can help your business thrive.
