Managed IT Services

13 Things You Probably Didn’t Know About IT Services Costs

Published on June 9, 2021

Some managed services providers (MSP) are hesitant to tell an anonymous caller the real IT services costs for fear of leaking the information to their competitors.

You see, it is standard practice for companies to pretend as a customer and inquire about each other’s pricing. When you know what you are up against, it would be easy to quote a lower offer, especially when running after the same prospect.

The real deal about IT services costs

We investigated how MSPs price their products and how they price their IT services. The results will give you an idea of what to expect and watch out for when it’s your turn to outsource IT services for your business.

1. IT solutions providers with many clients can offer a lower price.

Their size allows them to scale or handle large volumes of work in a cost-effective manner. It also gives them leverage to negotiate for lower prices with software and hardware providers.

2. IT services costs vary because small businesses have different requirements.

Some may need a basic service package that includes help desk services, updates, and remote monitoring. Others may require specialized technical services such as threat intelligence or cloud hosting.

3. The price is generally the same for most established IT providers.

Some may cost more due to service scope, experience with different organizations, or customization according to specific client needs. However, as of March 2020, the standard US rate for outsourced business IT services ranges from $100 to $250 per person per month.

4. Surprise fees.

Don’t expect to pay for only those that you have stipulated in the chosen plan. There are things that the project does not cover, and the provider will charge you for them.

For example, if you subscribed to 40 hours of service per month, the provider will bill you once you’ve exceeded the pre-purchased hours. Services that a flat-rate plan does not cover include hardware setup, on-site support, and rushed response.

5. The most cost-effective payment model for startups is per user/month.

This mode of payment avoids overpaying and surprise fees. It assures you that each of your staff has the drive space, security monitoring, and technical support that they need while at work.

6. IT services costs are incurred when you transition to a new MSP.

Most companies using outsourced IT support do not realize the cost involved when transitioning from an internal IT department or switching from one vendor to another. The scope of the outsourced services determines the expense.

7. A business organization with at least 40 employees and no on-site servers could spend around $48,000 per year on IT services costs.

It would be best if you got a detailed monthly breakdown of the costs and the specific services included in the package. It will allow you to know what you are paying for and make precise plans for future expansion.

8. One-time charges.

There may be additional charges for such things as an emergency on-site visit for issues that the provider can’t resolve remotely. A provider will also bill you for special project inspections or attendance during a company’s strategic planning sessions where IT support is covered.

9. You may choose from different billing options.

IT providers bill their clients in different ways. They range from per person, per computer or server, a flat rate for everything, fee-for-service, per hour as needed, renewable monthly service contracts, or weekly support.

10. Each time you change something in the plan, there is a corresponding cost.

A provider of IT professional services sticks to the plan and charges even a minor change that you make. So if you’re the one putting together and managing outsourcing agreements, be careful not to introduce any changes, especially if you have a tight budget.

11. IT consulting is expensive.

Nowadays, it has become a trend for consultants to lead managed business IT services. IT consultants charge from $85 to $125 per hour of onsite support. While they bring added value, they can send costs rising, which can cause concern for clients, especially startups.

12. You could be paying for something you no longer need.

As your business grows and priorities change, there would be elements in your existing contract that may have become redundant. To continue paying for it is an unnecessary expense. You can avoid it by conducting regular audit and removing services that your business no longer requires.

13. Adapting to emerging technology can be incredibly costly.

Innovations in technology are happening so fast, and businesses have no choice but to adapt or become obsolete. Traditional business IT services can become more effective with AI or machine learning, making data analytics more accurate. However, upgrading to next-generation technology needs lots of investment in time and money.

The right MSP tells you everything that’s included in your IT services costs

Getting a third-party provider to manage your business IT services is a smart move because it cuts costs compared to having an in-house IT department. However, you need to make sure that what you pay for is being delivered.

You must also be aware of the exact scope of the IT services you have outsourced to avoid additional costs. Otherwise, you could nullify the savings that got you into an outsourced relationship in the first place.

Talk to a CyberHAWKS expert to get a complete rundown of available services and their costs and how you can leverage them within your budget.

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