Have you ever wondered why MS pricing is all over the place? Perhaps you’ve launched a new service and tried to do some research in order to set an accurate price, only to discover that the price tag for similar services from other companies varied so widely you couldn’t figure out how much you should charge. Maybe a potential customer has asked for a price quote, only to let you know later on that another MSP offers the same services as you but at a much lower cost.
If you need help setting prices, the following guide is sure to come in handy. It also offers some great explanations you can give clients and potential clients who ask about your prices.
Cost Per User
Experts note that top-tier managed service providers charge $125 to $150 per user, per month. The “per-user” package is comprehensive. It includes not only monitoring but also 24/7 support, proactive IT assistance, emergency repairs, and more. All the devices a single employee uses for work purposes are included in the package, as is IT cybersecurity training and testing.
However, some new IT companies charge less than the average fee listed above to be competitive and gain a foothold in the market. An MSP that works with a business that has tens of thousands of employees may likewise offer a discounted per-user fee. Alternatively, IT companies that offer specialized services to certain industries may charge more than $150 per user because their unique services aren’t typically available from other IT MSPs. The above-mentioned average is a general guide, not a set standard.
The main reason why prices vary wildly in the MSP industry is that service packages also vary wildly. Common service models are:
- The break-fix model. MSPs often charge a fairly low fee for break-service contracts but you won’t get much from these deals. In a break-fix contract, an MSP essentially acts as an emergency repair company and fixes a client’s hardware, software, and/or network when things go wrong. No other services are provided. The average cost of a “break-fix” service contract ranges from $125 to $225. It’s likely that geographic location and the nature of the devices/network/apps covered under the model determine how much an IT service will charge.
- “Per-hour” service model. Some MSPs offer a “per-hour” service model. A company chooses which jobs the IT service will work on during the set time period, pays for a set number of hours at the beginning of a month, and the IT company then puts in the required hours. This model can work well for businesses that don’t need much IT support but it’s far from ideal for companies that need more than just basic support and assistance. It is said the average cost ranges from $70 to $80 per hour, but bear in mind this is a median price. Put simply, about half of all tech services charge less than $70 while the other 50% of tech services charge more than $80 per hour. The services included in the “per-hour” package will likely determine the ultimate price.
- Co-managed services. Many companies have their own in-house IT expert or even a fully staffed IT department. Even so, that doesn’t mean they don’t need additional IT assistance. Co-managed IT services enable a company to gain access to additional IT expertise and manpower to improve IT operations, cybersecurity, and more. There is no average cost for such services as co-managed service packages are customized to meet a client’s needs.
- “All you can eat” services. As the name implies, an “all you can eat” package gives you access to everything a company has to offer. There are no time or service limits. The IT company is at your service 24/7/365. IT companies typically set a fixed monthly fee for such packages to make it easy for clients to budget and pay for the needed services.
As you can see, IT MSP prices vary depending on geographic location, services provided, and a client’s chosen service model. As an IT managed service owner, you’ll want to assess average local prices for any given service and set a price that is competitive in the local market and that enables you to keep your business running smoothly. Don’t be afraid to charge above the average market rate if you offer specialized IT assistance; conversely, consider lowering your prices if you find that the cost of your services is indeed too high.
As IT trends and technology changes at a rapid pace, you’ll likely want to regularly assess not only your prices but also your services to ensure you’re meeting your client’s current and long-term needs at a cost both you and they can afford.