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5 Factors That Affect Managed IT Service Pricing

5 Factors That Affect Managed IT Service Pricing

10 MINUTE READ

5 Factors That Affect Managed IT Service Pricing

One of the most frequently asked questions in the Managed IT industry continues to be about pricing. Many small to mid-sized businesses we talk to think they could never afford to outsource their IT services. Despite these initial worries, it has been proven that by choosing a package that fits their needs, most, if not all, businesses can afford these services.

But, how much does it actually cost? There are a lot of factors that play into the cost of Managed IT because it is truly dependent on your specific needs. Below we walk through a few of the top factors that affect Managed IT pricing and how to save some money, while still getting everything needed for your business.

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SKIP THE LINE:
Package Inclusions
Number of Employees
Location of Servers
Data Volume and Backup Frequency
Contract Duration
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1. Package Inclusions

Managed IT Services - Which package is best for your business?

All-Inclusive Package

Providers’ all-inclusive packages can vary from one to another, but the following is a typical list of inclusions. In most cases, this package is suited for offices with 10 to 74 workstations.

Monitoring and Management

  • Manage the health and status of workstations/servers
  • Maintain software updates
  • Proactively track and resolve issues
  • Automate tasks pertaining to network and system health
  • Remotely install and configure software

Cybersecurity

  • Monitor and update all hardware and software to the latest versions
  • Manage firewall rules and definitions
  • Monitor network and review logs for signs of intrusion or potential security breaches
  • Remediate threats

Helpdesk

  • Remote support for work stations and servers
  • Support for software such as Windows/Office/etc.
  • Ticketing system to track and prioritize issues
  • Quick access to IT experts
  • Decreased downtime

Backup/Disaster Recovery

  • Utilize the 3, 2, 1 method of Backup Disaster Recovery
  • Quickly reestablish access to data
  • Recover all data or bits and pieces

Pricing for all-inclusive packages is typically based on the number of workstations and servers within the office. It can range from $100 – $150 per workstation and is typically around $200 per server rental. On average, for a 25 workstation and one server office, it would cost around $2,700/month, with prices varying slightly based on the provider and inclusions.

Per-User Package

The per-user package option is great for smaller companies that may not need an all-inclusive package. Keep in mind that if technical support is not often needed, you may be overspending with the per-user pricing model. This pricing model is discussed further in the Number of Employees section of this article.

In our conversations with multiple companies, we have heard stories about previous companies operating on a per-user basis and how each support call or site visit adds to the overall cost of the project. Knowing this, we always recommend that you read the fine print on any service contract to fully understand the service fees prior to signing.

Per-Device Bundle

Does your company already have some internal IT support, but want to protect higher-level employees’ devices? Then this option may be for you. The per-device bundle typically sways more on the a-la-carte side with varying prices based on the number of devices, among other factors.

Related Article: 3 Steps to Help Secure Your Systems Amid Worldwide Cyber Threats

 

2. Number of Employees

When moving forward with a per-user or per-device bundle, the number of employees at a company is one of the key components of pricing. Note that while it may be one of the initial factors in an all-inclusive package, with transparent monthly fees you do not have to worry about unknown price changes as your company structure changes.

Per-user packages typically calculate the number of users using employee email addresses or a list of active employees. Occasionally, you will see managed IT providers who base their pricing on both the number of users AND the number of devices. Any service provider you wish to receive a quote from should disclose this portion of the price structure upfront. Based on the services in the selected package, per-user bundles can have a large range of pricing from $50 per user all the way up to $400.

The best defense is a good offense - cyber security ad

3. Location and Number of Servers

Location and number of servers can be where the price of any of the above services drastically increases. Keep these questions in mind when determining whether your team will fall in the high or low end of this pricing:

  1. How many servers are currently set up for your office?
  2. Will you need additional servers?
  3. What functions do your servers perform?
  4. Are your servers on-site or off-site?

The cost of purchasing a single server outright in 2021 can start at $1,500 and go all the way up to $4,000. For this reason, renting a server from an MSP (Managed Service Provider) can often be the most cost-effective option with monthly rental fees (often included in your managed IT package) ranging from $40 – $300/month.

Related Article: 5 Reasons to Outsource Your IT Services

 

4. Data Volume and Backup Frequency

It is important to be completely transparent when discussing the amount of data an MSP will manage and backup. Keep this in mind when moving forward with a service provider who has a per-user or limited per-device package format.

Consider if you want your data backed up every 15 minutes on-site, replicated to a cloud, and/or verified every night. This level of data security will increase the cost of your IT package. The cost of each data backup proposal depends on the degree of complexity, from simple to elaborate.

5. Contract Duration

As with most service contracts, the duration can play a big part in overall pricing. There are a few things to consider before ultimately signing the cheapest deal with the longest term length. What happens if you need out of the contract? With a 1-Year contract, there is less of a time commitment and it is easier to wait out the term if there is an issue. If you decide to go with a 5-year contract, there may be a fee associated with exiting a bad partnership early. For this reason, we typically see 3-year standard contracts that are both cost-effective and time conscious. At the end of the day, the contract duration and cost savings are all about what you are comfortable with as a company.

 

Want a customized solution based on your needs? Not quite sure where to go from here? Let the experts at Ford Office Technologies give you a hand at 1-800-633-3673 or by emailing info@fordtech.com

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