What are the costs for IT Support and Managed IT Services and what pricing model works best for your organization?
How much does managed IT services cost?
If you are a medium-sized business in the Twin Cities and possibly in the market for an IT support or Managed Services Provider, this is probably one of your first questions.
As a long-time IT Support and Managed Services Provider in the Twin Cities, we obviously get this question often.
And we get it! Price matters, your budget matters, and getting a handle on technology is such a critical part of your future.
As you might imagine, the problem with answering this question is that IT Support and Managed Services have so many variables that it can be hard to get the price of what IT and technology support will truly cost your organization.
Still, we will do our best here to give you clear and realistic price ranges and ideas as to what businesses of your size pay for IT Support and Managed Services in the Twin Cities.
So, let’s get to it …
How Much Does Managed IT Services Cost?
In the Twin Cities right now, you will find that IT Support and Managed Service Providers charge between $100 and $200 per user per month.
So you simply take that price per user, say $100 and multiply it by the number of users, say 30, and you have a cost of $3,000 per month.
And along with this monthly fee will usually be some type of onboarding or set up fee to get your company totally set up. Those startup costs average between $2,500 – $10,000+.
The frustration with these numbers
We understand the frustration with those numbers, as there is a big difference between them. And that is why we wrote this article, to discuss those factors that affect the cost so you can make an educated decision on the right IT support service for your organization.
Managed IT services costs can vary widely. As we mentioned, MSPs typically charge $75- $200 per user per month. Managed Service Providers that offer advanced security solutions and consulting charge between $100-$175 per user.
If your company has 30 employees and 1-2 servers and you do not need advanced security due to PCI or HIPAA, you will pay between $3,000-$5,500 per month. This is pricing from a mature MSP and usually does not include licensing and onboarding fees.
Per-user cost guidance:
$69-$89 per user
At this support level, the MSP usually provides IT Support for smaller companies with less IT sophistication. Typically, any additional work is considered outside of scope and is charged above and beyond the monthly Support.
Many of the issues discovered during the onboarding process are not corrected during onboarding. Instead, they are treated (and billed) after the startup. Unfortunately, the cybersecurity included with this monthly fee is minimal and offers simple coverage and a small firewall and antivirus.
And there is very little or no training at this price, and it typically lacks any technology strategy or roadmap assistance included at this price range.
$90-$110 per user
This level includes more strategy and planning in the agreement and some type of cyber-security. This increased cyber-security might be some type of security training for end-users. In addition, the contract will typically include an account manager who helps the client with strategy and planning.
$140-$150 per user
This level includes a more robust IT strategy and planning element – possibly with quarterly C-level meetings. And an increase in necessary cybersecurity protections, including many advanced features and, in most cases, some sort of IDS (intrusion detection system).
In addition, there is typically some form of monthly/quarterly cybersecurity training and some phishing testing used to provide the end-users with added cyber awareness.
$150-$175 per user
Along with everything listed in the lower price options, This level will include things like:
- Advanced application support
- Some project work included with the monthly fee
- Additional training included with the monthly fee
- High-level strategy, planning, budgeting, and C-level training included
- IT and Technology Road mapping
$200+ per user
Some MSPs can charge $200+/user/month. These engagements typically include some very high-level support of the main LOB (line-of-business) applications and higher-level end-user training. Many times, these relationships also include reporting and ROI measurement of the technology deployments. And have several different compliance issues involved, like HIPAA.
What are the main factors that affect the cost of IT Support?
IT services and Support have been around for over 25 years, and when it began, it was created in a break/fix environment. Technology would break, and the IT company would swoop in to the rescue and fix the problem.
This break/fix scenario started to change about 7-10 years ago because companies wanted to make these support expenses more predictable, as did the IT support industry. In addition, companies wanted to reduce computer downtime and wanted their IT support to anticipate these problems better.
The change to Managed IT Services
The change to Managed Services was not just a one-sided affair! Yes, IT companies wanted to do a better job of stopping problems before they occur, which has happened. However, IT support companies had no predictable revenue flow, and many IT companies in the Twin Cities and all over the U.S. did not survive because of it.
With the new Managed IT Services model, IT support providers are now aligned with their clients by stopping problems before they occur. In addition, IT support companies, now called Managed Service Providers, have a more sustainable business model, allowing them to improve their clients’ services.
And as you would expect, not all Managed Services and IT Support companies are created equal. The services that Managed Service Providers (MSPs) vary greatly, along with the price.
Getting to an exact cost number depends on a host of factors
They can include
- What is your headcount?
- Do you have a full-time IT employee?
- Total number of users and devices
- Are you in need fully managed IT services?
- Do you need co-managed IT services?
- Network monitoring
- Which cloud computing services do you use?
- What is onsite?
- Which industry?
- Where are you in your technology lifecycle?
- What is your cyber-security level?
- Equipment leasing or purchasing
- Email archiving and filtering
- 24/7 support
- Server and equipment maintenance
- Mobile device management
- Compliance considerations
- Applications management
- Remote site connectivity
- Business software
- Warehouse management systems
- Warehouse connectivity
- Specialized Applications
Even though that is a long list, it does not cover every company in every industry, so knowing your industry is a big plus with the MSP you choose!
As you can see, many factors go into the costs of IT Support. And it is critical to know exactly what you currently have and where you want to go!
When it comes to managed IT service cost, you need to know what you are getting (apples to apples)
- Do all employees get to call the help desk?
- Is cyber-security included or an added price?
- Which security applications are you getting?
- Enterprise endpoint security
- Network monitoring
- Cloud computing
- Do you get ongoing security training?
- Access to a secure ticketing system?
- Regular tracking of hardware and software
- 24/7 monitoring
- Dedicated help staff
- Annual Strategic Planning
- Business and digital transformation guidance
Onboarding and setup costs?
Most Managed Service Providers and IT support companies charge for onboarding, but some do not. But keep in mind, the ones that do not will recoup those costs one way or another will be factored in.
The onboarding fees are usually a one-time fee charged in addition to your monthly service cost. It is also typical for companies to waive this one-time fee if they sign a long-term agreement. But be wary of this because you must question their justification to do so. The most trusted companies will not push you into a long-term contract.
Some Managed Service Providers will make the onboarding costs equal to the first month’s charges, but make sure they can justify that, as those onboarding services are not the same as the monthly recurring fee. So they could be more or less.
Also, keep in mind there will be many overlapping project management issues, so you should not quickly pull the plug on your existing company until you are ready to handle the new one.
Important Note: Companies who do not charge onboarding fees will often try and lock you into a 2-4-year contract so that they can recoup those startup costs … one way or another; you will be charged for them.
In today’s climate, cyber-security is not a choice. It is the cost of doing business. Small to medium-sized companies are the #1 target for hackers because hackers know they are vulnerable.
And it may be surprising that only a handful of Managed Service Providers in the Twin Cities offer a fully layered cyber-security solution, so make sure you ask!
If you choose a lower-end, IT support company that charges under $100 per user a month, their cyber-security solutions will be far less than stellar and often leave you vulnerable.
Just make sure you know what you are getting … as the risk is yours!
Choosing the lowest monthly price?
We get it! In this current environment, with the Pandemic and current business climate, reducing expenses are critical. You absolutely can choose the lowest monthly cost you can find. You just need to be clear on what you are getting for that price.
Every company is now technology-driven and considered a digital company. And the IT support you choose will be at the core of your future. So make sure you look at everything!
The industry is full of what is referred to as trunk-slammers. These companies have a strong sales force and will tell you their lowest price beats everyone, and they are probably right. But you must know what you are getting. Typically, with such a low price per user, many of the things you will need are not covered, causing you to have sizeable, unexpected, and unbudgeted technology projects.
These companies will also lock you into a long 2-4 years contract and make it near impossible without legal action to get out of the agreement. And we are not saying that all lower-end companies are like this, but many are, and you just need to do your due diligence
One problem with the question: How much does managed IT services cost?
Of course, we all need to know the pricing of what we invest in, no question! But it is really that word ‘invest’ that you need to consider.
Companies mistakenly look at IT Support and technology as just a cost, a simple expense on a spreadsheet … and that is a misstep.
Technology itself is a tool. It is a lever to help people get more done, be more efficient, service customers better, help grow the company, and compete in a digital marketplace.
And with any investment, you need to get a handle on the ROI of your IT support and technology investments.
The most important question to ask is not what does IT Support and technology cost?
Instead, you should be concerned with what kind of return, profit, and growth you will see from the technology investments you make.
And we are not diminishing the importance of costs; it would be foolish to do so. But any investment without knowing its ROI is a questionable one.
Managed IT Services costs in the Twin Cities are typically between $100-$175 per user, depending on the services you need and the required cyber-security. Also, your companies size and scope, IT systems, and headcount are the highest cost drivers.
We hope this helps!
You now have a better handle on IT support costs here in the Twin Cities. So what do you do now? How do you choose?
Maybe these will help …
The 14 Key Questions To Ask When Vetting Any Managed Service Provider
Why is IT Support So Erratic?
Thanks, and good luck in your search!
If you are further along in your search for a Managed Services Provider and would like to start a conversation with us, click on this link, and let’s connect.
Start a conversation