How Much Does An MSP Cost?
Managed service providers (MSPs) are becoming increasingly popular among businesses of all sizes who are looking to outsource their IT management. MSPs offer a range of services to help businesses manage their IT infrastructure, from network and security management to data backup and recovery. However, not all MSPs are created equal. So, how much does an MSP cost?
It really depends. At some MSP firms, the cost of managed IT might be lower than others, but is it worth the savings?
A Chevy and a Cadillac. They are both cars and will take you where you need to go, however can they do it in significantly different ways. Likewise, there are significant differences between a “Chevy” MSP and a “Cadillac” MSP firm that can impact the quality of service you receive. In this article, we will explore the top 5 differences between a budget MSP and a full service MSP, and how to choose the right MSP for your business needs.
Understanding the Cost of Managed IT
MSP services are designed to help businesses manage their IT infrastructure more efficiently and cost-effectively, since many businesses don’t have the time or resources to manage their IT needs in-house. MSPs offer a range of services, including support desk, network and security management, data backup and recovery, software management, and hardware support. One of the most important things MSPs provide is proactive monitoring and maintenance of your IT systems. This helps prevent downtime and ensures your business runs smoothly. MSPs can save you time and money by handling routine IT tasks and minimizing the need for expensive in-house IT staff.
Why Do Small Businesses Struggle with Managing Their IT Infrastructure?
Managing IT infrastructure can be an overwhelming challenge for small businesses. Here are the main reasons why:
- Lack of Time and Expertise: Small business owners often juggle multiple roles. Without specialized IT staff, they struggle to maintain and optimize their technology systems.
- Outdated Technology: Limited budgets can lead to reliance on older, less efficient hardware and software. This not only hinders productivity but also exposes the business to compatibility issues and increased downtime.
- Security Vulnerabilities: Without dedicated IT professionals, businesses are at higher risk of data breaches and cyber-attacks. Inadequate security measures can leave sensitive information exposed to malicious threats.
- Complexity of IT Systems: Modern IT infrastructures are complex. Managing networks, servers, and applications requires technical know-how that most small businesses lack.
- Cost Constraints: Investing in state-of-the-art technology and hiring experienced IT staff can be expensive. Many small businesses operate on tight margins, making it difficult to allocate funds for comprehensive IT solutions.
By understanding these challenges, small businesses can better navigate their IT needs and seek out cost-effective solutions, such as outsourcing IT services or investing in user-friendly, scalable technology platforms.
So, How Much Does An MSP Cost?
5 things to look for when comparing MSPs
- Quality of Service
Full service MSPs generally offer a higher quality and more variety of services than the budget MSPs. The full service MSPs typically have more experienced and highly qualified staff, better infrastructure, and use more advanced technology.
These full service MSPs also tend to offer more than just managed IT services. Some of these MSPs offer Professional services like AI solutions, application development and business process automation.
Other full service MSPs may offer solutions based on Workplace Technologies. This is ideal for businesses that are looking for digital transformation and a modern workplace.
Expect more of a bare bones approach to service from the “Budget” MSPs. They will strip down the fluff and will focus on delivering core services. These MSPs may have to partner with other teams for security or cloud services, however they can deliver quality results on core services (maintenance, monitoring, remote support).
- Response Time
One of the most common things we hear from potential clients is that they are frustrated with the time it takes to get a response from their current MSP for a support issue. When you submit a ticket, you’d like a quick initial response so you know someone is looking into your issue.
Full service MSPs will typically have more technical resources, which allows them to respond faster to IT issues quickly. These technicians will have a wider variety of knowledge to pull from since there is a bigger knowledge base. Full service MSPs also tend to have more sophisticated monitoring and management tools, which can help them detect and resolve issues before they become a problem.
- Customization
Full service MSPs usually offer more customization options than low-cost MSPs. These MSPs can tailor their services to meet the specific needs of business better. This is a result of resources and expertise.
They can also provide more detailed reports and analysis, which can help you make more informed decisions about your IT infrastructure.
The budget MSPs will most certainly make sure your systems are maintained and provide support services, however they won’t be able to deviate much from their core services.
- Security
Full service MSPs have the ability to provide better security tools and services than the budget MSPs. The reason for this is that full service MSPs can afford advanced security teams. A security team can offer more comprehensive security solutions who can identify and mitigate security threats more efficiently and effectively. Good things when it comes to cybersecurity.
- Pricing
Look for an MSP that provides transparent pricing and fits within your budget. Consider the overall value of the services you will receive, rather than just the cost.
What is the Price Range for Managed IT Services?
When considering managed IT services, costs can vary based on whether you're charged per user, per device, or per server.
Per User
- Expect to pay between $140 and $400 monthly for each user.
Per Device
- The price for each device typically ranges from $50 to $90 per month.
Per Server
- Managed services for servers average around $399 monthly.
These ranges provide a general idea, but the actual price may vary depending on specific services and providers.
How Can Businesses Reduce the Cost of Managed IT Services?
1. Choose the Right Service Provider
Selecting the right managed IT service provider is crucial. Look for providers offering customizable packages rather than one-size-fits-all solutions. Companies like Cisco and IBM often offer scalable options that can be tailored to your business needs.
2. Leverage Cloud Solutions
Utilizing cloud services can significantly lower your IT expenditures. Providers such as Amazon Web Services (AWS) and Microsoft Azure offer cost-effective cloud-based solutions that reduce the need for physical hardware and maintenance.
3. Implement Preventative Maintenance
Invest in proactive IT management to prevent issues before they become costly problems. Many managed service providers offer preventative maintenance plans that include regular system updates and monitoring, which can keep your infrastructure running smoothly.
4. Optimize Your IT Resources
Regularly audit your IT resources to ensure you are not paying for unused or underutilized services. Solutions like SolarWinds and Datadog offer tools that can help you monitor and optimize your IT infrastructure.
5. Take Advantage of Multi-year Contracts
Signing a multi-year contract with your managed IT service provider can often result in significant discounts. Providers like Dell and HP frequently offer lower rates for longer commitments, which can help your business save money in the long run.
6. Train Your Team
A well-trained staff can reduce the need for external IT support. Investing in training programs and certifications from organizations such as CompTIA can empower your team to handle basic IT issues internally, thereby reducing your reliance on managed services.
The Advantages of Partnering with an MSP That Offers Scalable Services
Partnering with a Managed Service Provider (MSP) that offers scalable services brings several key advantages to your business:
- Flexibility to Meet Demands:
- Businesses experience fluctuations in their needs; scalable services allow you to adjust your service level as those needs change. Whether you're experiencing rapid growth or a temporary slowdown, you can scale up or down accordingly without long-term commitments.
- Cost Efficiency:
- Paying for only the services you need ensures that you're not wasting resources. By scaling services to match your exact requirements, you make sure your budget is used effectively.
- Customized Solutions:
- Scalable services mean you get a solution tailored to your business size and growth phase. You aren't stuck with a one-size-fits-all service plan that may not align with your goals.
- Improved Resource Allocation:
- Adjusting services as needed helps in better resource management. You can allocate your internal resources more efficiently, focusing on core business activities while the MSP handles the fluctuating needs.
- Reduced Risk:
- The ability to scale services minimizes the risk of over-committing to a service level you might not need in the future. This adaptability reduces financial risk and operational pressure.
How It Works
For instance, if your business is launching a new product, you might need more IT support and increased cybersecurity measures for a short period. With a scalable MSP, you can temporarily boost these services and then scale them back down once the product is established. This means you're only investing in heightened services when they're truly needed, avoiding unnecessary expenses.
Should I Outsource IT Based on the MSP Cost?
When choosing an MSP, it is important to consider your business needs and budget. Here are some key factors to consider:
Service Level Agreements (SLAs)
Look for an MSP that offers SLAs that align with your business needs. Work with your potential MSP to craft an SLA that covers the most important facets of your business. SLAs should clearly define the services you will receive, response times, and uptime guarantees. These is where you can define your expectations from the initial get go.
Expertise and Experience
Look for an MSP that has experience working with businesses in your industry and has staff with the necessary expertise to support your IT infrastructure. One-man shops just don’t have the capacity to manage multiple clients and provide a high level of service.
Range of Services and MSP Cost
Look for an MSP that offers a range of services that meet your business needs. Consider the types of services you require, such as network and security management, data backup and recovery, and desktop support. Some MSPs can offer coding and application development as well. Consider your needs and make a list so you can be sure you are covered.
Customization Services and MSP Cost
Look for an MSP that can tailor its services to meet your specific business needs. The MSP should be able to provide customized reports, analysis, and recommendations that align with your business objectives.
Security and MSP Cost
Look for an MSP that has a strong focus on security. The MSP should have advanced security technology, experienced security staff, and offer comprehensive security solutions that align with your business needs..
Pricing and MSP Cost
Look for an MSP that provides transparent pricing and fits within your budget. Consider the overall value of the services you will receive, rather than just the cost. A budget shop may not provide a quarterly business review, providing insight into your business operations and budgeting.
Benefits of Managed IT Services for Small Businesses
Investing in managed IT services offers small businesses a myriad of advantages that can lead to substantial growth and efficiency.
Cost Reduction
Firstly, managed IT services can significantly reduce operational costs. By outsourcing your IT needs, you eliminate the need for an in-house IT team, which translates to lower salaries, benefits, and training costs.
Enhanced Productivity
With a streamlined IT infrastructure, your employees can focus more on their core tasks. This boost in productivity stems from minimizing downtime and reducing the frequency of technical issues.
Process Optimization
Managed service providers (MSPs) specialize in optimizing your business processes using the latest technology. This allows you to serve your customers more efficiently, improving overall customer satisfaction.
Improved Employee Engagement
Advanced and reliable technology not only enhances workflow but also boosts employee morale. When employees have access to the right tools and face fewer technical hiccups, their engagement and job satisfaction tend to rise.
Cybersecurity
In an era where cybersecurity threats are increasingly sophisticated, having expert oversight is essential. MSPs provide robust cybersecurity measures to protect your business data and shield you from potential breaches.
Strategic Growth Planning
A reputable MSP will assist you in planning for future growth. Their expertise helps in identifying scalable solutions that align with your long-term business goals.
Key Takeaways
- Cost Savings: Lower operational costs without the need for a full-time, in-house IT team.
- Increased Productivity: Employees can focus on core tasks, minimizing downtime.
- Process Optimization: Enhanced business processes for improved customer service.
- Employee Engagement: Better technology leads to higher job satisfaction.
- Cybersecurity: Comprehensive protection against increasing cybersecurity threats.
- Growth Planning: Strategic IT planning for scalable, long-term growth.
By leveraging managed IT services, small businesses can navigate the complexities of modern technology while focusing on what they do best—growing their brand and serving their customers.
