How Much Does Managed IT Services Cost?
Note: The costs below are typical prices you can expect to pay for managed IT services in the Greater Los Angeles, Orange County, and Inland Empire areas.
You’ve probably heard about how managed IT services saves businesses money and are wondering if that’s possible for your organization too.
It’s frequently the most labor-efficient IT solution, allowing businesses to outsource the IT function to experts who are trained to handle all kinds of IT issues – from the simple to the devastatingly complex.
But getting to the exact pricing managed IT services presents a bit of a challenge for small and medium-sized businesses. Running costs and financial due diligence are a major concern for small businesses, and unfortunately, pricing for managed IT can seem frustratingly opaque.
Before we can discuss how much managed IT will cost, we first have to define what “managed IT services” even is.
The term gets thrown around a lot these days, and many providers in varying industries often have some sort of “managed” product. So what are managed IT services?
Managed IT Services is an umbrella term for a massive range of services, but at its essence, it is external experts assuming responsibility for some or all of your IT operations – literally, they “manage” portions of IT services for you.
For some companies, it makes most sense for the managed IT team to essentially act as the company’s IT department, handling ALL of the company’s IT needs – from collaborating with leadership on the strategic IT business plan to helping install the latest update to the accounting software.
In other cases, it makes more sense for the external IT team only to manage specified sections of the IT matrix. Their role may be limited to supporting the client’s internal IT team for only the most complex of IT issues, or it could include all of the routine, daily maintenance tasks, such as backup administration and IT security.
When there’s that much variability in managed IT services deliverables and responsibilities, you can expect significant variation in the PRICE of managed IT services as well.
This is why it’s impossible to give a single, straightforward answer when faced with the question, “How much do managed IT services cost?” The answer truly is “It depends.”
But before you throw up your hands in disgust and dismiss this article as a waste of time, let me reiterate – just because pricing is variable does NOT mean it is opaque or unreasonable. What matters is that the criteria for pricing are clear and accessible.
In general, the price range for managed IT service packages run from $99 per month to $250 per user, per month.
In this case, “per user” refers to employees who use technology to do their job – that is, if you have ten employees who use IT devices for work, be it PCs, laptops or tablets, you’ll pay for ten users.
Where your company stands on this $99/month to $250/user/month price spectrum depends on the scale of the services you require.
The very lowest end of the spectrum involves pure monitoring services, which usually run around $75-150 per month.
At this end of the scale, the managed IT team simply acts as a security guard – they watch your server closely and if something goes wrong, you’ll be alerted immediately. You can then choose to take remedial action yourself, or pay additional fees for the external expert to take over and implement a solution.
As you can probably see, this type of service is not terribly useful. It’s also not very cost-effective, because you’ll have to cough up extra cash to get the experts to fix the problem(s). This can get expensive and frustrating if breakdowns are common (e.g. where infrastructure is outdated or over-capacity), or if you find yourself in need of additional services, such as end-user remote or onsite support, IT security services, or strategic planning for future growth.
Hourly rates for those types of services can range from $75 to $275 per hour.
Sometimes you can negotiate a certain block of hours and prepay as part of a contract, but do you really want to have to pick and choose which IT problems should be resolved now and which are going to have to wait until next month?
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That takes us to the mid-to-high range of the managed IT services cost spectrum, where managed IT specialists not only monitor for IT concerns, but also take the initiative to solve problems. And in many cases, PREVENT them from arising in the first place.
For example, the IT company will run cybersecurity tests daily to identify loopholes in your security infrastructure. If any are spotted, hardware or software upgrades may be implemented to plug these gaps.
These types of agreements also generally include round-the-clock IT support (unlimited in some cases), IT planning, strategy and design services, backup and disaster recovery procedures, and a combination of on-site and remote support – all for a single flat fee.
These agreements can either be priced per technology device or per user.
Common “per device” pricing ranges from $100-400 per server, $50-100 per workstation, $30-75 per firewall, and $15-40 per switch. There are many more devices and varying prices, but those are the most common.
Common “per user” charges for these types of agreements range from $75-175 per user depending on the specific services that are included.
At the very top end of the price range, packages at the $250 per user/per month mark are generally fully hosted, or cloud systems. This is where your IT company provides most, if not all, of the infrastructure (or “guts”) of your system, and you pay a monthly fee for usage and similar support services as the mid-to-high range.
The biggest factor in determining managed IT services prices is the type of services provided and the level of involvement required from your managed IT services team.
An externally-managed but fully-integrated IT support team will cost more in flat-fees than just monitoring services, but you also don’t have to worry about paying thousands of dollars in variable extra charges. And you’re also getting WAY more – you essentially get an entire IT department!
The complexity of your infrastructure is also an important consideration for pricing managed IT services. The presence of technology devices and systems, such as the ones below, help managed services providers determine how complex your business IT environment is and price their services accordingly.
Finally, the big question – how much will your managed IT services cost?
That’s going to be very difficult for you to figure out on your own without contacting IT service providers for full descriptions of their services, but here are a few questions you can ask yourself to help get you closer to a ballpark number, and to ensure managed IT firms can give you a more accurate quote: