2022 Managed IT Services Cost & Pricing Guide for California Businesses
How Much Does Managed IT Services Cost?
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.
That's why we created this guide. To help walk you through different pricing strategies and costs you can expect.
What is Managed IT Services?
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 is 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.
All-Inclusive Managed IT Services
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.
Co-Managed IT Services
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.
Pricing Managed IT Services
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 $350 per user, per month.
In this case, “per user” refers to employees who use technology to do their job – that is, if you have 30 employees who use IT devices for work, be it PCs, laptops or tablets, you’ll pay for 30 users. Where your company stands on this $99/month to $350/user/month price range depends on the scale of the services you require.
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Cheapest Managed IT Services
The very lowest end of the managed IT services spectrum involves pure monitoring services, which usually run around $99-150 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 $175 to $350 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?
(Most Popular Managed IT Services for Small and Midsize Businesses)
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 $150-175 per user depending on the specific services that are included.
Highest End of the Spectrum
At the very top end of the price range, packages at the $250-400 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.
You can also expect these types of numbers if you include advanced cyber security services or have an agreement that includes project labor.
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Factors Affecting IT Support Pricing
The biggest factors 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 won'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.
Here are just a few of the technologies that are considered for pricing complexity:
Workstations and Servers
Laptops, Tablets, and Smartphones
Wifi for Guests and Internal Users
Services Onsite and in Data Centers
Remote Site Connectivity
Regulatory Compliance Needs
Cyber Security Tools & Requirements
Internet Service Providers (ISPs)
Number of Offices & Locations
How Much Will My Managed IT Support Cost?
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.
Here are a few questions to help get you closer to a ballpark number, and to ensure managed IT firms can give you a more accurate quote:
- Do you want to have internal IT staff?
- Do you want to pay a flat amount each month, or is a low monthly fee with varying additional charges okay?
- How complex is your technology environment? (This is a bit of a trick question, because it can be in the eye of the beholder – it’s not uncommon for someone to call us and say that they have a simple IT network only for us to find out that the company’s needs are MUCH more complex from a technical perspective than they ever knew.)
- Do you want remote and onsite services?
- Is your network in the cloud or on-premise?
- Do you have regulatory compliance requirements, such as HIPAA, ITAR, NIST, or CMMC?
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An Important Note on Buying Managed IT Services
While there may be similarities in the naming convention between providers, there is no standard “part number” for managed IT services agreements.
It’s important to understand that the EXACT services that each IT company offers will be different, EVEN if the service packages are named the same thing.
So be sure the vendors you’re interviewing are being transparent in what you’re ACTUALLY GETTING with each service.
Need help evaluating IT providers? We're happy to help, whether you choose to use our services or not. Give us a call any time at 800-481-4369.
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