Quick Guide to Managed Service Pricing

Guide to Managed Service Pricing

If you’re looking to hire an IT managed services provider (MSP), you might be wondering why there are so many different managed service pricing models and what they all mean. Some IT managed services providers use a tiered model of pricing (gold, silver, bronze, etc.). Others might use a per user or per device pricing model. Some have an option where you can get one specific service, others allow you to access all their services for a flat monthly rate. There are also hourly rates and even advance billing options in some cases.

These options can be confusing. Here are the most popular pricing options for managed services pricing.

Hourly service

In addition to a managed service plan, most MSPs also charge an hourly rate for any services they provide that are outside the scope of the plan. Normally, these hourly services are billed on top of the managed services package that a client suggests. They can also be packaged or bundled – for instance, you might pay for 10 hours of service upfront (find out why we think that is a bad idea).

Tiered Pricing

Many MSPs offer some variation on a tiered pricing model. Tiered pricing bundles services together, allowing vendors to provide different levels of service to meet different customer needs. For instance, a three tiered model might include a bottom tier that simply includes remote monitoring and support during regular business hours; a middle tier that includes on-site support as well, and a top tier that includes remote and on-site support during emergencies or after hours.

Service-based pricing

IT managed services providers can provide services on an individual basis (for instance, just remote monitoring). Service-based pricing can be provided as a stand-alone service or as an add-on to a tiered service or all-in-one service package.

User-based pricing

Some MSPs offer user-based pricing that charges a set monthly fee for each user.  User based pricing makes it easier to keep track of billing as people’s device usage changes and helps keep pricing more consistent, regardless of whether an office-based user has a single desktop and mobile phone, or several devices and works via remote or is traveling frequently.

Device-based pricing

An alternative to user-based pricing is device-based pricing, where a monthly fee is charged to support each device. MSPs that offer this pricing model might charge $75 to support a mobile device or printer, $100 to support a desktop or laptop, $1,000 to support a network or server, and so on. As businesses grow and mobile devices proliferate, this kind of device based pricing becomes less cost effective.

Package pricing

Many businesses are looking to gain predictability with their managed services pricing – this is true of the MSPs as well as their customers. Offering MSP services as a complete package, such as Tolar Systems’ Complete Care, allows MSP’s to gain a predictable revenue stream and it allows customers to know what their IT services are going to cost them every month. This pricing model is typically all-inclusive, incorporating remote and on-site service, continuous monitoring, data and network security, access to cloud applications, network connectivity, and much more – it includes all the IT needs of a business.

When selecting a managed services pricing plan, there is a lot to consider. If you have questions about which managed services pricing plan makes the most sense for your business, contact Tolar Systems today for a free assessment.