In a world where nothing is built to last and good, affordable IT support seems to always be in short supply, outsourcing your IT Department has become the best solution for some companies. But what is outsourced IT support? And how much does it cost?
What is Outsourced IT Support
Outsourced IT Support is a team of experts you can turn to for help with all your IT needs. The team of experts is available 24/7 and they can help you with any IT Issue – from designing, procuring, and installation of hardware and software, to training your team, to fixing your computer when it breaks.
Outsourced IT support is a contractual agreement in which an organization allows another company to manage its IT systems. The company hires an outside firm to do their work for them. This saves money and time for the hiring company and enables it to utilize a cost-effective team of experts who have an extensive background in the field.
How Much Does Managed IT Services Cost?
While the costs vary depending on several factors and the services are chosen, many companies find that managed IT services cost less than maintaining an in-house IT staff.
Here are some of the main factors that affect managed IT services costs:
1. Your company size
If you’re a small company, you likely don’t need 24/7 monitoring or a large team to respond to your needs. These needs increase as your organization grows. Businesses with 1,000 employees or more typically require a larger team, which increases the monthly price tag.
2. Your industry
Some industries have more complex technology needs than others do. Healthcare and financial services organizations have very specific security requirements, for example, which can increase costs.
3. Services included in your package
You can choose from a variety of managed IT services so you only pay for what you need and can remove services that aren’t beneficial to your business goals. In general, basic plans start at $1,000/month while advanced plans may be closer to $6,000/month or more.
4. The level of service required
Higher levels of managed IT services will incur a higher monthly fee. Here are standard service levels: (1) The basic service level. This includes 24x7x365 monitoring and management of servers and network equipment, as well as proactive maintenance to reduce downtime and improve system performance. (2) Service plus or level 2. This includes everything at the basic service level as well as a host of additional features such as security patch management, anti-virus management, and hardware replacement. (3) A high-level managed IT solution for business-critical situations where the highest levels of system uptime are required are usually offered for larger teams or businesses that have specialized needs. This includes end-to-end management.
5. The number of users covered by the service contract
On average, most companies pay around $1,000 per month for managed IT services. However, smaller businesses can expect to pay between $70 to $150 per user each month, which often includes remote monitoring and support. Larger businesses may pay as much as $300 per user each month for managed IT services.
6. The number of devices covered by the service contract
The cost of managed IT services depends on the number and type of devices covered by the service contract. A company with 20 desktops, one server, and four network devices can expect to pay $2,000 per month for comprehensive managed services.
Average Cost
The average cost of managed IT services is between $80 and $150 per user, per month. This pricing structure is usually based on the number of users (not the number of devices). For example, if you have a team of 10 people, the cost for a managed IT package would be anywhere between $800 and $1,500 per month
This price range will vary depending on the size of your business and the services you require. For example:
- Small businesses usually pay less than $100 per user
- Mid-sized companies usually pay between $100 and $120 per user
- Large businesses usually pay between $120 and $150 per user
Pricing Models
The many pricing models of managed IT services can be confusing, especially to a business owner who isn’t familiar with the IT industry.
To make it easier, here’s a list of the most common and important pricing models, along with some tips on choosing the right one.
1. Break Fix or by the House
With the break-fix model, you only pay when they actually do something for you. You’re paying only for the work that’s done, not paying in advance or making any sort of commitment. This can be a disadvantage if:
- Problems can’t be fixed quickly, so cost a lot to fix.
- If problems happen a lot, you pay over them again.
- This makes it difficult for you to plan your budget.
- Rewards reactive behavior, when you should really be proactive.
- Encourages some IT providers to take longer to fix things than they should.
2. Fixed Fee or Flat Fee
The Flat Fee pricing model has been the most popular pricing over the last couple of decades. The premise of this strategy is to have a single, fixed monthly fee per user or device. This model provides transparency and predictability with regard to IT Support costs. This is easier compared to the hourly billing model which fluctuates from month to month or quarter to quarter depending on how much IT work is required.
3. Per User, Per Device
You pay a fixed fee each month for each person in your company, and for each computer and phone, they use. This is convenient because it’s easy to understand.
In other words, if the client has 5 users and 10 devices, the total cost will be:
(5 users * cost/user) + (10 devices * cost/device) = Total Cost.
