Managed IT Services Pricing Models

What are Managed IT Services?

Managed IT services are tactical IT support services offered by an external organization, like system monitoring, help desk, and desktop support, as they are typically repetitive in nature and more specific to their technical architecture than the customer’s industry. Managed services IT pricing can be surprisingly competitive and frequently offers savings to an organization using its own in-house resources. This is because the managed service provider (MSP) supports many organizations with a large staff of experts and leverages their scale, enabling them to control their managed IT services cost for each service they offer.

Managed IT ServicesConsider data centre operation costs, which always seem to be increasing when managed internally. A managed IT service provider can take over all aspects of operation and support and offer a 24 × 7 solution monitoring and operations staff for which IT can budget, based on the provider’s managed IT services rates. The average cost of managed IT services for a customer is often reduced by bundling multiple managed IT service offerings from the MSP.

Managed services IT pricing will also vary depending on the complexity of the systems being supported as well as the size and location of the companies purchasing this support. Managed IT services rates can be based on a per-user, per-device, or per-service model and can be quite complex to navigate.

What Factors Determine Managed IT Services Pricing Models?

For IT systems support, managed services IT pricing structures will differ based on the type of support being provided and may be based on a per-user or device basis or based on the service(s) purchased. Managed IT services rates frequently depend upon the complexity of the support being provided and the level of automation that can be achieved. Services can be purchased individually or bundled to lower the average cost of managed IT services for even greater savings.

Finally, services purchased may depend on whether the goal is staff or shift augmentation vs. full outsourcing of an operations centre or NOC (network operations centre). Remote services vs. on-site support can also be arranged at different pricing levels.

For IT systems support, managed IT services replace or augment everyday operational activities, with the managed IT services support costs being based on the services selected:

Monitoring: managing operational indicators (alerts, warnings, operational messages) and taking prescribed actions for failures and warnings.

Computer operations and maintenance: applying patches, performing physical and operating system maintenance as prescribed by the environment, performing data backups, etc.

Managed IT services for end-user computing support can also be provided in a staff augmentation or full replacement model. These services are often offered on a per-device or per-user basis and include the following areas:

  • Help desk/service desk
  • On-site support
  • Remote technical support

Managed IT services rates for these areas will also be based on how they are delivered and the level of support. For example, help desk services are generally offered on a per-person supported or per-call basis. In contrast, remote technical support rates may vary based on response times and service levels contracted (tiered support model).

Managed IT Services Pricing Models

Managed IT services rates are generally broken down into different models to enable flexibility when defining offerings for client needs. Managed IT services costs are also based on service levels required, scale, and complexity of the operational environment. Standard managed IT services costs are typically quoted based on the following models:

Managed IT Services Pricing Models: Per-device

Monitoring, system maintenance, and on-site computing device support are typically quoted on a per device basis, enabling organizations to budget based on expected personnel changes and curtail costs.

Managed IT Services Pricing Models: Per-person

Arranging managed IT services rates for help desks and campus support on a per person/per month basis enables both the provider and customer to agree on managed IT services costs based on the number of people being supported.

Managed IT Services Pricing Models: Per-call

Call centre services are also frequently offered based on call volume. This managed IT services cost structure enables the provider to mitigate the risk of ineffective internal technical services teams as volume increases due to poor management and drive additional revenue to cover the need for additional staff.

Tiered support model

This managed IT service pricing model is generally for larger turn-key style operations, enabling organizations to manage costs by selecting service levels that match their needs and budget. This is frequently thought of as Gold-Silver-Bronze pricing models, where each tier has different response/resolution times. The managed service pricing tiers may also vary support during business hours and for 24 × 7 coverage. In this managed IT services cost structure, bronze might provide 6 am – 6 pm coverage with a four-hour response time while gold offers 24 × 7 support with one hour response time. This enables the customer to select the managed IT services rates that best suit their needs.

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Managed IT services pricing models available to customers can be understood by using the matrix below:

System operations and monitoring: Monitor and address issues with system status, runbooks, and routine operational jobs, generally relying on automation. Replaces or supplements the operations desk.

  • Per-device basis
  • Bundled rate based on scale and complexity
  • Tiered support models for staff augmentation

System maintenance: Ensure systems are operated and updated per specifications, patch management, security vulnerability management

  • Per-device basis
  • Monthly rate based on services, scale, and complexity

Monitoring only: Monitor and address issues with system status only

  • Per-device based
  • Tiered support models

Turnkey support: Full data center outsourcing including all the above services

  • Bundled rate based on scale and complexity
  • Tiered support models

Bundling services and turnkey support options also enable customers to have flexibility in managing their managed IT services costs. Managed Service Providers will frequently discount services when several services are purchased, for example, monitoring, maintenance and help desk, or help desk and on-site support. As confidence in the MSP continues to grow, an organization may outsource an entire department, like operations, to a provider. This is considered turnkey support, where the managed services IT pricing model is based on the full suite of services being purchased, the complexity of their operation, level of automation, and service levels selected. With turnkey support, the IT organization is shifting all operational risk to the managed IT support provider in exchange for an agreed price.

Managed IT services costs for turnkey operations may be more economical as the provider gains full control over the operations they support; the average cost of managed IT services is more cost-effective for the customer’s budget. Automation and good maintenance procedures lower the number of emergencies and interactions. When they have full control over these areas, they can act accordingly vs. situations like “monitoring only” where they impact the customer’s IT organization effectiveness.

While turnkey operations are beneficial for large organizations, per device/person/call managed IT support pricing models may greatly benefit smaller ones who need support but don’t have a large footprint.

In addition to these managed services IT pricing models, IT organizations may consider on-demand or block services. These options act as an open checkbook, enabling the organization to purchase specific support at a contracted price. With all of the managed IT support pricing models available, almost any organization can obtain support that meets their needs. Partnering with a trusted MSP, CG Technologies will ensure that your IT operations keep running optimally while keeping your critical data safe and your business secure. Contact us to discuss your managed IT service needs.

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With over 25 years of experience delivering exceptional services to 100’s of companies in the Greater Toronto Area (GTA), CG Technologies are confident we can deliver the same benefits to your organization – keeping you secure, delivering reliable and trusted IT solutions and expertise. Our industry-leading strategic IT consulting and IT solutions will allow you to focus on what matters most – your business.