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How Much Should You Be Spending on Managed IT Services?

Looking to find the right managed IT service provider for your company? Find out how you can plan and budget for your business and get a high-quality provider.

One of the most common questions businesses trying to establish an IT service will ask themselves is ‘how much money should we allocate to it.’

While a basic Google search may come up with multiple answers based on median incomes and general city statistics, it’s not a cut-and-dry answer. As with most things, the cost of managed IT services relies heavily on several factors.

Knowing how much to pay for managed IT services means understanding them first.

Specifically, what will affect the spending?

What Are Managed IT Services? 

Think of managed IT services as an all-round service for all your tech-related problems. It’s usually a company tasked to monitor, maintain and support a system of users. It’s like having an in-house IT department, but it often comes at a much lower cost.

While managed IT services may vary in what they offer for the price; they almost always include monitoring and maintenance, cyber security, account and asset management, proactive support (for users and hardware), and frequent reporting.

They’re essential for two reasons.

One, they not only regularly update your systems to help with seamless workflow integration, but they also keep your data backed up and safe. According to IBM, data breaches are on the rise and are estimated to cost businesses $3.86 million on average as of 2020. Managed IT services help run your departments’ data and keep your network stable while you’re using them. More importantly, a good managed IT service will help fix any ongoing tech-related issues at a moment’s notice.

Two, they significantly lower the costs in comparison to having to hire full IT staff. Depending on the arrangement, a managed service can cost anywhere between $100-$300 per month. In comparison, having an entire IT department can cost a business upwards of $50 per hour per person. This does not include training, equipment, or any other office-related expenses.

How Much Do Managed IT Services Cost?

There’s no fixed rule to this—however, there are different ways to estimate how much managed IT services will cost your business. Knowing which one is most applicable to your business is essential, as it could help you save on IT costs in the future.

Fixed Fees

Much like it says on the can, a fixed fee is where an IT service asks for an exact amount of money to be paid each month. This tends to be the most common type of fee, which can be customised depending on the chosen package or further negotiations.

Typically, most arrangements can cost anywhere between $100-$200 per month. What you get at this price may vary, but it usually includes the aforementioned list of services. Beyond this general budget estimate, additional fees and costs are dependent on your needs. However, this all-inclusive model is usually fit for most businesses looking to have a stable and efficient tech service.

Per Hour

Suppose you’re not a fan of using a service for a prolonged period or would prefer to pay only when it’s necessary. In that case, a per-hour charge for managed IT services is something you can opt for.

For example, suppose you’re experiencing issues with your software. In that case, calling an IT service to help deal with your problem will be a short-term solution that can cost anywhere between $50 and $100 per hour. If the problem in question isn’t a prevalent one, then this is a much more affordable form of service than having to pay every month—however, prices can go through the roof if there are numerous problems or recurring tech issues in your business.

Retainer

Managed IT services can also come in the form of a retainer. This is the process of hiring a service for an estimated amount of time at a reduced rate that’s been negotiated beforehand. This is an excellent choice for any business that needs an annual check-up, a company needing to fix a specific problem, or a business needing to deal with a repetitive problem without unloading a whole service for it.

Retainers are some of the more expensive purchases a company can make—but also potentially some of the most affordable ones, depending on how much the business has budgeted beforehand. Often retainers are used by much larger companies, who need high-quality IT services on standby to fix errors before they balloon up into more significant problems.

Final Word

If time is money, then allocating a good amount of both is necessary when planning to onboard managed IT services onto your business.

While there’s no exact estimate for calculating the exact costs of having a managed IT provider, having one, in general, is what will ensure productivity and profitability for your company. Whether it’s a monthly fee or pay-per-work, ensuring that your company is protected and functional should be on top of your priority list.

Don’t think of managed IT services in terms of dollars, but rather in terms of safety and longevity!

To discuss your managed IT support needs, contact us today.

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