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IT Managed Services: Pricing Models

When deciding how much to charge for managed IT services, there are several factors that MSPs should consider. The cost of managed IT services can vary based on your company’s location, size, and specific products and offerings. In this article, we discuss a few common pricing models to help ensure you are asking a fair price for your IT services. There are four common pricing models for managed IT services:

  • Per-user pricing model
  • Per-device pricing model
  • Monitoring only pricing model
  • Tiered pricing model

Below, we examine the pros and cons of each of these models to provide more insight into which will work best for your business.

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Per-User Pricing Model

Most per-user pricing models charge a flat fee per end user per month and cover IT support on all user devices. While this straightforward pricing model can help cut out some of the guesswork, it has the potential to put you in charge of a lot of devices. For instance, if a user has a company desktop, a company laptop, a company smartphone and a company tablet, the flat per-user fee covers the IT support of all of these devices.

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Per-Device Pricing Model

Another option is to charge businesses per device. TechTarget describes per-device pricing in this way: “The premise is to develop a flat fee for each type of device that is supported in a customer environment. For instance, a basic per-device pricing model might designate a flat fee of $69 per desktop, $299 per server, $29 per network printer and $99 per managed network.”

This model simplifies the pricing structure for your services and makes it easier to provide potential customers with a quote or estimate.

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Monitoring Only Pricing Model

A monitoring only model puts you in charge of network monitoring and alerting. According to TechTarget, “In this scenario, several different service levels can be employed. For example, an SMB-focused offering that provides operating system and software application patch management, antivirus and antispam updates, disk optimization and backup monitoring for a flat fee per month allows the MSP to bill for additional remediation activities identified through monitoring.”

N-Central monitoring - connected laptop

Tiered Pricing Model

One of the most popular pricing models among managed service providers, the tiered pricing model sells bundled packages of IT services that increase in price as more services are added. A tiered pricing model provides you and your customers with the flexibility you need to implement a comprehensive managed IT services solution.

In determining how much you can charge your clients, make sure you figure out what equipment and services should be factored into the overall pricing. Generally, this includes calculating the cost for:

  • Number of servers (physical or virtual)
  • Current IT services vs. what services the client is missing
  • Number of workstations
  • Number of mobile devices (smartphones or tablets that have access to your clients’ servers)
  • Current backup software

As you calculate your current costs, make sure you outline a pricing model that will satisfy your clients’ needs. MSPmentor offers three key pricing considerations as you decide what to charge:

  • What are your current overhead costs?
  • What are other MSPs charging for their services?
  • How are your managed services different?

IT solutions to help MSPs and IT professionals

  • Better manage customer networks, machines, and servers
  • 24/7 IT support from a single dashboard
  • Constant visibility and control over your customers’ data