What You Need to Know About the Managed Services Pricing Model - CWPS

Posted by Shirien Elamawy on July 13, 2017
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MSP Pricing.pngA managed service provider is the obvious choice if your business needs IT help -- but how much is it going to cost you? If you've been looking into MSP pricing, you may be getting a little confused... but you don't need to worry. Managed service pricing models can initially seem complex, but that can actually much better for your organization.

Consider the Services Offered by a Managed Service Provider

MSPs are set along a fairly wide spectrum. Some MSPs only handle things such as network monitoring -- they are essentially NOC providers and do little else. But other MSPs will handle absolutely everything related to your organization's infrastructure, ranging from 24/7 support to managing IT projects such as migration. Consequently, a business could see some pricing discrepancy; an MSP that seems a little "too cheap" could not be offering the same services as others. 

The Different Types of Managed Service Pricing

Even when MSPs have similar product offerings, there are some different types of pricing model that they may use. These include:

  • Per user. This is the traditional "per seat" license that many businesses are used to; however many users you have, your cost is calculated based on this. This is often a fairly fair pricing model, as most users will require an average amount of support.
  • Per device. This is similar to per user, but it's per actual device that is utilized across the infrastructure. About 41 percent of MSPs will use this type of billing; though it's a little more complicated than per user, it tends to work out to a more fair and accurate amount.
  • Per tier. A tiered pricing model will usually create several structured tiers of service that the MSP offers, based on the size of the organization and services rendered. This is often the easiest for an organization to track -- and the simplest for both parties.
  • Per service. There are also organizations that simply bill based on the services that they have offered; there's a flat rate, and they essentially become your IT department. This can be very valuable for organizations that simply want everything handled for them.

Priced to Scale

Regardless of the type of pricing model, there's one thing that remains consistent: the managed service provider is pricing based on the services that the organization truly needs. Nearly all MSPs price their services so that it is easy to scale them up or down depending on what is needed. Thus, while it may not be as simple as purchasing a license or paying a flat fee to an IT organization, it is going to be ultimately beneficial to the business, since you aren’t paying for services you aren’t using.

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Topics: benefits of an IT MSP, MSP