How Much Do Managed Service Providers Charge?

At MSP Association of America®, we often hear the question: “How much do managed service providers charge?” It’s a crucial consideration for businesses looking to outsource their IT needs.

The answer isn’t straightforward, as MSP pricing can vary widely based on several factors. In this post, we’ll break down the common pricing models and key elements that influence MSP costs, helping you understand what to expect when budgeting for managed IT services.

MSP Pricing Models Explained

At the MSP Association of America®, we’ve observed various pricing models used by managed service providers. Understanding these models is essential to finding the right fit for your business.

Per-User Pricing

This model charges a flat fee for each user, regardless of the number of devices they use. It’s straightforward and simplifies budgeting. Per-user pricing typically ranges from $100 to $250 per month (depending on the services included). This model suits businesses with a stable workforce and consistent IT needs.

Per-Device Pricing

You pay for each device managed by the MSP in this model. Costs vary widely, from $30 to $200 per device per month. This model can be cost-effective for businesses with fewer devices than users, but it can become expensive as you add more hardware.

Tiered Pricing

Tiered pricing offers different service levels at varying price points. For example, a basic tier might cover essential services for $500 per month, while a premium tier with advanced cybersecurity and 24/7 support could cost $2,000 or more. This model allows businesses to select a package that aligns with their needs and budget.

All-Inclusive Pricing

This model provides a comprehensive set of services for a fixed monthly fee. It’s often based on the total number of users or devices. All-inclusive pricing can range from $100 to $250 per user per month. For example, a business with 25 employees might pay $2,500 to $5,000 per month for fully managed services. While it may seem expensive upfront, it can offer better value and predictability in the long run.

À La Carte Pricing

Some MSPs offer a menu of services that businesses can choose from. This model allows for customization but can be complex to manage. Prices vary widely depending on the services selected. For instance, basic monitoring might cost $50 per month, while advanced security services could run $500 or more.

The pricing model you choose should reflect your business’s specific needs, growth plans, and budget constraints. The cheapest option isn’t always the best value. Focus on finding an MSP that offers the right balance of services and pricing for your organization. As we move forward, let’s explore the factors that affect MSP pricing and how they can impact your overall costs.

What Drives MSP Pricing?

Service Scope Shapes Costs

The breadth and depth of services you require significantly impact MSP costs. Basic monitoring and maintenance typically start around $50 per user per month. Comprehensive packages (including advanced cybersecurity, cloud management, and 24/7 support) can exceed $250 per user monthly. A CompTIA study found that 46% of businesses increased their IT budgets specifically to expand the scope of managed services.

Size Matters in MSP Pricing

Company size and IT environment complexity directly affect pricing. Small businesses with simple setups might pay as little as $70 per user monthly. Enterprises with intricate networks could see costs upwards of $300 per user. The 2023 MSP Benchmark Survey revealed that MSPs serving larger clients (250+ employees) reported 30% higher average monthly recurring revenue compared to those focusing on small businesses.

Industry-Specific Needs Drive Costs

Certain industries require specialized IT services due to regulatory compliance or unique operational needs. Healthcare organizations adhering to HIPAA regulations often face 15-20% higher MSP costs due to additional security measures and compliance reporting. Financial services firms might see similar increases for SOX compliance support.

Geographic Location Influences Rates

Geographic location plays a role in MSP pricing. People who live in rural areas are more likely to report burdensome travel costs and unmet travel needs due to a lack of transportation options.

Expertise and Support Quality Impact Pricing

The expertise level and support quality offered by an MSP significantly impact pricing. A strategic pricing structure can foster long-term profitability, inspire client confidence, and solidify relationships for years to come. A recent survey by Kaseya found that 89% of businesses prioritize technical expertise when selecting an MSP, even if it means paying a premium.

These factors interplay to create a complex pricing landscape for managed services. To navigate this terrain effectively, businesses must carefully assess their specific needs and compare them against the services and expertise offered by potential MSPs. This evaluation process sets the stage for understanding average pricing ranges across different business sizes and industries.

What Do MSPs Actually Charge?

At MSP Association of America®, we have collected extensive data on MSP pricing across various business sizes and industries. This chapter breaks down the real-world costs you can expect when engaging managed IT services.

Small Business MSP Pricing

For businesses with 1-50 employees, MSP costs typically range from $70 to $150 per user per month. A 25-employee company might pay between $1,750 and $3,750 monthly for comprehensive IT management. However, prices can vary based on service complexity. Basic support might start at $50 per user, while advanced cybersecurity packages could push costs to $200 or more.

Mid-Size Business MSP Costs

Mid-size businesses (51-250 employees) often see economies of scale, but also require more sophisticated services. Monthly costs typically range from $100 to $250 per user. A 100-employee company might budget $10,000 to $20,000 per month for managed IT services.

Enterprise-Level MSP Pricing

Large enterprises (250+ employees) face the most complex pricing structures. Monthly costs can range from $150 to $500 per user, depending on the depth of services required. An enterprise with 500 employees might invest $75,000 to $250,000 monthly in managed IT services.

Specialized Industry MSP Costs

Certain industries face higher MSP costs due to regulatory compliance and specialized needs. Healthcare organizations, for instance, often pay a premium of 20-30% above standard rates due to HIPAA compliance requirements. A mid-size healthcare provider might budget $150 to $260 per user monthly for compliant IT services.

Financial services firms also face higher costs. This can push MSP costs for a mid-size financial firm to $180-$300 per user monthly.

Final Thoughts

MSP pricing models vary widely, from per-user to all-inclusive options. Factors such as service scope, company size, and industry requirements significantly impact costs. Small businesses might pay $70 to $150 per user monthly, while enterprise-level organizations could invest up to $500 per user (depending on their specific needs).

The right MSP partnership is an investment in your business’s future. You should look beyond the bottom line and consider the long-term value, breadth of services, and provider expertise in your industry. A slightly higher upfront cost can often translate to significant savings and improved efficiency over time.

We at MSP Association of America® help businesses connect with the right managed service providers for their needs. Our platform offers a valuable resource for identifying and evaluating MSPs across the United States.