How Different MSP Pricing Models Work for SMBs
Although small and medium-sized business owners certainly have to think about price when looking for the right IT management company, the extent and quality of service is another major consideration.
If you choose to pay the least amount for minimal IT support, you might as well be doing nothing at all. It’s important to choose a service that is actually able to deliver value to your IT operations. After all, if you’re like the majority of modern companies, the business would all but stop without access to your computers and network.
When choosing an IT management service, it’s important to think about the worst thing that could happen and ensure that you’re ready on the off-chance that they do occur.
You may find that a securities operations center (SOC) can help you cope with any inbound viruses and ransomware threats. Having your systems monitored by experts around the clock will not only ensure that your computers and networks are performing at its best but also pinpoint security issues before they become full-blown problems.
System downtime is another important thing that you need to consider when thinking about the IT support that you need. A lot of business owners make the mistake of looking for the cheapest IT support service out there and end up leaving their networks vulnerable.
It isn’t enough to choose someone who charges less than the others. Always think about the value and credibility of a managed service provider. After all, they’re supposed to help you drive your business forward.
Here are a few pricing models offered by managed service providers:
The monitoring-only option is probably the cheapest pricing model that you’ll find. Unfortunately, the services offered also only cover the bare minimum. You’ll only have monitoring services for certain parts of your IT infrastructure.
You will also get alerts if any problems are detected. Most of the time you’ll either have to pay an additional fee to resolve the problem or resolve it on your own. There is no proactive protection or added value in this plan.
A tiered pricing model comes with options. You can choose the package that works best for you depending on the services that you require and the price that you’re willing to pay. A lot of managed service providers offer this pricing model because it allows them to deliver pre-defined services to their clients while giving their clients the power of choice.
Unfortunately, leaving the option up to the client isn’t always the best thing. As aforementioned, a lot of business owners choose the cheapest option rather than what they really need.
A La Carte
Managed service providers that offer an a la carte option will give you the flexibility and customizability that you need. Every single client gets their own personalized package according to what they need.
Prices are marked up by the provider so that they make a profit. If flexibility is required in your IT support needs, the a la carte pricing model may be right for you. However, some small- to medium-sized business owners don’t know enough about IT support to design their own packages and end up putting something together that doesn’t really fulfill their needs. This is both ineffective for the client and a waste of time for the provider.
A pricing model growing in popularity is the flat fee model. Rather than selling each component of IT services separately, providers charge one flat fee for a defined list of services, regardless of how much and how little is used.
This allows the provider to become their client’s IT solution for everything. Flat fees vary from client to client and margins may be different. The fee offered to a client depends on the approximate cost of delivery for each user. IT services are sold as a complete package so the prices for each service usually aren’t considered.
The per-device pricing model is probably the easiest for the majority of small business owners to understand. As the client, you get to pay a flat fee every billing cycle for each device supported by the provider.
Prices may vary from device to device. It’s a pricing model that is easy to understand. Since it offers the client a degree of flexibility, many of them choose this model.
That being said, a per-device pricing model also fails to really consider the expenses of delivery incurred by the provider. Profit margins are, therefore, often low for the provider. When executed well, however, they can be a great choice.
The per-user pricing model is quite similar to the per-device pricing model. Again, a flat fee is charged every billing cycle for each user supported by the provider. This is a popular option for clients where users have multiple devices.
Like the per-device model, this one is flexible and easy for both the provider and the client. Of course, it’s important for the provider to figure out a price that clients are willing to pay yet will be able to make them a profit.