IT Support Pricing Models Explained

IT Support Pricing Models Explained

Every business needs to spend money to support their computer network, which is often the lifeblood of the business. Yet the cost involved to properly support your network can vary widely from one provider to another.

Are you getting the best value from with your budget for your IT support?

Comparing Managed IT Services and Break-Fix Plans

When it comes to IT services there are basically two types of service plans that most IT companies offer. The first is “Time and Materials” (known throughout the IT industry as “Break-Fix”). The second is “Managed IT Services.”

Time and Materials

Under this pricing model, you pay an agreed-upon hourly rate for a technician to fix your problem when something breaks. To keep costs down, many IT companies will allow you to negotiate a discount on the standard hourly rate when you purchase a block of hours in advance.

The scope of work under this pricing model can be to resolve a specific problem (like removing a virus) or involve a large project like performing a computer network upgrade or move that has a specific result identified.

Managed IT Services

Under this pricing model, your IT services company becomes your IT department, supporting all the devices and PCs connected to your server. Managed IT service plans also typically offer phone and on-site support, antivirus, security, backup and a host of other services to monitor and maintain the health, speed, performance and security for your computer network. You’ll pay a monthly fee based on the number of computers and devices that need support.

So which pricing model is best for your business?

For most small businesses that have a server and at least five computers, the managed IT services approach is by far the most cost-effective option. In fact, the only time you’ll really want to consider the time and materials pricing structure is when you already have a competent IT person or team proactively managing your computer network and simply have a specific IT project to complete that your current provider doesn’t have the time or expertise to implement.

Outside of that, most businesses will come out ahead with the managed IT approach. It’s not hard to understand why when you consider that regular monitoring and maintenance (the basis for managed IT service plans) is critical for today’s computer networks.

The fact is, our ever-increasing dependency on IT systems and the data they hold – not to mention the type of data we are now saving digitally – has given rise to very sophisticated cyber crime organizations who work around the clock to do one thing: compromise your network.

Staying one step ahead of the cyber criminals is a full-time job that requires the full-time monitoring that managed IT service plans provide.

The prevalence of cyber crime doesn’t even take into consideration other common network disasters your network faces including employee mistakes, lost devices, hardware failures, fire or natural disasters that can interrupt or even destroy your IT infrastructure and the data it holds.

Preventing these problems and keeping your systems up and running is a lot less expensive than waiting until something bad happens and then paying for emergency IT services to restore your systems. As the saying goes, an ounce of prevention really does equal a pound of cure.

So if constant monitoring is a necessity, shouldn’t you just hire a full-time IT person? In most cases, companies with fewer than 50 employees will find it far less expensive to outsource their IT needs to a dedicated managed services provider than to take on the expense of additional employees.

What to Look For In a Managed IT Services Agreement

Even though a managed IT services solution is the best option for most small businesses, you should know that not all managed services plans are created equal. Here are some things to look for when evaluating a managed IT provider’s services.

Be sure the quoted monthly price covers:

  • Security patches applied weekly, if not daily, for urgent and emerging threats
  • Antivirus updates monitoring
  • Firewall updates monitoring
  • Backup monitoring and test restores
  • Spam-filter installation and updates
  • Spyware detection and removal
  • Monitoring disk space on workstations and servers
  • Monitoring hardware for signs of failure
  • Optimizing systems for maximum speed

The following services may not be included and will often be billed separately. Be sure to talk with providers about these items.

  • Hardware, such as new servers, PCs, laptops, printers etc.
  • Software licenses
  • On-site support

The Gray Areas of “All-Inclusive” Service Contracts

In order to truly compare the cost of one managed IT services contract to another, you need to make sure you fully understand what is and isn’t included. You should review the SLA (service level agreement) carefully. It is often easy for one IT support provider to appear far less expensive than another until you look closely at everything that is included.

Before you sign up for a managed IT contract, be sure you know the answers to the following questions.

  1. Do they offer a written, guaranteed response time to your calls?
  2. Do they provide detailed invoices that clearly explain what you are paying for?
  3. Do they have adequate errors and omissions insurance as well as workers’ compensation insurance to protect you?
  4. Do they provide a weekly report that shows all the updates, security patches, and status of every machine on your network so you know that your systems have been secured and updated?
  5. Is it standard procedure for them to provide you with written network documentation detailing what software licenses you own, critical passwords, user information and hardware inventory?
  6. Do they have other technicians on staff who are familiar with your network in case your regular technician goes on vacation or gets sick?
  7. If you were to experience a major disaster, do they have a written plan for how your data could be restored quickly and/or enable you to work from a remote location?

The Final Word

As computer networks become more complex, it has never been more important to ensure your network is being monitored and protected. Getting the best value for your IT dollars is easy when you choose the right IT support service and pricing structure. While looking through contracts and asking lots of questions may seem like a hassle at first, we’re sure you’ll be glad you took the time to fully evaluate your options before signing up for service. After all, the right managed IT service plan will help you manage your IT costs each month while providing consistent monitoring and peace of mind.