As a business owner or executive, you may have heard that managed IT services can help reduce overall IT-related costs. However, many organizations are not fully familiar with how managed IT services pricing models are structured or how these services can support the needs of small and mid-sized businesses.
In this guide, Eric Brackett, Founder and CEO of BTI Communications Group, explains how managed IT services work, outlines common pricing strategies, and helps you understand managed IT services costs so you can choose a cost-effective model that aligns with your specific needs and budget.
What are Managed IT Services?
Managed IT Services consists of outsourcing external IT expertise to take care of all, or some of your IT operations.
Types of Managed IT Services
Typically, managed IT services can be divided into two categories:
- Managed IT Services
- Co-Managed IT Services
Managed IT Services
Fully managed IT services involve hiring a third-party provider to take care of all your IT needs. Think of it as hiring an internal IT department that helps with every aspect of IT, including strategy and security to installation and support.
Co-Managed IT Services
On the other hand, co-managed IT services consist of allowing IT providers to manage a portion of your IT environment. On co-managed IT services, the involvement of an external IT provider is limited to the specifications provided by your internal team.
What is the Average Cost of Managed IT Services
The average cost of managed IT services will vary considerably depending on your specific needs, environment, and pricing model. However, we will provide a clear starting point to ensure you have a good understanding of IT services pricing models.
Low-Budget Managed IT Services Pricing
Low-budget managed IT services typically range from $99 to $150 per user per month. At this price point, services are usually limited to basic monitoring and alerting, rather than full IT management. Entry-level providers monitor your servers and systems to detect potential issues, then notify your internal team when a problem occurs. While this may sound reassuring, it’s important to understand what happens next.
In most cases, your staff is responsible for resolving the issue, or you’ll incur additional fees if you want the provider to step in and fix the problem. As a result, these low-cost plans often shift the workload and risk back onto your team, which can lead to unexpected expenses and slower resolution times.
Mid-Range
Mid-range managed IT is where support becomes proactive rather than reactive. At this level, managed IT specialists take ownership of resolving problems and often prevent them before they impact your business.
For example, providers may do hourly backup snapshots and test them daily to ensure systems can be fully restored. They may do more than auto patching of your systems as part of preventative maintenance. When weaknesses are detected, they may proactively implement hardware or software updates to close those gaps and strengthen your security posture.
These agreements typically include more robust NOC services along with IT planning, strategy, and system design, backup and disaster recovery, and a blend of onsite and remote support all bundled into a single monthly fee.
Pricing is usually structured in one of two ways:
- Per device
- Per user
Per-Device Pricing
With per-device pricing, common monthly ranges include:
$100–$400 per server
$50–$100 per workstation
$30–$75 per firewall
$15–$40 per network switch
Software licensing, advanced security, and other services are added on to these rates
Per-Using Pricing
With per-user pricing, costs generally range from $150–$175 per user per month, depending on the scope of services included. While many other devices may factor into pricing, servers, workstations, firewalls, and network switches, M365 licensing, anti-virus, and backup or business continuity solutions are the most commonly included components.
Enterprise Level
At the highest end of the managed IT pricing spectrum, costs typically range from $250 to $400 per user per month. These packages are most often built around fully hosted or cloud-based environments, where your IT provider supplies and manages most, if not all, of the underlying infrastructure that powers your network.
In this model, you pay a predictable monthly fee that covers system usage, maintenance, and support, like mid-to-high tier agreements, but with significantly less on-premises hardware and internal IT burden.
Pricing in this range is also common for organizations that require advanced cybersecurity services, such as continuous threat detection and response, or for agreements that include ongoing project labor in addition to day-to-day support.
How Do Managed IT Services Pricing Models Work?
Typically, managed IT services operate on a subscription-based pricing model. In most cases, managed IT services are billed as a monthly or annual subscription, providing consistent coverage for a predictable fee.
That said, pricing can vary widely depending on the scope of services, level of support, and complexity of your IT environment.
The most common managed IT services pricing models include:
- Tiered Pricing
- Per-user pricing
- Per-device pricing
- A la carte services
Tiered Pricing Models
A tiered pricing model offers bundled service packages, each with a defined set of services. This approach makes monthly costs predictable and easy to budget. However, businesses may end up paying for features they don’t fully use if the package isn’t well aligned with their actual needs.
Per-User Pricing
The per-user model is the most common MSP pricing structure. In this model, you pay a fixed monthly rate for each end user supported within your IT environment. Pricing is based on users who actively access systems and devices, making it a scalable option as your organization grows.
Per-Device Pricing
With per-device pricing, you pay a flat monthly fee for each managed device, such as desktops, laptops, servers, or mobile devices. This model can be more cost-effective in environments where multiple users share the same workstation or where device counts are lower than user counts.
À La Carte Pricing
À la carte pricing allows you to choose individual services such as help desk support, cybersecurity, backups, or cloud management and pay only for what you need. While this can be a budget-friendly option, it may leave gaps in coverage if critical services are overlooked. Consulting with your provider helps ensure essential protections aren’t missed.
What Factors Affect Managed IT Services Costs?
The cost of delivering managed IT services depends on multiple factors, including:
- Size and complexity of your IT environment
- Software licensing (eg) M365/Azure, cybersecurity licensing and support, regulatory compliance services included, and backup and business continuity responsibilities.
- SLAs (Service Level Agreements)
- Third party software services and support included within your plan
- Number of users/devices
- On-site support requirements
- Location
- Vendor pricing model
Size and Complexity of Your IT Environment
The larger and more complex your IT environment is, the higher the cost of managed IT services. Businesses with multiple locations, hybrid or multi-cloud infrastructures, on-premises servers, legacy systems, or specialized applications require more advanced management, monitoring, and expertise.
Increased complexity also raises the likelihood of incidents, which translates to higher staffing and support costs for the MSP.
Software Licensing
Basic help desk support requires minimal tooling and carries little operational risk, making it relatively inexpensive. Fully managed services, however, require licensed software, cybersecurity platforms, monitoring tools, and dedicated labor. As responsibility expands to include security, compliance, backups, and business continuity, the provider assumes greater risk and cost. Higher pricing reflects this expanded scope and risk transfer, not arbitrary markups.
Service Level Agreements (SLAs)
SLAs define response times, resolution times, uptime guarantees, and support availability. Higher-tier SLAs such as 24/7/365 support, rapid response windows, or guaranteed system uptime require more resources and redundancy on the provider’s side.
As SLA expectations increase, pricing rises accordingly to cover staffing, monitoring, and escalation processes.
Support for Third-Party Services and Applications
A limited plan focused on basic help desk support will cost significantly less than a fully managed solution with the IT provider supporting advanced applications for contact centers, marketing, CRM, ERP, EHR or any other complex, customized application. Broader service scope increases pricing but also reduces risk and unplanned IT expenses.
On-Site Support Requirements
On-premises infrastructure, including servers, firewalls, and production-critical systems, often requires immediate on-site support. Because most MSP agreements are designed around remote service delivery, on-site support is typically excluded and billed separately.
Number of Users and Devices
MSP pricing is typically based on the number of users, the number of managed devices, or a combination of both. As the number of endpoints increases, so do licensing requirements, support workload, and overall service complexity.
Industry Compliance Requirements
Businesses in regulated industries such as healthcare, financial services, and government contracting require additional managed IT support for compliance, reporting, audit readiness, and privacy controls. Frameworks such as HIPAA, PCI DSS, SOC 2, and CMMC impose stricter security, documentation, and oversight requirements, increasing both operational effort and liability for the MSP, which is reflected in higher service costs.
Location
Geographic location can impact pricing due to differences in labor and travel costs, cost of living, and on-site support requirements. Organizations with multiple locations or remote offices may also incur higher costs due to travel, infrastructure duplication, and distributed network management. Regional regulations or data residency requirements can further influence pricing.
Pricing Model
The pricing structure itself affects overall cost predictability and flexibility. Tiered and per-user models often provide consistent monthly pricing, while per-device or à la carte models can fluctuate based on usage and growth. Some pricing models may appear less expensive initially but can result in higher long-term costs if critical services are excluded or added later.
How to Calculate Managed IT Services Rates
To understand the managed IT services rates you’re likely to pay, begin by choosing the pricing model that best suits your business. We recommend comparing providers by listing their costs alongside the services included, so you can clearly see what you’re getting for your investment.
To calculate the average cost of managed services on a per-device model, follow the following formulas.
Per Device Pricing Model Formula
Per device model: (# servers x cost) + (#devices x cost) x 12 = annual cost.
To calculate the average cost of managed services on a per-user model, follow the following formula.
Per-User Model Formula
Per-user model: (#users x cost) x 12= annual cost
A la Carte Services Model Formula
The formula for calculating a la carte services goes as follows:
(# services x cost per service) x (#users or devices) x 12= annual costs.
So, How Much Will BTI’s Managed IT Services Cost?
Understanding managed IT services pricing is the first step toward better IT decisions. If you’re ready to compare options and see what’s included at each service level, view our managed IT services pricing page for a transparent breakdown.
