How Do IT Companies Charge For Their Services?

Modern businesses are becoming more and more reliant on digital technology. When small businesses factor tech into their budget, it’s important to not just consider the cost of purchasing this technology but also maintaining it.

Most companies will hire outside IT services to handle this maintenance. This can be less costly and often more convenient than hiring in-house IT staff who may only be able to offer maintenance during nine-to-five weekday hours. 

But not all IT companies operate the same way, so to understand what to expect for IT charges, it’s important to know what model you’re going to use. Of course, rates can vary depending on the IT company you hire. The way in which companies charge can also vary – which can also be important to consider when setting aside an IT maintenance budget. 

Below is a guide to the different ways in which IT companies charge for their services.   

Break-Fix Companies Vs. Managed Service Providers (MSPs)

Break-fix companies are the most traditional type of IT company. You use these companies only when something breaks and they will charge you based on the individual cost of that repair. A technician may come out to your work premises, you may have to go to them or they may be able to fix the problem remotely.

Managed service providers (MSPs) are another option. You pay these companies a fixed rate (either weekly, monthly or annually) and they then continuously work to install, update, and manage your technology. Unlike break-fix companies, MSPs don’t just respond to tech problems but also actively work to prevent them. Most work is carried out remotely and immediately. 

Best Cost-Saving IT Option

For the majority of businesses, MSPs are a better option. Paying a fixed rate makes it easier to budget the cost of maintenance rather than paying for individual repairs (the cost of which can vary and is often unpredictable). 

MSPs also help to reduce downtime–these companies can not only react to tech problems more quickly but they can also prevent them from happening in the first place by carrying out continuous monitoring.

Choosing the Right MSP

MSPs come in a variety of sizes and specialties. When looking into the cost of IT services, this can be important to consider.

For instance, some MSPs have much smaller teams of employees, less resources and less experience. These companies tend to be a lot cheaper and are often upfront about their low price rates. Their prices may be a great bargain, however they aren’t always the best option if you’re looking for reliable and thorough maintenance.

On the opposite end of the scale are large organizations that may not just try to charge you for services but may also try to upsell you on hardware and software you don’t need. You could end up spending a lot of money when using these companies without necessarily getting the thorough maintenance that you need.

A mature MSP will be able to offer the right balance of experience and cost, while offering the most reliable maintenance service. Method Technologies, a Las Vegas IT company that does cost-saving bill analysis, recommends looking for an experienced MSP that prioritizes customer relationships. This type of provider is the most likely to help you create a strategy designed around your business needs and help you to adapt and learn as you go.

These companies do not always advertise their costs up front–they’re likely to charge based on the size of the demand of the client. For example, a large tech-heavy client is likely to require a deeper level of maintenance than a small client with less tech needs. These companies are often the best value for your money.

When comparing prices, always ask what is included in a company’s package so that you know what you’re paying for.

How Much Should I Be Paying Per Month?

The average cost of an MSP is $100 – $250 per person/server. By this measure, your average medium-sized company with 35 employees and 1 to 2 servers is likely expected to pay $3500+ per month. This might sound like a lot of money, but it’s often much cheaper than paying the salaries required to hire a team of in-house technicians. 

Most MSPs also provide around-the-clock monitoring and prevent costly tech problems. Such tech problems could include cyberattacks – which can cost some companies millions of dollars in both extortion and lawsuits. Consequently, you could be saving yourself a lot of money by using an MSP. 

Chris Turn