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Managed IT Services Costs and Contracts – What to Expect

Part of the reason why business leaders decide that managed IT services are the best way to resource IT is because they want predictable costs. However, Managed Services Providers (MSP) don’t all operate on the same model, so you need to be clear about what’s included and what’s not in your monthly fee. The last thing you want is a surprise bill for something that you thought you were already paying for, so assure that you understand the contract and the costs before you sign on the dotted line.

Monthly Managed IT Services Costs

Depending on where you’re located, how many locations you have, and the size of your business, expect managed IT services to cost roughly $115 – $190 per user. Following are some factors that will affect your price.

Multiple User Devices

Make sure you understand exactly what “per user” means. Many people these days use multiple devices to get work done so be clear on whether or not services extend to their smartphones, tablets and other equipment they use.

Onsite or Cloud Servers

The type and complexity of your IT environment will be a factor in your pricing. If you still have onsite servers, they’ll be priced differently than cloud servers, but just because you have cloud servers doesn’t mean IT support won’t need to be involved with managing them. They will, and that should be included in your monthly fee.

Data Backup

The type of data backup that you have and the amount of data that you store will also be a factor in your pricing. Be aware that the default data backup offered by the MSP might not be sufficient. Part of your discussion with the MSP should about data backup parameters that are based on how long you can afford to be without your data, and how much data you can afford to lose in the event of an accident or cyber attack.

Basic Cybersecurity Services

A good MSP is going to manage your IT network with security in mind and they’ll provide a baseline of security services in your monthly fees. Some services you can expect to be included are firewall management, antivirus, and email spam filters.

Related: Download 8 Things You’re Doing in Your Business That Could Lead to a Cyber Attack

Managed IT Services Onboarding Costs

The transition to your new managed IT service company will involve some work to get their tools installed on your network and endpoints, and get started with monthly services. Initial activities may also be needed to bring you up to date with IT tasks that have been neglected like running software patches and documenting your network.

The costs for onboarding will depend on the size and complexity of your network so expect about $2,000 – $14,000 for this one-time cost.

What’s Not Included in Managed IT Services Costs

Expect to have responsibilities and costs that are beyond the scope of managed services but are vital to the smooth and secure operation of your IT systems.

Software Licenses

Costs that are usually not included in your monthly flat fee would be any software licenses like Microsoft 365 or VPN, although the management of software licensing would be.

Vendor Support Issues

There could be limits to how the MSP will work with your vendors for support issues. For example, if your internet goes down, or your line-of-business software is not performing well, it definitely will be helpful if the MSP talks to them tech to tech, but anything beyond a basic level of response may incur additional costs.

IT Improvements and Projects

As you get started with an MSP, you may have some catch up to do to make your systems supportable, like upgrading hardware or software, or even increasing your internet bandwidth. These costs would be above and beyond your monthly or onboarding fee. Investments in technology that are recommended to move your company along a path to IT maturity would be quoted separately as projects.

Advanced Cybersecurity

Most MSPs offer baseline cybersecurity services but the level of protection that you get might not match up with your risk tolerance. Expect additional fees for advanced cybersecurity services to be roughly $50 to $75 per user and a separate scope of work.

What to Look for on a Managed IT Services Contract

Make sure the contract is clear about the number of users, locations and computer equipment included in your monthly services. The term of the contract and what to do if you want to terminate the contract should be clear.

Description of Recurring Services

The list of recurring services in your contract should inform you of the level of support you can expect, whether onsite support is included and how after-hours support is handled. It should also outline the ongoing behind-the-scenes proactive and security services that will be key to smooth and secure technology operations.

IT Guidance and Planning

Making forward progress with how your organization uses technology will depend in part on the guidance of a vCIO (Virtual Chief Information Officer). Check your contract to make sure that this is included as well as how often you’ll meet, and the boundaries of the relationship.

Service Level Agreement

Most likely, getting fast response for support is one of the reasons you’re making the switch to a different IT company. The Service Level Agreement (SLA) in your managed IT services contract should provide expectations for response time for different situations, for normal or critical incidents and outages, and for root cause analysis and problem management.

Exclusions in Your Managed IT Contract

There will be some tasks that the MSP can do for you that aren’t included in your monthly services, and some services that they’re not equipped to do at all. Read through the exclusion section to find out what they are.

Provisions that Outline Your Responsibilities in the MSP Relationship

In order to get the results that you want from managed IT services, you’ll have responsibilities that will be detailed in the contract such as:

  • Commitment to follow recommendations for system improvements.
  • Agreement to not make modifications without the input of the MSP.
  • Understanding that 100% security guarantee is not realistic.
  • Agreement to follow all laws for email use.
  • Agreement to provide sufficient, consistent internet bandwidth.
  • Expectations for handling equipment procurement and warranties.
  • Expectations for data backup provision and accuracy.

Before You Sign Your Managed IT Contract

This article can’t cover every situation that you might face when you’re reviewing costs and contracts during your MSP evaluations. However, it should point you to some key components that, if missing, should certainly be discussed. Consult your attorney for specific advice regarding your contract before you sign.

Up Your Game with Managed IT Services

XPERTECHS provides companies in the Baltimore and Washington DC area, and the Texas Triangle region with managed IT services. We’re your IT partner if you want to improve operations and enable your goals with technology. Contact us to schedule a free IT assessment.

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