Managed service providers (MSP’s) have several ways to structure pricing for their services. There are many factors that contribute to creating the best pricing model for your business. These factors should also create the highest possible profit margins/ cost savings while still offering clients the best possible level of service. MSP pricing is not universal and varies across all markets and countries. Many new MSPs struggle to build a price model according to the value they provide.
MSP Pricing Models
MSP Monitoring ONLY
- Easy to manage.
- Includes proactive management of alerts and monitoring of issues.
- Does not include patching, remediation, or remote support.
- Monitor’s desktops, endpoints, firewalls, and networked devices.
Monitoring only pricing is a good option for when a business has its own internal IT department. Their own IT engineers will have to respond to incidents alerted by MSP to reduce downtime by fixing issues as they happen.
- Hard to stand out against other MSP’s in the area, due to low requirements for investment or IT infrastructure.
- Can be offered by anyone with a RMM (remote management) tool.
- Hard to find a decent profit margin due to commodity.
- Customers will be frustrated with the extra costs to go on-site to rectify issues.
This pricing model is great for business looking to add to their own internal IT infrastructure and be a very affordable option at a flat rate, per user per month or per-device pricing options.
Tiered Services Pricing
- Can be tailored to customer’s needs, evolving alongside the customers business.
- This pricing offers more options for services and support.
- More flexibility meaning you can work with a wider range of customers.
- More difficult to manage due to multiple levels of support, as opposed to a streamlined service.
- Can cause confusion between clients as they may not know what is and not is included.
- Gives the option to choose less expensive options for price-conscious customers.
- Can cause frustration with clients due to services that are outside the scope of the agreement and are billed accordingly for any extras.
Break Fix MSP Pricing
- No need for retainers
- Good for starting off MSP’s, retired or part-time.
- Was once the most popular type of service, has waned in popularity over the last couple of years.
- Networks and tech have become more complex over the years, spending more time fixing systems for non-managed clients.
- This model makes clients stop regular maintenance on their infrastructure making problems more complex later.
- Without SLA, clients have no control over their possible costs, repair times or assistance for major incidents like breachers and disaster recovery.
Per-User – MSP pricing
- Per-user pricing is the most popular model in recent years due to users needing support for multiple devices.
- Clients can easily adjust and add/remove/changes the agreement as their business evolves.
- Security permission is easier to manage using the active directory.
- Can be difficult to price for some business models. Example for organizations that use dummy terminals where multiple people are using the device. E.g. Libraries, Nurses inwards.
- As the number of devices increases, the cost will also increase to cover all the newer devices.
Per Device Pricing
- Customers can enjoy an easy-to-understand flat fee per device.
- Easy to explain the value of service to clients.
- Easy to add and change devices as their business evolves.
- Can be difficult at first to set up due to different types of devices needing different types of support levels.
- Support costs can be higher when multiple users are using the same devices.
- As the number of devices increases so does the cost to manage them. MSP’s need to make sure they remain profitable as the numbers grow.
Value-Based (Flat Fee) Pricing
- Simplicity – flat-free models are the easiest to manage and leverage.
- Value-based has gained popularity over the years.
- Flat-free pricing offers one price of all the services, monitoring, help desk, security, remote support, firewall and anything else in the IT infrastructure.
- Value-based pricing, MSP’s become the clients outsourced IT department in effect.
- Customers can get frustrated because you cannot itemize pricing, you are pricing to the individual cost for each provided.