Managed Services providers deliver their IT amenities to the companies on a subscription basis. Vice versa, organizations or businesses rely on MSPs for smooth IT operations. Managed services have many benefits to the companies entailing them. By subscribing to managed services, businesses can focus on their core competencies and gain more growth and profitability rather than focusing on IT operations. Once a company has decided to obtain services from MSPs, the next part is choosing the MSP based on various factors. These factors may include:
Specific vs. All-inclusive Services: An MSP can be subscribed based on specific/individual services that are needed by your business or Comprehensive services which cover all the issues that can arise. As All-inclusive services give complete coverage, it is more dependable and costly. In contrast, a specific service may cover a single or individual assistance.
Distant vs. On-site Services: Another factor to consider is whether your company needs remote support or needs someone to manage their IT operations on the location as part-time work. Prices definitely vary depending on these factors as onsite services cost high.
Your business IT needs: If your business ultimately wants to eradicate the IT department and hire MSP for complete services, then the cost of hiring would be high. Whereas your business needs are not to hire a full-fledged IT department, you only need a few services like cloud services, etc. the cost varies from MSP to MSP.
One of the most significant factors organizations consider is pricing and cost. A reliable and budget-friendly MSP is the tricky part of subscribing to their services. Businesses need MSPs that are cost-friendly as well as dependable at the same time because business operations are dependent on the provision of quality IT services. Many pricing models have evolved to tackle the pricing in the domain of Managed services subscription, but six models are famously agreed upon. Different MSPs follow different cost models, but a business must gauge the value delivered against the price. Businesses need to understand these six pricing models to weigh the options to make wise decisions successfully.
MSP Pricing Models
Now let’s look at various well-known pricing models followed by different MSPs.
1. Per Device Pricing Model
The per-device pricing model is based on the number of devices MSPs provide to the client. These devices include servers, workstations, tablets, laptops, printers, etc. MSPs charge the organizations based on device provision. This model has its pros and cons. This pricing model has the benefit that it’s scalable to be used with as many or few devices as the company needs. Another advantage of this model is for businesses with multiple users, as the price is calculated based on installed widgets. Thus the employees can make full use of the devices. But then, businesses that have a lesser number of users or usage criteria may suffer from this model as the utilization remains less, and the business is fully billed for the device. A significant drawback of this model is that if an MSP has installed ten devices for the client at some price and the client cancels two devices, then the backend cost for MSP remains the same, but the client’s expectation for cost-cutting may be unrealistic.
2. Per User Pricing Model
In this model, MSPs decide their charges on the basis of the number of users rather than several devices. Usually, this model gives overage for all devices that the end users utilize. The end users are counted while signing the contract, and bi-yearly audits are also conducted to maintain the count of end users. Pricing is increased or decreased based on the number of end users. Per-user pricing does not account for the devices used, so if the organization decides to move its services from one cloud to another, the prices remain the same.
3. Unlimited Service Pricing Model.
It is also known as the “all-you-can-eat” pricing model. It includes all the services or domains a business requires to be covered. This lexible pricing model includes onsite support, remote support, and other services at a flat rate for a month. In this model, the MSP may provide 24/7 service or charge off days separately if a service is obtained. The “All you can eat” model has based on flexibility and reliability in all aspects that a client expects from an MSP. The model is accurate if you are unaware of the amount of support your company requires.
4. Break/Fix Pricing Model
As the name suggests, the Break/Fix pricing model is formed on the concept of break and fix. When a firm experiences downtime, the MSP sets it on a flat, hourly, or daily rate. The positive aspect of this model is that your business does not have to subscribe to MSPs for extended periods, saving costs. But at the same time, the reliability and accountability suffer. In the Break/Fix model, your business is unaware of the response time an MSP may take to respond to your problem. It may take days or even weeks. Cost is saved, but reliability is affected.
5. A La Carte Pricing Model
This model allows the companies to pay for a customized set of services, i.e., for the services they need. The benefits are all-inclusive but charged based on the requirements of different businesses. A La Carte pricing model allows your business to build the services you need and get charged for them, saving costs.
6. Tiered Pricing Model
The tiered Pricing model is designed tier-wise, i.e., primary, premium or expert, etc. If a business requires elementary services, it is budget-friendly to provide essential support. Moreover, the advanced packages offer more inclusive and wide-ranged support. Hence in the tiered pricing model, different bundles or packages are offered, varying in the number of services and amount of support.
Conclusion
Having knowledge of every pricing model – the business can decide the model it wants to opt for. The business best gauges the cost and value offered in return, or some MSPs also provide consulting services. Moreover, customized pricing models can also be made to best fit different business requirements.