How Do IT Companies Price Their Services?

When you’re looking for IT services for your business, one of the factors you will inevitably be considering is the price. You have a budget to meet, which means that you have to consider the cost, even when you’d rather focus on quality.

There are many different IT options that your business can choose from. It is, of course, in your best interest to choose an option that will be easy on your budget while also offering you the quality your business needs to optimize productivity and technological tools. With that in mind, here’s a look at how IT companies price their services so you can gain a little more insight into the thought processes behind IT pricing.

IT Options

Some of the options that you can look into for your business include the following:

Managed Services Providers (MSPs)

A managed service provider is one option many businesses are turning to for IT services. An MSP is generally a company that works with you on a paid monthly plan. So instead of only calling them when something breaks, an MSP is a true IT partner involved with IT planning, proactive cybersecurity, and support whenever you need it.

One cost advantage of an MSP is that they work on fixed rates, so you don’t have to worry about surprise fees if you have an IT meltdown.

Other advantages include that you have the expertise of an entire team of IT professionals to call on, MSPs often offer 24-hour support and network monitoring, and they understand the business side of technology in addition to knowing how to fix it, so they can help you leverage your technology and implement the right tools for success instead of merely fixing what you already have in place.

In-House IT Department

It can be very convenient to have an IT professional in house that you can call on to resolve on-site issues immediately. The problem with an in-house provider is that their support isn’t 24/7, but your business servers are.

An in-house IT department is also often more expensive than an MSP, as you are paying salaries, benefits, and more to individuals on your payroll—and those expenses only grow as you require more team members.

Break-Fix IT Companies

Break-fix IT options can be cheap, but here is where you would compromise on quality, which could cost you more in the long run.

A break-fix IT model involves an IT professional coming to fix issues that have already occurred. You’ll usually only interact with a break-fix IT company after something is already broken, which is already too late in a fast-paced business world. A break-fix IT provider offers no monitoring or other proactive solutions for your cybersecurity and technology.

While there is no ongoing price for break-fix services, you are unable to anticipate when things will break and how much repairs will cost. Additionally, waiting until your technology or software breaks down can cost you more in the long term anyway, as you then have to spend more money on the fix. And if you suffer a data breach, you will also suffer significant financial setbacks.

Spending on the Right IT Services

While costs need to receive some consideration, you should consider what you spend on IT costs to be an investment.

With poor IT support, you rely on a cheap initial output, but that cost becomes more expensive over time when you sacrifice efficiency and your cybersecurity suffers. If you need more convincing that IT is something you should invest properly, think about the fact that the average total cost of a data breach is $3.62 million.

Ultimately, IT spending that saves you from more expensive issues in the future will be worth your while. That’s why you shouldn’t sacrifice when it comes to areas such as cybersecurity and investing in IT that is optimized to increase your efficiency.

Average Costs of IT Services

The average monthly cost of managed IT services ranges between $100–250 per user in per-seat agreements, or $2,500+ total for on-price contracts. While that may sound like a high amount, you should consider that MSP services are 24/7, 365 days per year, and they’re often actually less expensive than the cost of hiring an internal team.

Whatever options you choose for your company’s IT, make sure you factor in the quality of IT services and the needs of your business along with the price.

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