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Managed Services (MSP)

The Foolproof Guide on How to Price Managed Services

How to Price Managed Services

First things first-what are managed services? Managed services are those trivial but demanding services a company can delegate to another that has expertise on how to fulfill that particular service.

Often, it is IT services that are managed.  Managed services differ from outsourcing in that the former requires more ingenuity and long-term relations from the selected Managed Service Provider (MSP) than the latter.

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How Your Enterprise Will Benefit from Managed Services

Inarguably, the benefits justify the cost. Before we look at finances, let us identify the advantages of managed services, shall we?

  • You get expert services. The first thing most competent MSPs would do is to gather data on the functionality and security of your cyber systems using a program known as agent. They then update systems or fix where necessary. Besides, they can also set up a help desk that guides end users. Finally, a Backup and Disaster Recovery System (BDR) is put up to assess and ensure the reliability and durability of the system.
  • You get the time and calm to focus on your core business. IT systems are crucial supporting stones for your business but they should not be so demanding as to compete for your attention.
  • Relationships with MSP is long-term. They will be with you along the way to continually upgrade, or fix your systems.


Let's Talk Money Matters!

Efficacious management of finances is imperative in any business as it affects profitability, scalability, and sustainability,

When you and the MSP of your choice agree to partner, you sign a Service Level Agreement (SLA). This document details what service the MSP is required to provide, at what cost, and the course of action in case of a breach.

A business pays for managed services on a monthly basis. This is beneficial as you can factor this cost into your budget.

The pay rate depends on the hierarchy or technicality of services needed by your business. Fortunately, this rate is flexible and you can request for more or fewer services depending on your needs.


Below are the most common managed services pricing models.


1. Monitoring Only Pricing Model

Often the cheapest, this model only offers monitoring services. When the MSP detects any threat or suspicious activity, the best they can do is to alert you.

You will have to pay more in case you want the MSP to offer a resolution, update, or any other supplementary service.


2. Tiered Pricing Model

Here, the MSP offers various tiered packages based on price and resources.

Often, there is an identified set point that allows the MSP to make a profit while providing your business with all the requisite services.


3. Per Device Pricing Model

Due to its simplicity and flexibility, this model has been adopted by many businesses.

In this model, you pay the MSP according to the number of devices they are managing be it mobile devices, desktops, or servers.

If your business entails having end users using multiple devices, it is best that you adopt per user pricing model to avoid unnecessarily high costs.


4. Per User Pricing Model

This model requires your business to pay according to how many end users receive MSP services. Simple, right? Your SLA will also be as simple.


5. La Carte Pricing Model

Like a tailored to fit suit, this model creates a package that befits your business' particular needs and wants.

As such, the package for each business will be unique.

The downside to this package is a lot of time and resources goes to studying your business and creating the best package for it.

Many MSPs shun away from this package also due to the low profit they often end up getting.


6. Value-Based Pricing Model

The MSPs that solely offer this package offer all services under one price tag.  Here, you cannot pick out particular services. Instead, you take up all you can eat.  Indeed, this is the most comprehensive package.

When choosing an MSP, you need a partner who has done this for a while; hence they know what they are doing, can deliver, and is mindful and easy to work with.

If so, we at Network Connections are what you need! With 25 years of experience and many client companies under our belt, we can guarantee expert service delivery. Contact us today, and we will be more than willing to assist.

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