Managed Services Pricing: Are They Worth the Cost?

2018-08-29T09:55:14+00:00 August 29th, 2018|Managed Services, WSM for Business|

You’ve made the decision: you need help managing your Information Technology (IT). No matter the size of your business, as IT needs continue to grow, the question of who will address these needs will come up. In today’s marketplace, many businesses are turning to managed services to help manage their IT. Managed services pricing models vary by provider, but the main question many potential clients have is, are managed services worth the cost?

When making a decision about who will manage your impending IT needs, you have a couple of options:

  1. Hire in-house support: This option is nice because you have someone right there to manage your IT. But this can mean someone with some IT experience will have to supervise them, and additionally, the resource(s) might be more of a generalist than a specialist, as IT is an increasingly complex field. Finally, you’ll want to be sure that your organization has enough work on a regular basis to keep the person or people you hire busy, full-time.  Employing people can be expensive, and it’s exponentially more expensive when you’re not fully leveraging them, or they aren’t specialized in enough in the day-to-day tasks you may require them to execute on.
  2. Hire temporary staff: If you’re needing help on a project or know when you’ll be busy, you could hire contractors or temporary staff. However, hiring people is difficult and takes time, and in many cases, you may find yourself cycling through a few different contractors until you find the right fit from both a knowledge-base and productivity standpoint.
  3. Break-fix model: If you’re a really small company, then sometimes the break-fix model can work for you. Wait until something fails and then fix it. You’d have to determine how much it would cost you to be down for a few hours or if security hack happens, you could be out of business depending on your liability. Even in this scenario, you’ll want to have some form of support ready at a moment’s notice to assist.
  4. Managed services: With this option, an IT services firm provides IT support to your business. This could range from development services to managed hosting or managed cloud services, to networking and security, depending on the SLA and the firm’s capabilities. You’re not adding another temporary employee, but instead paying a monthly fee for a provider to handle your IT-related tasks, usually at an hourly rate for the services.

Depending on your business model and your needs, any of the above could work for you. But we’ve found for most small to mid-sized business, the managed services pricing model fits their IT needs perfectly without being cost-prohibitive. Often, your business can save money when using managed services, especially if you’re paying for the services upon consumption, and not just in case you need them.

Managed Services Pricing vs. Average Costs of Full-Time Staff

Let’s look at the average costs if you decided to go with the first route and hire full-time staff,

  • Full-time Security Analyst/Manager: $75,000 – $130,000 annually (Salary.com)
  • Full-time Developer: $70,000 – $100,000 annually (Salary.com)
  • Full-time Windows Systems Engineer: $70,000 – $110,000 annually (Glassdoor.com)

To get experienced, expert IT employees, it’s expensive. The downside is that keeping a team of IT experts is very expensive unless you are a larger company who needs the full-time help. Temporary staff can run anywhere from $100-150 per hour, depending on the freelancer or the agency you are working through  Additionally, on a contract basis, there are usually minimum commitments for the resources.

Most small to mid-sized businesses do not need a full-time employee for each aspect of their IT department simply because there isn’t enough work to go around. There’s no need to have an expert developer on staff if you only need 10 hours of development work completed each month. A managed services pricing model provides a high-level of expertise without the full-time price tag.

WSM’s On-Demand Managed Services vs. Full-Time Team

Comparatively, hundreds of company’s leverage WSM’s On-Demand Managed Service plan, which provides access to all of the resources you need for managed services at only $89.00 per month for the service, and you are only charged for services that you pre-approved and consumed. That’s $1068 per year for the monthly service (which includes priority response, 15-minute billing increments, access to a certified team, etc.) and then, depending on the service you need, you pay the hours you use or the service itself.

So, take the assumption that your firm might need 10 hours for web development, 10 hours for server administration or backup services, and potentially 5 hours for a security vulnerability scan in any given month, staff internally for that work, would certainly cost you in excess of $15,000.00 USD, for what amounts to less than $4,000.00 in work.  The next month you may not have any technical tasks that are pressing, and the following you might have 160 hours of work.  Managing the ebb and flow of technical tasks and resources required to perform them, and the same trying to efficiently spend your IT budget can be a significant challenge.

The only person who knows the budget at your company and can determine if managed services make sense from a budget perspective is you.

Managed Services Pricing: Peace of Mind

Like the Mastercard commercials used to say, there are some things that are just priceless. In business, peace of mind when it comes to your websites, applications, servers, anything you need to do business, is priceless.

Managed services provide peace of mind to businesses by providing:

  • Predictable pricing and manageable costs
  • A proactive approach to maintenance so you don’t experience downtime and lost revenue
  • Experts who are there when you need them and respond quickly with solutions
  • Enhanced security to prevent cyber attacks
  • And more

Even if you crunch the numbers and compare a full-time staff member to a freelancer or managed services provider, often, there are benefits that one simply cannot assign a dollar amount to.

So, to answer the question, are managed services worth the money? They certainly can be. For most small and mid-sized businesses, managed services can provide a cost-effective way to manage IT tasks like migration, server performance, DevOps, development, security, server administration, disaster recovery, and more.

Find out if managed services pricing is worth it for your business

WSM has been providing managed services to businesses of all sizes for over ten years. Our plans can be layered with existing SLAs you might have with hosting providers to bring you an even greater level of support and maintenance. Speaking of costs, we’ve found that our upon-consumption priced plans are can save you more than 50% in comparison to our competitors and provide a greater level of service. Learn more about our plans here.

 

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