Why Are Managed IT Service Providers Eliminating Lower Cost Agreements?

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October 11, 2012

Traditionally, IT service providers trade time for money.  Similar to accountants, attorneys or other professional services firms, the IT business model has been hourly rate billing for projects and break/fix work.

Many Managed Services Providers (MSP) price their managed service plans in a price per system model – $X per server plus $X per desktop/laptop. The scope of service varies widely between MSPs, and some have several choices of scope.

The lower price plans have less included, and any work not included in scope is billed by the hour.

This often leads to disappointment when clients receive invoices for billable hourly charges.  Clients may not understand or remember the difference between price and cost which cause invoices to vary widely from month to month.

Over time, they pay as much or more have more things go wrong, have more arguments over charges, and feel under served – because they are under served.

Today many businesses are interested in fixed price managed IT services as opposed to an hourly rate because of the predictable monthly costs and the consistent performance.

Learn how to estimate the cost of managed IT services for your business.

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Our goal with this blog is to answer the questions you ask. If you have any questions about hourly services, managed IT services or any topic please leave a comment below or email me at chris@myitpros.com.

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