There are many reasons businesses choose to go with a managed services provider, such as proactive IT strategy, strong user support and access to a team of IT specialists. One of the most common motivators we see is predictable IT costs. With managed services, a recurring monthly payment covers user support, network maintenance and basic security.
That said, it’s important to understand that a company will likely evolve over the course of a long-term partnership, which will potentially warrant a change in the monthly managed services cost. This does not always mean a price hike! Pricing is dynamic in both directions, meaning clients may see a reduction or an increase depending on their individual circumstances.
The 4 factors of price
So, what goes into determining the price of managed services in the first place? At MyITpros, we look at the following four characteristics when putting together a pricing model:
- Total number of users to be supported
- Total number of systems to be supported
- Number of locations needing support
- Overall complexity of the technical environment
We use these factors not only to determine an initial price, but also to judge whether a company needs a price adjustment. Ultimately, accurate managed services pricing is about matching your support plan to your support needs.
MyITpros pricing philosophy
In our agreements, we state that any user or system change greater than 10% may elicit a price adjustment, but this is not a hard and fast rule. At MyITpros, our philosophy is that our clients will never be surprised by a bill. Rather, we consider pricing to be a constant conversation that ensures all parties are educated and aware. To us, an adjustment represents not a change in price, but a change in scope.
Circling back to the four factors outlined above, the scope of your services may be changing due to the addition or subtraction of users, locations or technology. For example, maybe your business signed up with us when you had a user count of 20 and a server that hosted all your applications. Fast-forward to today, when your user count is closer to 30 and you’ve moved your applications to the cloud, meaning we no longer need to support the server. In short, your users increased and your technology decreased. To determine how this will affect the support we need to provide, we’ll evaluate the new landscape and work through the scope change in a client conversation. We recognize that because companies are dynamic in their needs and technology, our plans need to be dynamic as well.
It’s important to note that there is no standard formula for pricing adjustments, so if your business is on a fast growth track or you’re planning to drastically alter your technological environment, you can expect to have that price adjustment conversation sooner rather than later. With this in mind, don’t be afraid to ask about your MSP’s method of evaluating pricing when you are signing on.