What are the costs for IT Support and Managed IT Services and what pricing model works best for your organization?
How much does IT support cost in the Minneapolis/St. Paul area?
If you are a medium-sized business in the Twin Cities and possibly in the market for an IT support or Managed Services Provider, this is probably one of your first questions.
As a long-time IT Support and Managed Services Provider in the Twin Cities, we get this question often.
And we get it! Price matters, your budget matters, and getting a handle on technology is such a critical part of your future.
As you might imagine, the problem with answering this question is that IT Support and Managed Services have so many variables that it can be hard to get the price of what IT and technology support will truly cost your organization.
Still, we will do our best here to give you clear and realistic price ranges and ideas as to what businesses of your size pay for IT Support and Managed Services in the Twin Cities.
So, let’s get to it …
IT support costs
Businesses in Minneapolis, St Paul, and the surrounding areas can expect to pay the following for IT support:
Basic IT Support (flat monthly fee) – $69 to $89/user per month
- A 30-user network would pay between $2000 and $2700 per month
Managed IT Services – $99 to $129/user per month
- A 30-user business would pay between $2900 and $3900 per month
Advanced Managed IT Services (including robust cyber security) – $110 to $175/user per month
- A 30-user business might pay $3300 to $5300 per month
Premium Managed IT Services (perhaps with an onsite engineer) – $150 to $300/user per month
- A 30-user business might pay between $4500 and $9000 per month
NOTE: For the purposes of this article, we are not going to include Break/Fix IT Services which would cost $75 – $250/hour. Today, most businesses can not afford for their networks to be down, so a “wait until it is broken and then call someone to come and fix it” approach does not work. Most businesses in the Minneapolis/St Paul metro have enlisted the Support of IT companies that are more proactive and provide managed services at a flat monthly fee. These companies focus more on preventative Support to reduce the amount of downtime that a business might experience.
How can prices range from $69/user per month to $300/user per month?
$2,000 – $9,000/month for a company with 30 users seems like a crazy, huge range)
The price difference reflects the differences in services included in the monthly costs. The purpose of this article is to shed some light on why you find such a wide range of prices in the Minneapolis market.
Basic IT Support: Cost $69 – $89/user per month
There are a lot of IT Service providers in the Twin Cities that provide Basic IT Support. However, they charge a lower price per user and offer fewer services for this lower price. As a result, they provide good service to their customers most of the time, but it’s common for the quality and timeliness of support to suffer during the contract term.
ISSUE RESOLUTION AND TIME TO RESOLUTION
Some of these organizations focus on sales rather than on support, as seen in the number of salespeople employed versus support engineers. There is often an excess of staff turnover in these organizations. This is due to the volume of support requests that the help desk members address every day. Because of lower monthly fees collected from their customers, these companies require their help desk members to support more endpoints, resulting in reduced quality and added time to resolve support requests.
BASIC CYBER-SECURITY PROTECTION
IT companies offering Basic IT Support services usually provide basic cyber security protections also. They will typically install and monitor a network firewall, network antivirus, and a backup system to protect company data. In today’s hyper-crazy, criminal cyber world, these services provide a good starting point for protecting a network … but this basic offered great does not protect the network in a robust manner. This does leave the business data and network resources somewhat vulnerable.
Additionally, the lower costs are sometimes made up through high-cost project work later in the engagement. Therefore, there is typically a lower cost for onboarding the new client but a much higher cost for project work once the client is onboarded and under contract.
ADVANTAGES of Basic IT Support
- Lower onboarding costs
- Lower monthly recurring fees
- Easy to get onboarded with the provider
DISADVANTAGES of Basic IT Support
- The quality of support can be erratic
- The time to resolution for issues can be much slower
- The cost of necessary project work can be much higher (and unexpected) once under contract
- Business data and network resources can be vulnerable to cyber attacks
When the primary IT concern is LOW COST, then IT companies offering Basic IT Support services are a perfect fit.
Managed IT Services: $99 – $129/user per month
There are several very good Managed IT Services providers in the Twin Cities metro area. These companies are more mature in their approach to providing services to their customers. Most of these companies charge between $99/user per month to $129/user per month.
QUALITY SUPPORT AND FAST RESOLUTION
Solid Managed IT Service providers (MSPs) invest more in their support teams, which is reflected in the number of salespeople versus the number of service people in the organization. The quality and the timeliness of the support are reflected in this focus on service. In addition, by charging slightly higher monthly fees, these MSPs are better equipped to handle IT issues on time.
Because these technology issues are addressed much faster regularly, the users within the company face fewer distractions and can be much more productive. In general, the support provided by a quality MSP is less erratic and much more predictable.
MSPs also invest more money in the tools that they use to support their customers. They also invest in the tools that they provide to their customers to keep the networks safe from criminal cyber activities. These tools allow the MSPs to effectively monitor their customer networks, resulting in the prevention of network disruptions and downtime.
GOOD CYBER-SECURITY PLANNING AND BUDGETING
Most MSPs are very aware of the threat of cyber-attacks and do a good job of staying on top of the new and dangerous threats. MSPs will frequently do network scans/analyses to determine weaknesses in the cyber defenses, and then detailed plans and budgets are created to address any defects found.
Some of these weaknesses are addressed in the monthly fees, but others are addressed through additional cyber-security projects billed outside of the monthly fees. Most businesses supported by MSPs have a list of cyber-security initiatives planned to be executed in the next 6-12 months.
MSPs tend to spend more time and effort on the front side of customer engagements to assure that standard IT practices are introduced and adopted when the engagement starts. This investment in time (and sometimes hardware and software) will cost the customer more upfront but will pay for itself with a great reduction in downtime and network issues down the road.
This upfront investment also eliminates much of the higher cost of project work or emergency work that might occur without these important upgrades and process changes to start a relationship.
ADVANTAGES of Managed IT Services
- More consistent and reliable IT Support with faster resolution times
- Much more robust cyber-security to protect the company data and network resources
- High-touch onboarding to reduce project fees and emergency projects later
- Well designed IT strategy with budgeting and timelines
DISADVANTAGES of Managed IT Services
- More expensive monthly fees
- More expensive onboarding, upfront fees
- Although cyber-security weaknesses are discovered, many of these vulnerabilities are not addressed for many 6-12 months) after their discovery. Sometimes they are not immediately addressed because of budget or other business-related reasons, but they are known and represent real danger until they are fully remedied.
Advanced Managed IT Services: $110 – $175/user per month
Advanced Managed Service Providers offer the same high-quality support services as MSPs, but they bundle additional services into the monthly fees. For example, in the Minneapolis/St Paul metro area, you will find some Advanced MSPs bundling project fees or robust cyber-security services with their managed services offering.
The most common reason that many businesses do not address known vulnerabilities within their networks is cost. They do not (or cannot) spend the money to address all of the vulnerabilities when they are discovered. This creates tension and very difficult decisions for the leadership in these businesses.
“Do we pay this large amount of money to address these known vulnerabilities, or do we wait and hope that nothing bad happens?”
UP-TO-DATE CYBER-SECURITY PROTECTIONS
The cyber-security protocols that protect these businesses need to be continually updated as these new exploits are discovered. In addition, when companies pay for their cyber-security as recurring monthly fees, these advances in the protections are typically included in the prices. This means that the newest and most protective measures are in place to protect the business data and resources.
ADVANTAGES of Advanced Managed IT Services
- All of the advantages of the MSP model mentioned above: high quality and fast support, effective onboarding to reduce excessive costs later, consistent strategy and budgeting
- Additionally, the Advanced MSP will often bundle additional services
- Specifically, Advanced MSPs will bundle cyber-security with the monthly fees to allow for more consistent spending on cyber-security and a higher level of cyber-security because of real-time updates for these services
DISADVANTAGES of Advanced Managed IT Services
- Higher monthly fees
- Usually, a higher onboarding fee that includes the implementation of the cyber-security protocols
Premium Managed IT Services: $150 – $300/user per month
Some Managed Service Providers in the US offer Premium Managed IT Services. In many cases, these services are offered to a vertical market and may include hardware or software specific to these markets. The higher monthly fees might also include maintenance packages to support particular applications that drive these businesses.
In other cases, the premium fees will include all additional project work. This allows for IT budgets to be locked in without needing additional funds to be approved for unplanned IT project work. In addition, this eliminates the excessive fees that sometimes accompany unexpected IT projects.
ADVANTAGES of Advanced Managed IT Services
- All of the advantages of the MSP and Advanced MSP model mentioned above: high quality and fast support, effective onboarding to reduce excessive costs later, consistent strategy and budgeting
- The premium fees can cover the costs and maintenance of expensive line-of-business applications
- The premium fees can cover the costs of project work allowing for IT budgets to be locked and unplanned IT spending eliminated or greatly reduced
DISADVANTAGES of Advanced Managed IT Services
- Higher monthly fees
- Higher onboarding fee that includes the implementation of the cyber-security protocols
Businesses today rely on their technology more than ever before. There are very few (if any) systems within a company that is not reliant on technology, and as such, IT needs to become part of every business budget. Businesses need their systems to be “up.”
The employees within a company need access to their data and business applications (from the office and from their remote offices). Therefore, the relationship that a business has with its’ technology provider will become more and more important as each year passes.
Most Minnesota companies will benefit from a relationship with a quality managed services provider. The world continues to evolve, and the evolution of technology is providing more opportunities than ever before. Unfortunately, this opens the door for cyber-criminal, who is also continuing to grow. Our belief is that all businesses, small and large, will be forced to continue to bolster their cyber-security posture.
Additionally, defining an IT strategy to take full advantage of available technologies will be important to businesses wanting to gain or maintain a competitive advantage in the marketplace!
Managed IT Services costs in the Twin Cities are typically between $100-$175 per user, depending on the services you need and the required cyber-security. Also, your companies size and scope, IT systems, and headcount are the highest cost drivers.
We hope this helps!
You now have a better handle on IT support costs here in the Twin Cities. So what do you do now? How do you choose?
Next Steps …
Check out these additional articles …
Thanks, and good luck in your search!
If you are further along in your search for a Managed Services Provider and would like to start a conversation with us, click on this link, and let’s connect.