Here are a few alarming findings from the Ponemon Institute that illustrate the importance of finding the right MSP: The 2020 average total cost of a data breach in Southern Africa is R80.64M. The average cost of a full data centre outage has increased by 30% since 2010. Two hundred eighty-two days is the average time to identify and contain a data breach. 52% of all attacks are malicious. The risk and cost of doing business these days is insane. Managed IT used to be all about productivity and efficiency. Both are still valid, but today's MSP is also a security company. The following guide will lighten your burden and shed light on considerations that will help you find the right fit, lower your risk, and keep your team focused on what's most important. There is a particular emphasis on legal contract details if you get distracted by proposals, which are only marketing documents. Feel free to devour everything or jump to specific sections that most interest you. 8 Key Considerations: Responsive ServiceTechnology StandardsProfessionalism and Service ClassOwnership Structure and Financial StabilityOpen and Honest PricingAgreements and Auto-RenewalsContracts and Annual Price IncreasesEarly Termination Penalties 1 - Responsive Service - Benjamin Franklin Small and midsized businesses ("SMBs") are obsessed with response times. 'How responsive are you?' has become one of the most popular questions you can ask a prospective MSP. I’ve been in this industry since 2003 and have met countless organisations that were left high and dry in times of crisis. Managed IT services for SMBs is a relatively new industry. And many mistakes have been made over the past 20 years as providers have learned their craft on the customer's dime. Responsive service is not an accident or a function of muscle memory. It's an accumulated benefit of several variables combined to create resilient IT environments and white-glove personal attention. First and foremost, your MSP should be your Technology Advisor or virtual Chief Information Officer ("vCIO"). This person is the architect, asset manager, and quarterback of your digital estate. When this job is done well, all of your moving parts - bits, bytes, speeds, and feeds - perform at a higher level. This pivotal consulting role comes in two basic packages: basic and advanced. Basic vCIO is typically included in your fixed fee plan and bundled with Account Management if you are fortunate enough to have a dedicated contact for this. Advanced vCIO carries additional charges that coincide with their expanded scope of responsibilities, including Project Management of office moves, work from home migrations, due diligence for M&A, compliance audits, etc. vCIO engagement is the glue that lowers the risk your systems and users will require fire-drill intervention. So they help reframe the need for clients to worry about responsiveness. The big problems get eliminated before they happen. By implementing Backup and Disaster Recovery Solutions and delivering Cyber Security Awareness Training, the vCIO promotes business continuity and helps you avoid work-flow busting manual intervention. The provider and the client are then better able to unite around Service Level Targets (and expectations) prioritized by severity - P1, P2, P3, P4 - to deliver maximum business value and organic responsiveness. 2 - Technology Standards I'm going to let you in on a little secret: leveraging business systems built on standards is ground zero for powerful, responsive IT environments. Every laptop, docking station, wireless mouse, keyboard, monitor, and peripheral is an integral part of your digital architecture. Each component matters because all moving parts must play well together. I learned the importance of standards in the early '70s when I had zero luck constructing a building using Lincoln Logs, Legos, and random pieces from my Erector Set. Monitors from different manufacturers require different video inputs. Are you excited to plug in your new Dell Monitor? Not so fast, the cables from your old Viewsonic will not work. Now you'll have to wait a few days. We're just scratching the surface here. Apply this same logic to cloud applications, servers, switches, firewalls, software licensing, low voltage cabling, backup appliances, and the potential for problems is pronounced. Standards help dramatically increase the probability that everything communicates. Standards put the math on your side, especially when coordinated with the useful life of your digital assets. 3 - Professionalism and Service Class Are you talking to MSPs who happen to be in the same service class? You will more than likely require a peer level partner. In addition to visiting their office and meeting their team, be sure their professional credentials meet your exact criteria. Regulation and Compliance expertise is a two-way street. Every business has regulation and compliance requirements. Your provider needs to not only have the expertise to advise you - GDPR, HIPAA, NIST CSF, PCI, SANS Top 20, SEC, SOC 2, SOX- they also need to be compliant with their industry's prerequisites. Their network operating center will be communicating with yours, and your assets are at risk if they happen to be compromised. Does their team have the industry certifications to support your environment now and in the future? With Microsoft taking over the business world, the cloud is here to stay. Here's a quick list of must-have bonfides: Microsoft Azure Administrator (AZ103)Certified Meraki Networking Associate (CMNA)Cisco Certified Design Associate (CCDA)Cisco Certified Network Associate (CCNA)Cisco Certified Network Associate Security (CCNA Security)Microsoft Certified Solutions Associate (MCSA)Microsoft Certified System Engineer (MCSE)Microsoft Certified Trainer (MCT)MSPAlliance Cyber Verify (MSPCV)MSPAlliance MSP Verify (MSPV)VMware Sales Professional (VSP) Confirm they support all of the major manufacturers and applications in your environment: Apple, AWS, Azure, Cisco, Datto, Dell, HP, Lenovo, Meraki, M365, Microsoft, Nextiva, Polycom, Proofpoint, Ring Central, Samsung, VMware, Veeam, and Vonage. If anyone offers you space on one of their home-brewed file server applications, run! You can't expect to stay with any MSP for the rest of your life, so you need your assets to be stable, secure, and portable. Who else can vouch for the professionalism of the MSP you are considering? Membership in established industry associations like HTG Peer Groups and performance-based awards provide additional clues. MSPs require specialized insurance coverage, which goes beyond standard errors and omissions ("E&O") policies. Does your prospective IT firm have Technology E&O for their cloud computing and managed services practice? Do they have the right amount of cyber liability, contractual liability, general liability, and property coverage? Don't be timid about inquiring further. 4 - Ownership Structure and Financial Stability Ownership structure and financial stability are closely related. Are you required to work with a public company? In the early 2000s, I worked for a private VoIP provider, and we lost a deal to Vodacom. The proposal didn't head south because we weren't a great fit; their board of directors wanted maximum financial transparency. Public companies have financial statements, stock performance updates on Yahoo Finance, and 24/7 news stories. You know how they're doing. You also know their chances for long-term success are much greater than a 20-person firm with R20,000,000 in annual sales. Private companies have the luxury of keeping sensitive information much closer to the vest. That's why it's essential to bring your concerns to their attention. Will they provide official documentation like third-party audits? Are they in good standing with the Better Business Bureau? Have you checked their Dun & Bradstreet report? Check Google for lawsuits, liens, and client reviews. It would be best if you also explored their profile online. Be careful with partnerships. There's a good reason they never put Guy Fieri in the same kitchen with this hothead. Partnerships without buy-sell agreements can lead to nasty breakups that leave clients exposed. It's the same story with business partners who happened to be married. Will the circle remain unbroken? More importantly, will your network remain unbroken? Are you talking to an MSP who is owned by a private equity firm? Private equity groups are acquiring a lot of smaller (and struggling) IT providers. These Wall Street players have aggressive goals and tight timelines to restructure, cut costs, realign, increase profitability, then flip entities to other buyers. Can your organization withstand the chaos of a merger or a new owner? You may start with a company you love and end up with something different. 5 - Open and Honest Pricing How are you going to be charged? The billing model is critical to understand before you sign anything. Fixed Fees Some MSPs charge a fixed-fee for monitoring, managing, supporting, and securing all of your IT systems and users. Depending on the MSP's tolerance for risk, they may charge you a lower fixed fee if your systems are standardized and up to date; or a higher rate if your systems haven't been updated since the Obama Administration. After the rate is established, the pricing would typically go up or down as your IT system footprint, machine quantity, or user headcount expands or contracts. The same model can be applied to a fixed fee agreement that only covers back end IT systems or user help desk and support. The former is popular in one scenario, known as Co-Managed IT, when the client has full-time employees who handle lower-level support requests. The latter is favoured when the client has back-end IT systems covered by full-time staff, and they need an MSP to handle the lower-level support requests - M365 support, password resets, and remote printing mishaps. Gold, Silver, and Platinum plans This is a good, better, best approach that makes it easier for less technical buyers to decide. By employing a menu approach, the MSP can shorten their sales cycle with pre-packaged options today's Internet buyer can understand. Potential problems emerge when the client signs up for a Gold plan and later decides they need services only available in the Platinum plan. You may also encounter plans based on a very attractive minimum monthly budget, such as R8000 per month, with metered billing amounts that apply to your monthly allocation. And part of this may also cover essential automated monitoring tools. Hourly fees may be tracked in 15-minute increments. If the remote prices are R450 per hour and the onsite support is R595 per hour, your R8000 budget gets eaten up quickly. Hey, this sounds like a pay by the drink arrangement? It is. It's also a recipe for the client to cherry-pick when to engage their provider. Because every time you open a service ticket, the meter is running. Some companies love being in control of everything, but you will have to determine whether your IT experience puts you in the best possible position to call all the shots. Strategy You also run the risk of overlooking the strategy piece; because you become programmed only to engage when there's a problem. This allows chronic flaws - undetectable to the non-technical mind - to snowball into much bigger dilemmas: data breaches, backups that are not working, malware infections, etc. Finally, out of scope charges arise in every pricing plan. Make sure you are crystal clear on project fees in advance. Ad hoc, after-hours, and weekend fees are the most expensive. Hourly block agreements are less costly because they're negotiated in advance. 6 - Agreements and Auto-Renewals Most MSP agreements are created by law firms that specialize in technology. They have a knack for creating templated documents, fine print, and giant paragraphs with compound sentences that will put you to sleep in seconds. Be sure to pour an extra cup of strong black coffee (or three) for this phase of your selection journey. Are you clear when the agreement begins and ends, as well as the existence of an auto-renewal? Many automatically renew for additional periods of one year at the end of their initial term unless either party gives the other written notice of non-renewal, at least sixty days before the agreement's end. Suppose your term is 12, 24, or 36 months; set Outlook reminders 90 and 60 days shy of the renewal. (I added a redundant reminder 30 days earlier just in case we have any procrastinators in the audience.) 7 - Contracts and Annual Price Increases Inflation has never met a stranger it didn't like. Since annual price increases are inevitable for everyone, any upticks should be mutually agreed upon in advance by both parties. Make sure you are comfortable with the MSP's formula. Fee hikes tied to percentage changes to the Consumer Price Index ("CPI") for your particular metropolitan area are an excellent place to start. This might mean a price escalation that is less than or equal to the prior 12 months CPI. And it could depend on whether your pricing has not been increased within the preceding 12 months. It's relatively common for clients to negotiate lower pricing upfront, but the MSP must protect itself and recoup costs later in the agreement. Be sure you understand these numbers. If you're not paying now, you are probably going to be paying later. 8 - Early Termination Penalties Providing quality MSP services and paying to receive quality MSP services is a significant mutual investment. It's expensive for both the provider and the client if the relationship is not successful. Adverse outcomes have considerable hard and soft costs for all. Does your prospective provider have protections that take your risk into account? Any language allowing you to terminate without penalty works in your favor if the service provider is guilty of breach. On the flip side, many service providers have termination fees that are relevant if you are in breach of the agreement. For an extreme example, if you sign a 24-month deal and don't comply with the provider's guidelines for requesting support (and you decide they have lousy support), then you cancel in month six; you may be on the hook for 50% of the contracted monthly fees for the next 18 months. Some companies are more casual about letting you out of an agreement. Who wants to be in a bad marriage? Larger MSPs, including public and private equity-backed ventures, tend to have sizable in-house legal teams whose primary job is revenue retention via contract enforcement. Smaller private entities don't typically have the infrastructure to hold your feet to the fire. It's way too expensive for a 20-person firm. Plus, those situations are seldom pleasant. What's Next? Now that we've looked at eight critical considerations, what's next? I recommend you and your IT Steering Committee select three MSPs in the same service class - so you are making an apples to apples comparison - and be very candid about your budget and the problems you wish to solve. This exercise will reveal if they have the expertise, integrity, and discernment to be trusted business advisors. Are they saying anything to make the sale? Do they want to rip and replace significant parts of your IT systems right away? Or are they listening and trying to learn before making serious recommendations? Finally, you'll want to get a few client references before you sign with your winner. Get in touch with us online to discuss your IT requirements today. Call us in Johannesburg on 011 435 0450, Cape Town on 021 879 1950, Durban on 031 331 0735

Managed IT Services PRICING The cost of Managed IT Services can vary widely. Fees range between R100.00 to R250.00 per user per month. Factors that affect cost are headcount, the size and sophistication of your IT systems, and whether you outsource some or all of the technology management functions. Your average 50-person firm can expect to pay around R5,000.00-R12,500.00 per month for fully managed IT services. Want a general idea of the pricing for managed IT services? Thinking about outsourcing your IT for the first time? Are you planning to replace your managed IT services provider or “MSP”? Need to augment your in-house team with some extra hands? Or are you doing some research to make sure your current fees are competitive? I’ve been in thousands of conversations on this topic since 2002. Two things ring true: the evaluation process is confusing and overwhelming. Most MSPs sound the same. Everyone seems to have a sales agenda. I bet you're tired of hearing 25-year-olds who look like catalog models say, “I promise it’s plug and play.” (Me too. It’s not true.) At Multi IT & Telephony Solutions, we may be in the business of managed IT, but our goal is to help you find the right fit. Even if that happens to be with someone else. We prefer to be a guide in your journey, and let problem-solving alignment be the spirit that guides any further engagement. The next steps always happen for a reason. Are you ready to better understand the factors that affect managed IT services pricing? Let’s approach the topic with eyes wide open. Getting an exact number depends on a host of factors What is your headcount?Do you have full-time IT employees?Do you need fully managed IT services?Do you need co-managed IT services?What’s already in the cloud and what’s onsite?Do you require a virtual chief information officer (vCIO services)?What is your geography?What is your industry?Where are you in the technology lifecycle?How many devices will be managed?What kind of coverage do you require?How much data do you need to be backed up?What is your operating maturity level?What type of pricing model makes the most sense for you?What are the set-up costs? Key factors that influence managed IT services pricing: What is your headcount? Do you have thirty employees or 300? Or just getting started with a few colleagues? I’m glad you’re breaking out the company directory. This number is very important in determining your coverage needs because most IT firms base their monthly pricing on your headcount. Do you have full-time IT employees? Do you have any full-time IT employees or “FTEs”? If so, is their specialty line of business applications or infrastructure? Both disciplines are very different and seldom interchangeable. Capterra has an online directory of more than 700 software categories. As you might imagine, there’s a Line of Business Application for every vertical: AccountingArchitectureBankingConstruction/DevelopmentEngineeringFinanceHealthcareInsuranceLegalManufacturingNonprofitReal EstateAnd more Application specialists manage software programs in-house. By department or functional roles within the organization. These subject matter experts contract with software developers or certified resellers. SAGE 50, Salesforce, HubSpot, and Right Networks (Hosted QuickBooks), etc. You will not be contracting with an MSP to do any of the following activities on your behalf: Run income statement reports within your ERP systemConduct eCommerce user trainingSet up Buyer Personas within your content marketing software What is your in-house help desk specialist up to most of the time? Infrastructure duties. These include: Password resetsCorrecting everyday office equipment operating failsProject managementAudiovisual set upWifi configuration Whatever MSP you hire will be filling in gaps related to infrastructure. Understanding which skill set gaps you are trying to fill is very important. Do you need fully managed IT services? Fixed-Fee Managed IT Services include: User Help DeskConsultingMonitoringManagementTechnical SupportServersCloud applicationsMobile devicesTabletsWorkstationsEmailWeb hostingTelecommunicationsCybersecurityBackupTech vendor management and more Do you need co-managed IT services? Fixed-Fee Co-Managed IT Services include: ConsultingMonitoringManagementTechnical SupportServersCloud applicationsMobile devicesTabletsWorkstationsEmailWeb hostingTelecommunicationsCybersecurityBackupTech vendor management and more This hybrid plan creates a partnership between the MSP and the FTE at the client site. The MSP handles all the heavy lifting. And your FTE tackles lower level, every day, user support requests. Why is this the best of both worlds? You get the physical presence and “grab by the collar” convenience of an IT generalist. Along with a full-service MSP "owning" mission-critical business tools. From our experience, this FTE is almost always the liaison with the MSP. And will engage the MSP whenever they get in over their head. What’s already in the cloud and what’s onsite? If Cloud Solutions constitute the majority of your infrastructure, you're in luck. Remote management will be much easier and less expensive for your IT provider. This means more favorable pricing for you. The pricing goes up a bit for organizations with a combination of cloud and on-premise equipment. The provider will need to send engineers on-site from time to time which runs up their expenses (and yours). The amount of travel will also be a factor. Virtual chief information officer engagement How much guidance do you need from a Virtual Chief Information Officer or “vCIO”? Some businesses are further along in their digital transformation. So they only need vCIO light. This could amount to a few hours a month and is standard with most fixed-fee agreements. Other organizations may need a much deeper level of strategic engagement. Do you have demanding compliance requirements? (New Cybersecurity Compliance Frameworks are everywhere.)Are you growing?Opening new offices?Trying to clean up legacy infrastructure to be more attractive as an M&A target?Did you recently suffer a major data loss or ransomware attack? These scenarios always demand more time and attention. And potential extra costs deserve close review in the discovery process. For a deeper dive into examples, see Professional Services. MSPs love to promote vCIO services. Remember how I said most of us sound the same? vCIO engagements differ from one provider to the next. Some MSPs deploy commissioned salespeople and account managers who have lower-level technical skills and seniority. Some MSPs dispatch senior-level executives. This team is non-commissioned and has a variety of technical certifications. These factors have a direct bearing on what you should expect to pay. Your geography Are you a single location?Do you have several locations around your city, state, or across the United States?Is each location traditional office space?Any shared workspace arrangements like We Work, Regus, or Industrious?What about work from home or a combination?Are you in major cities with modern Internet infrastructure? Or do you also have a partial footprint in more rural areas with less reliable access?Physical addresses are also important if your agreement calls for an onsite presence. Way out places may be harder to accommodate the demand for instant dispatch. Your industry Every industry has different requirements related to technology, regulation, and compliance. Good news: Basic technology infrastructure is very similar, if not the same, across different industries. Most managed IT providers will be familiar with the following well-known usual suspects: AppleAWSCiscoDellHPLenovoMicrosoft You can buy many of these brands on your own. But there's an easier way. One that will save you time and money. Take advantage of the relationships most IT providers have with established wholesale distributors. Axiz, Tarsus, Pinnacle and First Distribution are a few of the larger distributors in Southern Africa.  Each distributor stocks thousands of SKUs. And every last item is searchable within the MSP's Professional Services Automation system. "PSA" solutions empower engineers and project managers to help you get: Better pricingFaster deliveryFactory-approved warrantiesMore predictable project completion timelinesLarger volume orders at scale Popular PSA vendors include N-Able Solarwinds, Kaseya and Autotask. PSA tools allow MSPs to leverage a repeatable process that is harder to execute on a one-off basis. Going through Amazon sellers, New Egg, Tiger Direct, Office Depot, or Best Buy can be risky. Every year we talk to businesses who thought they were getting a good deal. Until they received desktops installed with home/office versions of Windows 7, 8, or 10. These operating systems were not only incompatible with their network. They were also not approved by Microsoft for business use. The compliance plot point is not a trivial one. Microsoft fines run thousands of dollars per incident.  Consumer-grade hardware has other issues too: limited warranties, typically one year versus three years or longer, and factory, preinstalled bloatware which can impact system performance. IT Providers will also administer and manage all hardware and software details: Set-upSystem IntegrationSpecifying the right models and versionsUpdatesMoves, adds, and changesContract renewal deadlinesReturn Merchandise Authorization (RMA) for all warranty issues and returns It’s a common practice for IT providers to bundle recurring services on a single bill. Examples include software licensing, equipment leasing, as well as service and maintenance agreement fees. This is a major convenience. But make sure you can identify these pass-through expenses. They’re different from IT service management fees. These items don’t represent a revenue stream for your service provider. Unless they are being marked up. More often than not, these fall under the sunk cost classification. Every IT service evaluation should bring these distinctions to light. Otherwise, your current charges or new proposed fees may appear inflated. On the flip side, an IT provider may submit a proposal that doesn’t include everything you need. Why? It makes their offer look less expensive. Then once you sign the agreement, they’ll circle back and mention you need to add 45 M365 licenses. This is not always an underhanded move. Many IT companies assume you are already aware of the way it works. Here's the skinny: Microsoft pricing is available all over the InternetVisit Microsoft 365 Pricing Plans, it’s the same for everyoneYou can buy a single Microsoft 365 Business Standard subscription for R192.80 a monthOr your MSP can buy the same license on your behalf for the same amount of 192,80 a month and they receive a commission of R5.50 One visit to Microsoft's website is usually all it takes for most people to want someone else to figure it out. Where are you in the technology lifecycle? Every piece of technology in your organization will expire at some point. This is a natural and predictable part of The Technology Lifecycle. The trick is to stay ahead of its fail date. Some providers will agree to manage your environment “as is.” But they may charge you extra if your environment is nearing its end. Aging, distressed IT systems need extra attention and frequent intervention. Certain pieces may be at risk of completely failing. This is expensive to handle and almost impossible to predict. And rarely does it leave either party feeling like they’re in a win/win partnership. It’s critical to understand what pieces need immediate replacement. And which ones can be upgraded at a later date. You also need to weigh the potential legal liabilities for you and the provider. Some IT companies won’t take clients unless they agree in advance to make critical upgrades. You can’t ignore potential costs related to project work Many MSPs bill projects on a time and materials basis. The pricing will be similar if you're comparing providers in the same service class. Hourly rates for project work vary from R450.00 to R595.00 per hour Some companies will charge a lower hourly rate and not make a time commitment on completion. So the clock is running. Other companies charge a higher rate and agree to a fixed fee for the project. This means a 4-hour workstation build at R450.00 per hour is the same cost as a two-hour workstation build at R900.00 per hour - R1800.00. Most people would prefer the time savings of the 2-hour scenario. Most people would also like their rate capped at R1800.00 in the event the build takes longer. The R450.00 per hour rate would be a real liability if the build takes five to six hours. Many do. Skill plays a role in the hourly rate as well. Higher-level engineers command a higher rate than lower-level engineers. Want your projects completed quicker? A more experienced engineer is your best bet. The cost trade-off is worth it. Differences pop up when you compare mid-market IT providers with mom-and-pop IT, providers. The former may use a network of well-known distributors. The latter may get products from other vendors. And they could be after-market, consumer-grade, non-standard, or refurbished. Number of devices and size of your digital estate Getting an exact quantity is very important. What is being managed? ServersWorkstationsTabletsMobile devicesFirewallsBackup appliancesWireless access pointsPhone systemsSwitchesPower backup appliancesSecurity cameras Does each employee have several devices or is it a one-to-one relationship? Does your network include home computers that need coverage and protection? It’s important to get an accurate inventory of every endpoint in your digital estate. Coverage model Do you need 24/7 unlimited remote and onsite support? Automated tools are now commonplace in the IT world. Around the clock. Monitoring. Managing. Securing. Check times four! This is a must-have with today's elevated cyber risk. These services are basic table stakes that businesses have come to expect. Some providers will take it a step further (pun intended) and put boots on the ground. Even in the middle of the night. This is quite different than the following scenario: Your primary file server crashes at 2 am.Support@yourITprovider.com receives an automated alert.This opens up a service ticket.The MSP starts working on the problem the following business day. Unlimited remote is a different animal. It's 2 am and something in your office network or datacentre crashes. An engineer from your service provider is touching the ailing equipment within the hour. White glove, onsite service will always be more expensive. The same is true if you need onsite IT resources or staff augmentation for specific projects. Does your organization have several hundred employees? Certain user groups may need more guidance and manual intervention than others. Large sales teams at pharmaceutical companies. Or older volunteers at a non-profit. This can be expensive unless the IT provider is sending a very green employee onsite. Will a beginner cut it with your team? If not, a more experienced IT professional will be more expensive. It's unavoidable. They're more expensive for your MSP to hire. R900K a year to be exact. Backup volume Do you have 1TB of data or 500TB?Would you like it backed up onsite every fifteen minutes?Does it also need to be replicated offsite to a cloud and verified nightly?Do you want the ability to run everything in the cloud in the event you experience a major disaster?Need extra-added redundancy?Want your data backed up and stored across several different geographical areas? Your backup needs can be simple, complex. Or somewhere in the middle. Each scenario has different costs. Operating maturity level Service Leadership, Inc. is an MSP consulting firm, known for its research on Operating Maturity Level or “OML.” OML refers to specific stages of your business journey: BeginningEmergingScalingOptimizingInnovating You advance from the first stage to the fifth stage by leveraging technology. And outsourcing everything that is not a core competency. There is a heavy emphasis on strategy, standards, and best practices. Efficiency, scale, and repeatable processes are also important. The end game is to reach higher levels of performance and profitability. Your OML will influence the kind of IT provider you can afford to partner with and vice versa A business with Beginning OML will not be a match for an MSP who is Scaling or Optimizing. The Beginning organization is not likely to be an advocate of technology standards. And the Scaling or Optimizing provider would not agree to support an IT environment like this for a fixed fee. Too unpredictable. It would be a reactive, frustrating, money-losing proposition for both parties. While an Innovating business could get a good deal from a Beginning MSP, I can't imagine they would be able to keep up. The type of MSP pricing model employed Both Service Leadership and TruMethods use the term All In Seat Price or "AISP." This is a quick and easy way to quantify the fees charged by best-in-class MSPs. These are companies you may have heard of because they get rated by organizations like the Inc. 5000, MSP 501, and MSP 500. Each organisation sponsors annual award programs and ranks the top businesses and MSPs in the world. These are performance-based contests where participants must submit notary-verified financial data. Why does this matter? The MSP industry has a heavy concentration of private companies. And the presence of impartial, third-party evaluation standards provides much-needed transparency. It also nurtures a competitive spirit. This drives innovation and blesses businesses that work with MSPs. The AISP model recommends a price range of R100.00-R250.00 per month/per person for Fully Managed IT Services. So an organization with 20 people might pay R2,000 to R5,000 per month. An organisation with forty people and Co-Managed IT might pay the same amount. Not because they’re better negotiators. Part of their service is in-sourced. Part of their service is outsourced. Service Leadership also mentions “Anything For A Buck” IT companies. AFAB for short. These companies represent an astounding 43% percent of the market. Yes, AFABs definitely have lower AISP options than their higher OML counterparts. But be careful. Many are operating at gross margins below 3% or break even. Make sure you conduct extensive due diligence before committing to an IT partner. Do they have O&E or cyber liability insurance? Are they SOC 2 compliant? You have a business to run with assets at risk. And you want to make sure your provider is going to be in business as long as you need them to be. Do I have to sign a contract? Standard contract terms are 12, 24, and 36 months. More experienced operators will present you with a Managed Services Agreement with clear language and protections for both parties. The more accomplished (and confident) of that bunch may offer you a no-questions-asked 60-day out clause. This is a solid move for MSPs who pick the right clients and have the wisdom and compassion to part ways with bad fits. What are the onboarding or set-up costs? Some providers charge. Some do not. Those who don’t charge typically do less onboarding. It’s that simple. It’s important to understand what is involved with comprehensive onboarding: The process takes sixty to 120 hours and spans sixty to ninety days.It includes an executive kick-off meeting with several site visits and interviews.Some providers issue 100-point punch lists to guarantee no stones are left unturned.Engineers and project managers (R75,000.00 to R125,000.00 a year resources) handle everything. Coordinate the transition with your existing vendors. Document all IT systems and users. Create new hire/exit checklists. Deploy management tools. Migrate data and mailboxes. Conduct security assessments. Implement MFA.Many providers conduct user orientation to introduce the service and demonstrate the best way to request support. Project management of overlapping IT services is critical. Don’t abruptly pull the plug on your existing provider when you decide to make a change. Hot cuts are almost always a bad idea. A 4-week overlap is recommended. This allows for a smooth transition. It also gives your current provider an incentive to cooperate with a competitor. And you avoid surprises. Providers who do comprehensive onboardings may still waive the charges. But they will probably lock you in for a longer term. Truth bomb: IT providers lose money when their employees work for free. And a 36-month term (or longer) may be the only way they make up for the loss. Onboarding costs are usually correlated to your monthly rate. So, if your monthly rates are R2,000.00, R4,000.00, or R6,000.00, your onboarding charges should be in this general neighbourhood. Your learning journey The size and scope of your IT systems and headcount are the biggest drivers of cost. As a general rule, your expense increases when the number of moving parts increases. The value of your assets, as well as your risk tolerance, are also crucial considerations. Do you have special compliance requirements? Are you concerned with privacy and safeguarding intellectual property? Every business is unique. A management consulting firm with ten principals will have drastically different needs than a ten-person periodontist practice. Interested in learning more about factors that affect managed IT services fees? Along with exact costs? The Multi IT & Telephony Solutions team has decades of experience helping businesses figure this out. And we look forward to guiding you. Contact us online or call our offices in Johannesburg on 011 435 0450, Cape Town on 021 879 1950 and Durban on 031 331 0735

Managed Services has become a fashionable term. And sometimes this label has nothing to do with technology. This article aims to provide an IT-centric definition, present the six defining traits, and explore the associated benefits, so you know how to identify and choose a genuine MSP. What are Managed IT Services? Managed Services is the proactive management of an IT (Information Technology) asset or object by a third party known as an MSP, on behalf of a customer. The operative distinction that sets apart an MSP is the proactive delivery of their service compared to reactive IT services, which have been around for decades. (MSP Alliance) According to MSP Alliance, MSPs typically have the following six distinguishing attributes: Recurring Revenue Model Most MSPs have a fixed-fee billing model that allows them to provide their clients with comprehensive solutions and predictable expense management. For this to work, mature MSPs will always lead with strategy, delivered by strategic account managers and vCIOs. They’ll challenge your way of thinking to solve problems rather than agreeing to offer bandaids. The best prescription for long-term success is finding a partner who will align your strategy and budget then apply both to a proven IT process based on standards and best practices. Does your definition of long-term success include growth and performance enhancement with lower risk and liability? Make sure you’re with a genuine MSP. If you have a R700K per year employee babysitting your IT provider and running interference to keep a lid on costs, every time a support issue arises, you may want to investigate. Is your IT provider transactional? If they are charging you to fix the same things repeatedly, the answer is yes. It’s more expensive than paying a fixed fee.It creates bottlenecks.The person playing gatekeeper is almost always more productive, spending more time on their core competency.You are more likely to experience a significant operating fail with high payroll costs and PR backlash.Proactive Management MSPs who proactively manage their clients create quiet, stable, and resilient IT systems. Chance always favors the prepared. If your IT systems were a person, would you prefer they eat right, exercise regularly, and sleep 8 hours per night, or pig out, binge on Netflix, and pull all-nighters? It’s a binary choice between a healthy lifestyle or regular doctor visits, expensive medication, and surgery. Planning is key. Proactive MSPs will map out your IT budget a year in advance and systematically walk you through their recommendations. They know precisely how much time it takes to support a healthy environment and choose this approach over reactive measures every time. There are only so many hours in the day; why waste them on preventable emergencies? The following qualities are hallmarks of the proactive mindset: Notifying you before there’s an issue.Helping you create an Acceptable Use Policy.Providing Security and Compliance Guidance.Delivering Cyber Security Awareness Training.Updating all equipment before it reaches end-of-life status.Upgrading your Internet from T1s or Fiber to SD-WAN.Implementing Multi-Factor Authentication (MFA) BEFORE a cyber-incidentMaking sure you have the right Office 365 licenses in place. Does your IT provider lead the charge, or do you have to take the reins? Cloud Computing Expertise Microsoft defines Cloud Computing as the delivery of computing services—including servers, storage, databases, networking, software, analytics, and intelligence—over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale. You typically pay only for cloud services you use, helping you lower your operating costs, run your infrastructure more efficiently, and scale as your business needs change. Most MSPs consider the cloud an essential ingredient of managed services rather than a separate category and can administer thousands of services on your behalf. Unless you’re an enterprise business (500+ employees) with a large in-house IT department, you’re not going to have the expertise or the time to deal directly with providers like AWS, Microsoft, Google, IBM, Oracle, VMWare, Dell and, Alibaba. Best in class, MSPs embrace the cloud and will be your guide every step of the way. The importance of moving to the cloud cannot be overstated. Why? Premise-based hardware and software solutions are going the way of AOL email addresses. Is your MSP trying to sell you a new on-prem server? Be skeptical unless you have an application that won’t function under any other circumstances. Network Operation Center (NOC) MSPs always have some form of Network Operation Center (NOC) in place. Fifteen years ago, MSPs built their own NOCs. Shortly after that, many moved their servers and client assets to large data centers like QTS, where they rented rack space. These days, MSPs lease virtual capacity in NOCs - for the same reasons, they advise you to shift as many assets as possible to the cloud: cost-containment, business continuity, flexibility, future-proofing, system redundancy, collaboration, simplicity, cybersecurity, compliance, and more. The NOC is a basic table stake and serves as the true nerve center of any mature MSP practice. It happens to be home and command central to each piece of technology that is cost-prohibitive for most SMB’s and quasi MSPs - unless they have a trust fund. Annual fees run close to $750,000 and are only cost-justifiable when an MSP can amortize these wholesale expenses across a client base of 50-100 businesses who are committed to paying fixed and predictable monthly fees. Remote Monitoring and Management (RMM) Speaking of NOCs and $750,000 annual fees, RMM tools deployed from NOCs give your MSP granular visibility and control of each endpoint in your digital estate. RMM is part of an entire ecosystem of integrated management tools that monitor, automate, update, report, prompt alerts, and more on each of the following departments and service categories: Professional Services Automation (PSA)Tech SupportMobile Engineer DispatchVendor Technical AssistanceServersVoIPInternet ConnectivityPower OutagesWorkstationsMobile DevicesCloud ApplicationsFirewallsSIEM DevicesNetworksProcurementProject ManagementBackup and Disaster RecoveryDocumentation Can your MSP manage thousands of endpoints without getting in the car? Help Desk Genuine MSPs always have some form of Help Desk and a multitude of ways for their clients to engage with support: phone, email, website, a desktop shortcut, text, and chat. Help Desk ties it all together with a friendly handshake and generation of a trackable service ticket, classified based on the severity of your issue. Priority One, Priority Two, Priority Three, and Priority Four are popular rankings and dictate the required resolution’s time-sensitivity and which MSP resource needs to be engaged. A Priority One means all systems are down. Let’s get some network engineers on this right away. A Priority Four means someone can’t find a folder in OneDrive. This goes to a system engineer and has a longer turn-around time. The Help Desk not only allows the MSP to get a constant pulse on the health of the client’s environment, but all tickets are also tracked and rated by the client. This provides insights to reward top-performing tech support personnel and offer training when improvements are warranted. Get in touch with Multi IT & Telephony Solutions today online, or by phone in Johannesburg 011 435 0450, Cape Town 021 879 1950 or Durban 031 331 0735