Why MSP Pricing Is Confusing
If you've ever tried to compare managed service provider pricing, you've likely encountered a frustrating range of models, inclusions, and terminology that make apples-to-apples comparisons nearly impossible. One provider charges per user, another per device, a third offers "all-inclusive" packages, and a fourth bills by the hour for anything outside a limited scope.
This guide cuts through the noise. We explain the most common MSP pricing models, what's typically included and excluded, how to evaluate total cost of ownership, and what to watch for when comparing proposals.
The Main Pricing Models
Per-User Pricing
Under a per-user model, you pay a fixed monthly fee for each person in your organisation who receives IT support. This model is straightforward to budget for, scales predictably with headcount, and works well for businesses where each user has a similar IT footprint.
The potential downside is that users with many devices (desktop, laptop, mobile, secondary workstation) may generate disproportionate support volume relative to the per-user fee, which can create tension if the MSP is under-compensated.
Per-Device Pricing
Per-device pricing charges a fixed monthly fee for each managed device – servers, workstations, laptops, and sometimes network equipment. This model rewards businesses that have well-controlled device inventories and penalises those with sprawl.
It works well in environments where the number of devices per user varies significantly, or where there are shared devices not tied to an individual user. Device categories are typically priced differently (a server is priced higher than a workstation).
All-Inclusive (Flat Rate) Pricing
All-inclusive pricing charges a fixed monthly fee for a defined scope of IT management – typically covering a specified number of users and devices, with a defined set of services included. This model provides the most budget predictability and aligns the MSP's interests with the client's (fewer problems means lower cost for the MSP, incentivising proactive management).
The key is understanding precisely what "all-inclusive" means in the contract. Project work, hardware procurement, software licensing, and out-of-scope services are almost always excluded from flat-rate agreements.
What's Typically Included – and What's Not
Most managed service agreements cover the following in their base fee:
- Remote monitoring and management of servers, workstations, and network equipment
- Help desk support during defined business hours (and sometimes 24/7)
- Patch management – applying operating system and application updates
- Antivirus/endpoint protection
- Backup monitoring
- Regular reporting and business reviews
Items commonly excluded from base MSP fees include:
- Hardware and software procurement
- Major projects (migrations, new infrastructure deployments, significant upgrades)
- After-hours support beyond defined SLA windows
- Cybersecurity tools beyond basic endpoint protection
- Cloud service licence fees (Microsoft 365, Google Workspace, etc.)
- Third-party vendor management for software you own
Always request a clear breakdown of what is in scope versus out of scope before signing an agreement.
The Real Cost of In-House IT
One of the most common mistakes businesses make when evaluating MSP pricing is comparing the MSP monthly fee directly to the salary of an internal IT person. This comparison is rarely accurate.
The true cost of in-house IT includes:
- Salary and superannuation – A junior IT support person in Australia commands $60,000–$80,000 per year; a mid-level IT professional is $80,000–$120,000
- Recruitment costs – Agency fees, advertising, and management time to hire can add $10,000–$20,000 per placement
- Leave coverage – Annual leave, sick leave, and public holidays mean your IT function is unmanned for several weeks per year unless you pay for cover
- Training and certifications – Keeping skills current in a rapidly changing technology landscape requires ongoing investment
- Tools and licences – Monitoring software, remote management tools, ticketing systems, and security platforms all need to be purchased separately
- Knowledge risk – When a single IT person leaves, all of their institutional knowledge walks out the door with them
When these factors are accounted for, a managed service arrangement often compares favourably to in-house IT – particularly for businesses with 10–100 staff.
How to Evaluate MSP Proposals
When comparing MSP proposals, look beyond the headline monthly fee and assess:
- Scope clarity – Is the scope of what's included clearly defined, or is there room for the MSP to charge separately for things you assumed were covered?
- SLA commitments – What are the guaranteed response and resolution times for different types of incidents? What happens if SLAs are missed?
- Security inclusions – Does the proposal include endpoint protection, email security, and patch management, or are these additional costs?
- On-site support – Is on-site support included, or is it charged at a separate rate?
- Contract terms – What is the minimum contract term? What are the exit provisions?
- Strategic review cadence – Does the MSP commit to regular business reviews to assess your IT landscape and plan ahead?
CX Direct provides transparent, clearly scoped managed service proposals. We're happy to walk through any proposal in detail and help you compare it to other options. Contact our team to discuss your requirements.