What is a managed service provider (MSP), a managed IT service provider? In 2007, when I started here in Laredo, Ascending Technologies Inc., Global Technologies, and Core Business Solutions/Core Tech Solutions were the names known at the time. If you were to search on the internet for either of those terms and include your city, you will see results that you did not see a few years ago. As of the writing of this article, the results are: Ascending Technologies Inc., Select Secure Solutions LLC, Ghost Systems Inc, Lanics Technology Solutions, Laredo Techs, and CyberSpear.
Although the term is relatively new, the business of managed services isn't. Outsourced IT support, solutions, and services for businesses of one or many has been around since about 2005. As you may be aware, not all managed service providers are created equal. Some may be able to support any outsourced service(s) that your business may utilize currently or will need in the future at a monthly rate. This focus is usually on monitoring, maintenance, support, and security. A caveat when it comes to pricing is labor, projects and everything that is out of scope. These will likely be charged for at an hourly rate or fixed rate for the project. There may also be different plans for the services, and this will affect your monthly budget. Some managed services providers will also form partnerships which will give you access to products and/or services that would not likely be feasible nor affordable due to the initial buy-in cost. There are some enterprise solutions that small businesses need but could not afford but MSPs have made it possible. We will talk about the cost of security in another article so stay tuned for it.
While not all IT support companies are managed service providers, many are hoping to become a variation of a managed service provider. Why is this the case? What is in your best interest of your business?
Why It Matters for Your Business
Let’s consider why outsourced IT companies are striving to become an MSP. Many started out like most did back in the day, as a break/fix company. A break/fix company is really the worse decision if you will need ongoing tech support because your business goals and interests do not align. Why? Break/Fix companies make more money when things break. Aren’t you are experiencing a business interruption incident or downtime? To be completely honest with you, it takes just as much of your time as it does our time, and we know that time is money. Why does it take more time? When we go to a new business, we don’t know your environment, passwords, how things have been configured, where the cables go, who provides the internet, how the drives are connected, etc. It takes time to gather such information, and this results in more downtime and a higher bill.
Let’s consider an example. We dispatched a tech because we received a call from a healthcare prospect about not being able to login to an email and this email address was connected to a mobile device account. We certainly hoped that this work would lead into them seeing the need for our ongoing services after we took steps to provide a business associate agreement since they did not have one available for us to sign. Did you know that healthcare providers need to provide business associate agreement with any that may encounter patient information? Let’s get back to the issue. After troubleshooting with the device owner who also had a tech from another company working on cameras, time spent on the phone with the email hosting provider who had deactivated the email. More time was spent on the phone trying to pin down a representative to assist in reactivating the email. We must bill for the 3 hours of time spent trying to learn what is going on and who wants to pay for a bill when the issue was not resolved? Of course, the problem was not on us but on the service provider. At the time we were charging $75 per hour and there was 3 hours of time spent, $225 worth. We do not know what the tech that worked on the cameras charged, but you can see why break/fix does not align with your business goals. Can you imagine what you would spend paying hourly for issues that take time to learn your tech setup and troubleshoot? It is no wonder many call on somebody that knows somebody that works on computers. However, you understand what the employee costs are involved to care for payroll. Does it make sense to stick with break/fix as your main IT support solution?
A managed service provider not only provides outsourced IT support, but also manages services and cares for device, network, and service maintenance. In the case just mentioned, if we were providing the email through a hosting provider, we would either be the liaison to communicate with the company directly because of our relationships. Or we would have worked directly on the account to get the email address reactivated and recovered in a matter of 5-20 minutes. The issue would have been resolved. Unfortunately, at the time the tech left the issue was not resolved, the owner was not able to access the account the mobile device was attached to until they continued waiting on the phone for the next available representative to assist. Three hours had already been spent.
Why is this valuable to you? Many local small businesses were affected by the Rackspace ransomware incident. We followed the incident because a new local business that had just become a partner of ours and was using Rackspace. We wanted to be sure we were ready to act once the decision was made to move forward. Turns out that over the incident weekend it was evident that the email migration needed to start. By the same weekend, on Sunday, all the mail was migrated and on Monday, we communicated with the website hosting provider to get the DNS records adjusted and mail was flowing! We had priced our monthly services to include email migrations and thus we could be even more proactive and minimize downtime. Our partner knew of other local businesses that were down for weeks after his company had been migrated.
How To Choose Between a Managed Service Provider and A Direct Hire
What is the average cost to hire an employee for IT support? The average is $30-50K annually plus the necessary employee costs. You may be able to hire someone directly from the Laredo College that is just finishing their degree. You would hire them at a lower pay and allow them to gain necessary experience, but their pay will need to increase overtime if you want the tech to grow with you. Then you still need to factor in licensing, software, continued education, compliance, overtime, security, etc. and one person will not know everything. This tech will likely need time to acclimate to the needs of the business, the technology and hardware, etc. Who will cover when the tech needs training, vacation, and sick time? These are just some of the questions worth asking.
If you are a business owner, are you content doing the computer support work yourself or having another employee spend time scouring the internet for how-to guides? I met a doctor's assistant manager that started doing that and got to be good at the networking basics. Google-Fu is a superpower! This manager was the doctor's right-hand, helping with procedures and surgeries, so time was valuable. In the end, they decided that it was better for the manager to spend time overseeing and not doing the work. The benefit, now this manager knew the right questions to ask and could better manage the doctor's expectations when deciding which managed service provider would fill their needs. Are there aspects that you are already outsourcing, aspects of HR, payroll, accounting, bookkeeping, etc.?
There are benefits to outsourcing IT support service to an MSP because it will reduce the cost of hiring, training, products and services. We have a bird's eye view of different businesses. We are also surrounded by owners of other MSPs and collaborate about the trends, technology and security issues and learn from the masses so that our partners don't have to experience the same unfortunate issues. We have been able to determine the average hours to care for the average security and technologies that a small business uses. This is determined not by how many hours it will take to get them where they need to be, but by the hours once automation and processes are in place. This is in your best interests because our goal is minimal downtime and interruption to your business.
As an example, our company can care for a small office of 5-10 persons and computers from $1,350-$1,950 monthly for foundational services and support. This would include device maintenance, remote/onsite support, our security foundation with email security and SaaS backup and Azure/Google administration, and managed firewall with security services. This would be an employee burden rate of about $12 per hour, being paid about $9 per hour or $17K per year, but then remember you still need to purchase the necessary licensing, software, continuing education, security, etc. Some businesses need compliance assistance such as PCI DSS, HIPAA, C-TPAT, GDPR, GBLA, FTC Safeguards Rules, etc. and require a bit more time and expertise. As mentioned earlier, not all MSPs are created equal so it would be best to understand what the scope of work is. You will be able to make the most informed decision when you determine your budget based on operating and capital expenses and understand the full scope of services provided. Either way, it is best to budget for technology products, services, and support so that you are in a position to move forward.
Speaking of budgeting, did you know that Windows 10, the everlasting OS, operating system, will reach end-of-life October 2025? This means that Windows 11 will be the standard for the next 10 or more years. In the meantime, it would be good to know which computers do not meet the specifications for Windows 11 Pro and start budgeting now. Windows Server 2012 reached end-of-life this year in October. Keeping the operating system up to date allows you to keep receiving system and security updates. Did you know that many breaches happen due to unpatched systems?
Our goal is to operate as an extension of your business and function as your IT department. We understand the costs of doing business and try to understand your business and align our support according so that you can scale up or down according to your needs. When our partners are not burdened with downtime they grow and scale. That's the beauty of it, when you grow, we grow because our goals are aligned!
What Choice Will You Make?
If you are pondering between outsourcing IT support or hiring direct, continue to become informed and determine what your true business needs and goals are. Once you do, you will know without a doubt which is best for your business. The harder decision will be, who will make the cut? We wish you the best in your decision-making journey!
If you have questions, please feel free to contact us.
