Guide · Costs

IT service costs: what managed IT services really cost

If you search for the cost of IT services, you will find figures between 30 and 220 euros per workstation per month. That is a factor of more than six – and none of these figures is wrong. They just do not describe the same thing.

By Dipl.-Ing. Mohamed Khater, Founder and Managing Director, since 1992 · · 8 min read

Why the published figures are so far apart

No managing director can plan with a range of 30 to 220 euros. But the reason for the spread is not price gouging; it is a mix-up: quotes contain three different things under the same name.

We deliberately do not state a price of our own on this page. A price given without knowing your environment would be a guess, and guessed prices are either corrected afterwards or padded with a safety margin from the start. Neither helps you. What we do instead: explain what the price is made up of – so that you can assess any quote, including a competitor's.

  • The depth of service. Monitoring, patch management and remote support are something different from the same services plus firewall operation, verified backup, endpoint protection and emergency cover. Both are called "managed IT services".
  • The billing unit. Some bill per workstation, others per user, per device or per site. A business with twenty employees, twelve of whom share the same eight computers in shifts, pays very different amounts depending on the model – for identical service.
  • Pass-through items. Microsoft 365 licences, storage for backups and manufacturer maintenance are purchases, not services. Quotes at the top end usually include them; quotes at the bottom end never do. If you compare the two, you are comparing a flat fee with a flat fee plus a shopping basket.

That explains most of the spread. The rest comes down to six factors that determine the actual effort.

The real core

The six factors that determine the price

This is the order in which they make themselves felt in practice – the first point regularly accounts for more than all the others put together.

1. Complexity of the environment

Twelve workstations and one server are manageable. Twelve workstations, three virtualised servers, an ERP system with a database, two sites connected via VPN and a line-of-business application from 2014 whose vendor no longer exists: the same number of workstations, many times the effort.

  • Condition counts for more than numbers
  • Missing documentation costs money in the first year
  • Old line-of-business applications tie up time

2. Scope of the contract

Just the workstations – or also servers, network, firewall, backup, phone system and liaising with the vendors of your line-of-business applications? Each component can be booked individually, and each one changes the price.

  • Starting with one area is common
  • The scope usually grows over time
  • No obligation to take the full package

3. Guaranteed response time

Four hours during business hours is different from one hour, and both are different from availability at weekends. Short response times mean standby – and standby costs money whether it is used or not.

  • The question is not "how fast at most?"
  • But: what does an hour of downtime cost?
  • In practice, tiered by urgency

4. Share of on-site visits

Around four out of five faults can be resolved via remote support, faster than anyone could drive over. The rest cannot: faulty hardware, network problems, a server that no longer starts, new workstations.

  • Included is more predictable
  • Billed by time is cheaper if your technology is stable
  • Both are reasonable – you just need to know which you have

5. Size and economies of scale

Setting up monitoring, documenting, designing a backup concept, checking the firewall regularly: this effort arises largely regardless of whether ten or fifty people work in the business.

  • The price per workstation falls with size
  • Baseline effort cannot be divided up indefinitely
  • That is why small businesses pay more per seat

6. Compliance and security obligations

A tax firm, a medical practice or a supplier that falls indirectly under NIS2 through its customers needs more than a trades business with eight workstations: separate permissions, traceable access, documented restore tests.

  • Ongoing effort, not a one-off
  • Affects law and tax firms, medical practices, suppliers
  • Often not shown separately in quotes

Three models

How IT services are billed

Alongside the question of how much something costs is the question of what it is billed by. Three models are common among SMEs, and they can be combined. Which one is cheaper does not depend on the provider but on how often something comes up in your business.

ModelHow it is billedWhen it fits
Flat feeA fixed monthly amount for a defined scope – usually per workstation or user, with servers as a rule charged separately.When predictability matters more than the last euro. Here the provider has its own interest in as little as possible breaking. Caution: check carefully what is explicitly not included.
Block of hoursA package of hours bought in advance, drawn down as needed and deducted.For moderate, fluctuating demand and when someone is on site anyway. Caution: clarify whether unused hours expire and whether travel time for on-site visits counts.
Time and materialsEach service is billed individually by time, often with surcharges outside business hours.For getting started, for projects and for businesses where little comes up. Caution: without a contract there is no guaranteed response time and no priority when things get busy.
Prevention – monitoring, updates, verified backups – is as a rule only included in the first model. With the other two, you pay for fixing, not for preventing.

What is usually not included in the flat fee

Four items you should ask about explicitly in every quote – they account for a large part of the price difference between two seemingly identical quotes.

  • Licences for Microsoft 365, operating systems, antivirus and line-of-business applications
  • Storage for backups, especially when backing up to a second location
  • Manufacturer maintenance for firewall, servers and phone system – without it, there is no replacement when something fails and no security updates
  • Projects that go beyond day-to-day operations: server replacements, office moves, migrations, new sites

Tool

Comparison sheet: twelve questions to ask about any quote

Go through the list once for each quote you have. The answers tell you more about a quote than the final total. Fill it in on screen or print it out.

Your entries stay in this browser window. Nothing is stored, nothing is transmitted and no third-party server is contacted.

1 Is billing per workstation, per user or per device?

<p>With shift work or shared computers, this decides the total price.</p>

Is billing per workstation, per user or per device?

2 Are servers charged separately – and how?

<p>Server effort does not depend on the number of employees. Almost all providers bill it separately.</p>

Are servers charged separately – and how?

3 Are licences included or extra?

<p>The most common reason two quotes seem impossible to compare.</p>

Are licences included or extra?

4 Is storage for backups included?

<p>Especially for the second copy at another location.</p>

Is storage for backups included?

5 Are on-site visits included or billed by the hour?

<p>Either is reasonable. What is not reasonable is finding out only from the first invoice.</p>

Are on-site visits included or billed by the hour?

6 What response time is guaranteed – and when does it start?

<p>From when you report it, from when it is acknowledged, or from the start of business hours? These are very different commitments.</p>

What response time is guaranteed – and when does it start?

7 Does the response time also apply outside business hours?

<p>If not: what happens if a server fails on a Friday evening?</p>

Does the response time also apply outside business hours?

8 Who is liable if a backup does not work when it is needed?

<p>The most uncomfortable question – and the one where quotes differ most clearly.</p>

Who is liable if a backup does not work when it is needed?

9 Is restoring tested regularly, and do I get proof?

<p>A backup that has never been restored is an assumption, not a backup.</p>

Is restoring tested regularly, and do I get proof?

10 What does a project that goes beyond day-to-day operations cost?

<p>Hourly rate, fixed project price or at the provider's discretion?</p>

What does a project that goes beyond day-to-day operations cost?

11 How long am I tied to the contract, and what is the notice period?

<p>Long minimum terms tell you how a provider intends to keep its clients.</p>

How long am I tied to the contract, and what is the notice period?

12 What happens to documentation, login credentials and licences if I terminate?

<p>The most important question on the list. Passwords, licences and documentation belong to you, not to your service provider. If the answer here is evasive, that tells you everything.</p>

What happens to documentation, login credentials and licences if I terminate?

No question rated yet.

The comparison that matters

The honest comparison is not "managed services versus nothing". It is: managed services versus the alternative – and that has a price too.

An in-house IT position costs the gross salary plus roughly a fifth on top for the employer's social security contributions, as well as a workplace, training, tools and licences for monitoring and remote support. Then there is what no salary table shows: holidays, sickness, resignation – and the knowledge that leaves with the person. And one person cannot master firewall, database, phone system and Microsoft 365 all at once.

From around fifty to sixty workstations, an in-house position pays off in many cases. Below that, rarely. We say so even when it counts against us – the detailed comparison of in-house IT staff, freelancers and an IT service provider is on our home page.

Frequently asked questions

What we are often asked about this

Why is there no price on this page?

Because without knowing your environment it would be a guess. We do not send a quote until we know what we are talking about. The assessment is free and without obligation; afterwards you receive a fixed monthly price with a clearly defined scope of services.

Is a cheaper quote automatically worse?

No. It is usually a different one. Use the comparison sheet above to check what is missing from it. If nothing is missing and the price is still lower, take it.

What does IT support cost without an ongoing contract?

It is billed by time, at an hourly rate you are told before work starts. Factor in the time needed to get to know an unfamiliar environment: without documentation, every incident means working out afresh what is already known for a client under contract.

How IT support works with and without a contract is explained in detail on our IT support page.

Can we start with a small scope?

Yes. Many clients start with backup monitoring or server management. Experience shows that the scope grows over time – but that is your decision, not ours.

What does the assessment cost?

Nothing. We record hardware, software, licences, network, backups and security status and give you an honest assessment – even if much of it is already working well and you then decide against us.

Why do other providers state a figure and you do not?

A published figure is an advertising claim that a provider is bound by. Anyone who writes "from €35" has to offer that to a business for which that scope is not enough, too – or explain at the first meeting why the stated price does not apply this time. We think the second route is more awkward than the honest answer that it depends on the environment.

Dipl.-Ing. Mohamed Khater

Dipl.-Ing. Mohamed Khater founded INFONET Computer GmbH in Cologne in 1992 and still runs it as its owner. He continues to work on the technology himself rather than just managing it – the assessments in this article come from 34 years of quotes, takeovers of existing IT environments and assessments at small and medium-sized businesses in the Rhineland.

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