How Managed IT Services Can Reduce Your IT Costs


As businesses aim for growth and expansion, the idea of trimming their IT budget and minimizing technology expenses often appears attractive. However, this strategy carries significant risks. Cutting corners on essential IT investments can compromise the security of the business, which may have far-reaching implications on its financial stability. It’s crucial to recognize that managed IT services are known to streamline operations while also cutting costs, illustrating that strategic IT investments can enhance both security and financial efficiency. This highlights the critical importance of balancing cost-saving initiatives and sustaining a robust IT infrastructure. By doing so, companies can ensure long-term growth without sacrificing the integrity and efficiency of their IT systems.

Managed service providers offer more advantages than just cost reductions. They can also help boost productivity and effectiveness. Moreover, organizations can save expenses by avoiding cybersecurity or data recovery issues. This is where managed IT service providers come in to save costs without forgoing crucial IT maintenance.

This blog will examine the main cost-saving benefits of outsourcing IT processes and serve as a guide to managed IT services. We’ll also discuss pricing for these IT services, so let’s get right into it. But first, let’s briefly revise what Managed IT services entail. 

What Are Managed IT Services?

Managed IT services is the process of outsourcing the IT operations of a company to a third-party, known as a Managed Service Provider (MSP). These skilled vendors are in charge of managing the entire IT infrastructure. They provide various services, including network and system security, data backups, round-the-clock monitoring, design and updates, analytics, reporting, and more.

Pricing for Managed IT Services

Multiple variables like ‘user count’ affect the total cost of managed IT services. In addition to provider fees, there can be other expenses associated with activities required to maintain the IT system and the company’s internal activities.

Factors Influencing the Cost of Managed IT Services

The cost of Managed IT services can vary significantly based on several factors. These factors can impact the pricing structure and overall expenses of outsourcing IT management to a service provider. Here are some key factors that influence the cost of Managed IT services:

  1. Package inclusions: Managed IT service providers’ packages can vary from one to another. These packages range from the basic ones for small non-technical companies to all-inclusive high-cost packages for highly technical companies.
  2. Number of servers: Costs increase with service hours and support resources needed to maintain a complicated network infrastructure with specialized or backup servers.
  3. Total laptops and computers: Many service providers charge extra for this but don’t usually consider the number of users while estimating the costs.
  4. Business locations: Expenditures will increase if you provide service at several sites.
  5. Security level: If the company requires enhanced protection, costs will normally be greater since more steps are required to safeguard sensitive data.
  6. Costs of compliance: There may be strict paperwork requirements for data about health, finances, and the environment. Costs may increase if these unique restrictions are followed.

A competent managed IT provider will first inform about the base cost for its service package and then assess the costs for any additional requirements. As a customer, ensure that the charges for these extra users or servers are included in the proposal if you expect to grow your firm.

To better understand AlphaBOLD’s offering, please get in touch with our consultants for a general idea of cost estimation and how the pricing works./

The Benefits of Managed IT Services

If you’re still managing compliance, product/service complexity, and supply chain contacts using paper-driven procedures or old-fashioned technologies, this is where you start your digital journey and automate the business operations for improved performance and market requirements. The most recent figures on digital transformation show that over 70% of businesses either have a digitalization strategy or are actively developing one. According to 56% of CEOs, their digital advancements have boosted annual revenues.

The increasing trend in cloud adoption is evident in the business world. A significant number of companies have transitioned their operations to the cloud, reflecting the growing preference for cloud services among enterprises. This shift is largely attributed to the desire for enhanced performance and efficiency in business processes. Cloud technology stands out for its ability to meet scalability demands and effectively manage workloads. Additionally, it empowers cross-functional teams to assess their resource needs and identify areas for functional improvements, thereby boosting overall productivity.

Over the decade, multiple billion-dollar companies have saved up on their costs by outsourcing their IT processes to managed service providers. Let’s talk about these companies and how they’ve increased the quality of their services, keeping the costs minimal.  

  • Netflix reached new heights of cost saving through cloud computing. It first cut operational costs by paying for the resources it actively utilized, no longer having to maintain and upgrade its data centers and servers.
  • Unilever management claimed their solid dedication to the cloud resulted in considerable cost savings. The move sped up product releases, sustainability efforts, customer service, and operational effectiveness.

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Cost-Saving Benefits of Managed IT Services

1. Affordable monthly fee

The team of managed service providers draws on a broad spectrum of experiences in various IT settings. For a small subscription price, companies can get instant accessibility to this knowledge.

Consulting the professionals hired by the managed service provider saves much money compared to paying specialists in various IT fields. A managed service provider will lend you the skills that’ll help expand your knowledge base while decreasing salary expenditures.

2. Downtime cost

Organizations worldwide are trying to enhance their cybersecurity, with seven out of ten indicating that their endpoint risk to security has grown considerably in the past year. With file-less assaults on the increase and average downtime costs of $300000, cyber threats are becoming more complex.

Endpoint security nowadays is undoubtedly challenging and expensive to handle. Additionally, downtime brought on by such assaults can directly affect sales, possibly endangering a company’s survival.

3. Costly data breaches

Cybersecurity defenses can be stepped up by investing in a reputable managed services provider.

As per IBM research on data breach costs, a single data breach may cost an organization an estimated $3.92 million. It’s a startling figure, but it’s a reality that many organizations worldwide have experienced due to ignoring cybersecurity.

Based on Hiscox’s 2019 Cyber Readiness Report, only 11% of firms can claim to be cybersecurity experts, and the remaining 89% continue to make improvements before their systems are completely safe.

4. Eliminate unnecessary operational costs

According to studies, managed IT services may boost IT efficiency by 50–60% while reducing internal IT expenditures by as much as 40%. These numbers suggest significant cost reductions for capital and operating expenses, increased effectiveness, and higher end-user satisfaction.

No doubt, managed services are crucial for businesses, regardless of whether they are viewed as a financial leap or an extension plan.

5. Save on new technology

By partnering with a managed service provider, your company will have access to the most recent technological advancements without making an “uncertain” investment in them. This saves you from spending money on new computer gear and software on the odd chance that it would benefit your business. Contracting with a managed services provider will provide your business with an affordable connection to recent technology advancements.

To further explore managed IT services, explore AlphaBOLD’s blog “A Guide to the Different Types of Managed IT Services.

Final Thoughts

A managed services provider is the right option for companies that want to be more cost-effective but don’t want to compromise on security or productivity. However, hiring a reliable provider is essential to help you expand over time and match the budgeting cost of managed IT services.

Our team here at AlphaBOLD provides exceptional managed IT services to companies in need. We provide packages as per your requirements and keep customer satisfaction our top priority. Get in touch with our experts today and learn about what we offer!

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