In today’s digital landscape, businesses rely on technology to keep their business operations running smoothly. If you’re looking to outsource the management of your IT environment, you have two approaches to choose from: managed IT services or break-fix. Adore IT began as a break-fix computer repair and consulting business in 1999 called Adore Computers, and 20 years later was rebranded as Adore IT to coincide with our (somewhat late) transition to the managed services model — I can be truly honest when I say that both methods have their advantages and disadvantages, and we know them intimately.
We specialise in managed services but our goal is to ensure you are informed on all of the approaches you could take to solve the unique challenges of your business, even if the right answer isn’t the service we sell. So, let’s talk about how managed services and break-fix compare in these areas:
- pricing models
- pros and cons
What is managed services?
Managed services is a proactive approach to IT services where a third party (a managed service provider or MSP) manages and maintains the IT systems, infrastructure, and devices on behalf of another business. The managed IT service provider assumes responsibility for the overall health of the client’s IT environment, and works together with the client to modernise the way they operate with information technology and help achieve their business goals through a defined set of services. Managed services allow business owners, managers, and employees to focus on their core responsibilities and business growth while relying on the expertise of the technology partner to take care of the IT systems.
There is another model that falls under the banner of managed services but operates a little bit differently, so I’ll provide a short overview of that approach as well.
What is co-managed services?
Co-managed services are essentially the same as regular managed services, but with one key difference: there is at least one person on the client’s team who is a designated “IT person” who shares the load and responsibility of the IT environment, hence the name co-managed. This approach works well as it extends the skillset of the internal IT resources and reduces their overall workload. If you have any in-house IT team members that are overworked or need specialist help to solve complex issues or projects that they may not be accustomed to, co-managed services are a great way to bolster your team with the assistance they need to succeed.
What is break-fix?
Break-fix is an approach to IT services where an IT service company provides support services to a customer only when a problem arises — something “breaks”, they “fix” it. This approach is reactive, meaning that the service provider only fixes the problem after it has occurred instead of proactively avoiding future issues. Break-fix is often used for older, legacy IT infrastructure where maintenance and support is required on-demand as they don’t require the same level of proactive management as modern technology.
Break-fix is a traditional approach that many IT companies started with, however, industry leaders and many others have transitioned away from break-fix and now operate as managed IT service providers for reasons we will discuss shortly.
What’s included in managed IT services?
Managed services describes a broad range of services that a managed service provider might deliver. Managed services plans will likely include features such as:
- remote monitoring and ongoing maintenance
- network monitoring
- guaranteed response times (service level agreement)
- cloud services, cloud solutions, and cloud computing
- service desk and helpdesk support
- remote support and on site support
- communication with any third party vendor
- cybersecurity protection
- backup management and testing
- business continuity and disaster recovery planning
- cloud migration and data migration
- project management
- IT strategy consulting services
- and more…
Managed service providers have traditionally had a focus on remote monitoring and maintenance for computers and servers, and this worked well when hardware was more likely to break. In the modern era, computers rarely break and businesses are ditching their servers and other on-premises infrastructure for the power of the “cloud” and the “work from anywhere” framework. The problems facing the modern business today are quite different from those even just a few years ago, so a modern managed service provider wanting to evolve and offer industry-leading solutions should deliver value to their clients in the following areas:
- user productivity and training
- technology adoption
- cybersecurity framework alignment (e.g. NIST or CIS)
- compliance planning and risk management
- information security and data governance
What’s included in break-fix?
Break-fix is often less comprehensive than managed IT services, and will typically include the following on-demand services:
- diagnosing and repairing hardware issues
- troubleshooting software problems
- installing software updates, patches, and security software
- replacing failed components with new parts
- data backup and recovery
- cloud services support
- data migration
- IT strategy consulting services
As you can see, some of the services included in managed services are also available on break-fix arrangements. However, any new technology or IT solution implemented under a break-fix arrangement will likely be less effective than their managed services counterparts due to the reactive nature of the work and a lack of ongoing management.
What are the pricing models for managed IT services?
Managed services are typically charged for in one of the following ways:
Per-device: A fee is charged for each device that is managed, which may include desktops, laptops, servers, mobile phones, and even network infrastructure like firewalls and switches. This is the traditional method, and it’s especially popular when managing complex IT infrastructure with many different types of devices. There are quite a few complexities though, namely different devices will often have different prices and some devices, like virtualised servers, can confuse clients wondering whether or not they should count as devices.
Per-user: A fee is charged for each user that is supported, which may include employees, contractors, and other users. This is quickly becoming the standard and is our preferred approach — it’s easy to quantify, it’s easy for the client to understand, it scales well as a business grows or reduces in size, and it’s also just nice to design and price offerings around supporting people, not devices. Some complexities present themselves when considering part-time users or mobile-only users, but these issues are easier to solve than those presented by the per-device pricing method.
Hybrid: A fee is charged for a combination of users and devices that are supported, and may even include things like locations or cloud tenants (e.g., Microsoft 365). This approach can work well when there are clear expectations set and a client understands exactly what parts of their business are being taken into account when it comes to pricing, especially when the provider delivers services that are unique to each business they work with. However, this method can become extremely complex to manage and understand, often leading to miscommunication and confusion between the managed service provider and the client.
What are the pricing models for break-fix?
Break-fix support is typically charged for in one of the following ways:
Time and materials: A fee is charged based on the cost of materials and the time spent on a particular project or task. This method is the simplest as the client only pays for services as they need them with no ongoing commitment.
Block hours: A fee is charged for a pre-purchased set of hours for IT services that will be drawn from as work is completed. Purchasing a larger amount of block hours will often come at a discounted rate, reducing the overall price of the IT services provided.
Pros and cons of managed IT services
Managed IT services are a popular choice for many businesses that are looking to streamline their operations. While managed services offer a full range of services that deliver many benefits, some disadvantages may mean this approach isn’t the right approach for your needs.
Pros of managed IT services
Fundamental alignment of goals: Managed service providers and clients share the common objective of preventing problems from happening, and aligning on mutual objectives is an integral part of establishing a successful ongoing client-partner relationship.
Peace of mind: It’s no longer your responsibility to keep with industry changes, new solutions, or keep your business safe when using technology. You can rest easy knowing that your IT is being completely taken care of.
Predictable costs: Flat-rate monthly fees give clients a clear understanding of their IT budget.
Cost savings: Managed services are a cost effective way for a company to get many of the same dedicated capabilities as an in-house IT support team.
Expert knowledge: Managed IT service providers offer a dedicated team of highly skilled IT professionals with expertise and knowledge that may be unavailable in-house.
Better service: an appropriately staffed managed services provider will have ample time to dedicate towards learning and education, resulting in greater efficiency and overall better service for clients and end users.
Enhanced security: Managed service providers, especially those with a focus on cybersecurity, will reduce the chances of cyber threats occurring as well as the potential impact, and implement IT solutions to better protect private and confidential customer data.
Better stability: Providing managed services often involves regular maintenance and monitoring of your IT infrastructure which makes all the difference in keeping your systems running smoothly.
Streamlined billing: No more dealing with lots of intricate, one-off invoices — now it’s just a straightforward fixed fee invoice issued at the start of every month.
Cons of managed IT services
Loss of control: Outsourcing IT responsibilities to a third-party provider can result in a feeling of loss of control over your IT management.
Dependence: Your business may become dependent on the managed IT service provider, making it difficult to switch to a different service provider or bring IT functions internally.
Increased costs: While managed IT services can reduce expenses associated with in house teams, they can also result in increased expenses in some cases, especially if your company requires a high level of technical support.
Lock-in contracts: Many managed service providers require clients to sign a contract or agreement which can be too much of a commitment for some business owners, especially when some contracts lock you in for months or even years at a time.
Pros and cons of break-fix
Break-fix IT services have long been a go-to option for companies, especially those with legacy technology, but there is a reason for the mass industry transition towards managed services. While there are advantages in some cases, break-fix has some fundamental flaws that often outweigh the benefits.
Pros of break-fix
Flexibility: Break-fix IT allows companies to only pay for the specific service they need when they need it, without having to commit to a long-term contract or retain an internal IT team.
Simplicity: Break-fix IT is a simple, on-demand approach to IT support that does not require a lot of planning or coordination.
Cons of break-fix
Misaligned goals: Customers don’t want technical issues to occur, but with break-fix, an IT support company will only get paid when there are problems to fix. This creates an unhealthy dynamic where the provider relies on the customer having problems.
Unpredictable costs: It’s practically impossible to budget for your IT expenses accurately when work is done reactively and on a case-by-case basis.
Increased costs: Fixing IT issues one at a time can add up and be more expensive than managed IT services, and more problems are likely to occur due to the lack of proactivity.
Lack of accountability: Break-fix IT providers are only responsible for fixing the immediate problem, not ensuring the overall health and stability of your information technology. Ultimately, the customer is responsible for their IT environment.
Lack of expertise: Break-fix IT providers spend a lot of time solving immediate issues and may not have the same time to dedicate towards education and learning. This can result in a lack of knowledge, an inability to keep up with industry trends, and an overall lower level of service and security.
Increased downtime: With the reactive nature of break-fix IT, businesses may experience extended downtime while waiting for issues to be resolved since there is no proactive maintenance or monitoring in place.
Limited vision: The billing structure of hourly work encourages both customers and service providers to prioritise quick, temporary fixes rather than more comprehensive and lasting IT solutions. This leads to a cycle of repeated, short-term fixes instead of a permanent solution.
So, what’s right for your business?
The simple answer is: it depends! Ultimately, only you know your priorities and what’s right for your business. All we can do is discuss the different aspects of managed services and break-fix while you determine which approach is best for you.
Break-fix works well for businesses that have a low dependence on information technology, tighter budgets, and a willingness to accept higher levels of risk and increased downtime to just deal with IT issues as they arise at a lower cost.
Managed IT services works well for businesses with a higher dependence on information technology and those willing to make a financial investment in their IT to prioritise stability, security, and efficiency to minimise downtime and ensure business continuity.
At Adore IT, we offer managed IT services to any small and medium sized business in Melbourne and the surrounding areas. If you’re considering outsourcing your IT to a managed services provider, we’re here to help and answer any questions you may have.