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5 ways to avoid paying your MSP twice over for software

Are you paying your MSP twice over? Here are five ways you might be.

1. Paying for 24x7 support if you work 8x5

If the MSP charges you the same rate regardless of the hours they provide support, you're fine. But many MSPs charge extra for 24x7 support. And the fact is, in reality the number of times you call on them outside of 9am-5pm is really quite low. Yes, there's a feeling of security because your MSP is "always there, just in case", but think about how critical most support calls really are to your business. There may well be some cases where you absolutely 100% must have a particular user online at exactly 9am next day, but chances are in many cases you could save a lot of money just waiting for an hour.

We saw one client in particular with a couple of hundred professional fee-earners who worked country-wide, and about 40 support staff who worked 9am-5pm in their head office. Their previous MSP was charging for 24x7 for all users, and we were able to save them a lot of money by moving the office-based staff to 8am-6pm.

2. Signing up to block hours contracts

You're paying an MSP up front for blocks of hours? Well, those hours get called off when you have a problem and contact the MSP to step in and fix things. Do you think that gives the MSP an incentive to provide a root-cause fix and stop the same problem happening again? Block hours contracts aren't really for managed services, they indicate a break-fix mentality. That's not an effective way of improving the quality of your IT services over time, and it can end up being very expensive for you in the long run.

3. Treating desktops like laptops

Beware of standard software loads on desktops and laptops. Laptops leave the local area network from time to time, so they need additional layers of protection like DNS filtering software. But most MSPs love uniformity, which makes their lives easier, so they install the same DNS filtering agent on all computers, not just the laptops. It may only be an extra 5% you're paying, but everything adds up in this category - time to make sure that only required software is installed on each device.

4. Paying for phantom devices

Say you have 22 computers, plus the usual array of network equipment, printers, etc. Your MSP charges in discounted blocks for the number of computers, something like $X for between 20 and 29 devices. This means you're paying 100% pure profit to the MSP for managing seven computers you don't even have, plus all the additional loaded costs for networks, printers and staff, too. MSPs have a number of typical pricing models - per user, per device, per location or combinations thereof - but block charging is certainly one to avoid.

Alternatively, you can sometimes find you have ghost accounts or devices. Let's say that a member of your team leaves. Their computer isn't recycled straight away, and you don't inform the MSP that their Microsoft licenses are no longer required. You'll likely get charged every month after for both the per device fee and the Microsoft licenses, plus for backing up their old mailbox on Exchange. We run reports of devices and accounts that haven't been used for an agreed number of days, usually, 30 days, and then automatically take them out of the billing cycle. And if, like us, your MSP converted the old mailbox to a shared account you'd stop paying for that backup, too.

5. The "contingent work" accumulator

MSP prices are based on averaged-out costs and margins. Here's an example; not everybody needs technical support every month, but you get charged an average amount per account that's sufficient to cover the users who do need to contact the service desk. That's perfectly fine. But we've seen a few MSPs who, in addition to their standard per-device fees, charge for extras like "$20 for mailbox support and administration" or "$10 for user and license administration". Now many clients might not know this, but not every mailbox user and license needs to be maintained every month. Your MSP will only need to touch a user account if there's a problem with it, or if there are any new hires or leavers they have to process. In the case of a problem, that's what you're already paying for in your per-device costs. And let's say that in a 30-man operation, you hire four new staff in a year. On the prices shown, you'd pay $900 in that year for four activities that take less than a few minutes each. That's getting on for more than $2,000 per hour for IT support!

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Did you know some MSPs charge high margins for a dated set of IT systems and processes? Get in touch today and we'll show you how a fresh approach can save you money.

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