Goodbye to our MSP

Posted by bottleofmtdew@reddit | sysadmin | View on Reddit | 440 comments

We will be leaving our MSP soon. They were great service wise, but the price point (600k/yr) has become too high for us to afford/justify continuing with their service. We currently manage a little over 250 endpoints with slightly under 200 users. Anyone else recently move away from their MSP? If so, did you move to a new one or bring things in house? I am curious on the in house management, but we do not have the IT department size (2 people) to handle everything they were. Looking for insight currently.

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440 Comments

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Icy_Firefighter3694@reddit

We have a software that is made for people bringing IT in house but don't have enough staff. Feel free to dm me :)

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dbh2@reddit

600,000/200 staff/12 months = 250/seat Standard market rate at least in my area starts at about 140 to 180 for everyone i know in the market. So they might be a little high but it’s not like they are charging three times market rate. I haven’t read all the service they are providing so it may actually very well be fair priced. Or it might be overpriced some.

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soggybiscuit93@reddit

OP mentioned elsewhere that it also includes MS licensing, which could easily be $75K/yr at their size

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dbh2@reddit

If all these people are freaking out at 525,000 a year for an MSP to take care of everything including antivirus, monitoring, backup maintenance and so on and most things MSP’s do for 200 staff, then they obviously are not in the know about how that works. $230/seat isn’t unreasonable.

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Defconx19@reddit

I find it depends, if they had in house IT when we do supplemental, our costs to provide service to the customer go down dramatically. We usually give large discounts for any customer than handles L1/L2 internal. Most supplemental work tends to convert into billable projects and the support they do need is limited, so really just comes down to managing the EDR/Backups which is minimal effort.

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CheezeWheely@reddit

Every 'did it in house cheaper' client we've taken on comprised of.  1. an exiting single. IT team comprised of a 'sys admin' who claimed they could do it all themselves 2. a bunch of tools with every bell and whistle in the contract, 90% of it was misconfigured or never configured and over licensed with 20%+ to many seats. 3. lost contracts, agreements and documentation of the vendors they're working with leading to paying for things they didn't need 4. zero, and i do mean zero useful documentation 5. passwords that hadn't been rotated or secured properly 6. absurd back doors into everything, jump boxes, etc. 7. a bunch of users who "miss todd, he was so friendly!"  Half of these companies were on the brink of extinction with backups that were not being checked, huge risk, etc.. at any moment they could have imploded. They had no clue though.

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radcoreathome@reddit

I used to be in a job when i was a internal engineer at a large telco looking after about 200 sales engineers and account managers. I never met them personally, but when i did, they go, oh your todd...and go right ti their colleague standing next to them and say.. this guy is GOOD. ah good old daysm

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HotTakes4HotCakes@reddit

I mean...yeah? Presumably the "do it in house" people who actually make it work wouldn't be contacting you in the first place.

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CheezeWheely@reddit

It's not them that contacts us, its the COO/new CTO/CIO or CFO after the individual leaves or is terminated. In a scenario where they've left by choice or not and we've come in, its generally what I described above. There is also a ton of dunning kruger types in IT. More than any other industry i've worked in.

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Wendals87@reddit

Yeah I know right. I think a lot of people are thinking that they earn 100k a year and can manage 200 devices, so 600k is overkill A person's 100k salary is actully quite a bit more to the company

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TechJunkie_NoMoney@reddit

That, and an MSP isn’t just managing your companies devices. They most likely have 50 other clients who are very similar to yours. I don’t think these people really understand how MSPs work.

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lazy-parasaurolophus@reddit

Most likely it includes other licensing like firewalls too.

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fieroloki@reddit

600k a year for that small of a footprint? Y'all got robbed.

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CasualEveryday@reddit

When I see a number that high I think one of two things happened. 1. Customer negotiated some ridiculous SLA and liability guarantee 2. They have been purchasing all of their licensing, housing, and hardware through them and aren't aware that they'll still need to buy those things afterwards.

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Randalldeflagg@reddit

This. When I worked for a MSP, My time was billed at $150/hr. I didn't see much of any of that. Some of the network engineers with certs in Collab, Core, Service, and Security would be bill out at around $225/hr. and those costs can ramp up in a hurry depending on the project/emergency. That said, I can't think of a single client we were billing at $600k a month, even those with white glove treatment

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samon33@reddit

OP stated $600k/YEAR = $50k/month. For 250 endpoints, that's $200/endpoint/month. If user-based, 200 users is $250/user/month Assuming that includes licences, doesn't sound outrageous?

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Randalldeflagg@reddit

Not too outrageous depending on the level of service being provided. We would quote the trouble clients we didn't want crazy high prices. Some got the hint, others not so much

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samon33@reddit

From OP: "They handled our AD DCs Network equipment (Cisco) backups (onsight synology & cloud VEEAM) Microsoft licensing email security/filtering (barracuda & Knowbe4) Antivirus (Trend) connectwise services" Licencing would be a huge chunk of that $200/endpoint.

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Defconx19@reddit

that's like at cost to the MSP $40 at best of licensing the only variable is how much data is in the cloud stroage for veeam/Synology and what provider they are using for the storage. Barracuda is under $3/user, TrendMicro...? Why at $200/user should be a way better offering, Connectwise is like $3-5 a device?

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hoh-boy@reddit

Is that $200 an endpoint a month or a year?

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samon33@reddit

Month.

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the123king-reddit@reddit

ouch

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fatcakesabz@reddit

I’m internal and currently we charge back $152/user/month and that’s seriously low, hasn’t changed in 4 years, laptops are nearly double what they were then, more security based stuff and dedicated CISO push the IT overhead up. I’d be happy with $250 but depends on whats included in the agreement I suppose, lifetime of devices, software stack, hardware warranty, comms lines and so many other things, if it’s $200/month just for support then that’s mental.

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dbh2@reddit

What is your job experience that qualifies you to make that statement about the price?

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the123king-reddit@reddit

I have none, as i've never looked at msp costs before. $200 a month per endpoint is still a lot IMHO.

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dbh2@reddit

Yeah. Your opinion isn’t grounded in any factual basis or exposure to it. I would like invite you to do some reading in /r/msp so you can learn some. Even the car dealerships labor rates are over 200/hour now. Everything is expensive.

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ns8013@reddit

They clearly have none, because it isn't even in the realm of being outrageous based on the info provided.

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oldspiceland@reddit

It’s 450k per year in licensing and nothing listed by OP that would explain a need like that.

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C1SC0BTC@reddit

Similar size company, our msp handles all the same stuff as the op msp. We're currently charged $6500 per month. And we think that's a bit pricey :)

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stueh@reddit

We did that for a client, responded to their managed service market tender request (they were end of contract) with a figure like ten times what it was before and insanely above market rates/insane profit margin, and with *reduced* services in the contract to boot. They took it. Turned out, they have such a reputation no one else put in a tender response despite them ringing around to encourage people.

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Adamantium949@reddit

Exactly, that price point is entirely in line with what we charge. We go anywhere from $185 to $335/user. Lotta software and security is included in that. Depends on the industry, how much compliance and regulation the client needs, also server backup costs, off-site storage, cloud hosting, lotta factors. We throw it in one giant spreadsheet that spits out a number.

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CasualEveryday@reddit

200/user if it includes M365, managed network, full backup solutions, some kind of cloud hosting, managed wireless/MDM, AYCE helpdesk, and even basic remote access is hardly outrageous. E5 is like $48 partner cost by itself. It would depend on the business, though. Not everyone needs that level of licensing and support in most orgs. I'm betting that they negotiated some kind of special SLA, wanted a dedicated person, wanted office hours or were purchasing access to the MSP's tools for internal people, etc. Or, OP is just looking at the total they paid over a year and not exclusive hardware costs that definitely aren't going away with the MSP.

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Beautiful-Fox8646@reddit

100%

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thequeefcannon@reddit

Spot on.

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vc3ozNzmL7upbSVZ@reddit

Right, is this a VAR that also does MSP stuff?

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PowerShellGenius@reddit

$250/user/month, if the MSP is a reseller handling all their licensing, might be realistic. Top level M365 licensing, plus Adobe (with a "just give everyone everything so we don't have to deal with it" approach), and licensing all users to log into an overpriced ERP could easily eat over half of that. Add in support on network stuff including signature updates for NGFWs, software assurance on all server and CAL stuff, depending on vendors maybe some extra bullshit tax for MFA that should be a baseline in this day and age (FortiToken licensing, etc). I could see how it's realistic depending on the business.

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Downtown_Diamond1932@reddit

Agreed on this. $250/seat per month is reasonable if M365 Business plus and other things are included, like HIPAA/GDPR/etc. I even offer a way for employee to digitally sign/acknowledge forms for acceptable use & internet policies and whatever other forms they need that follow federal & state guidelines. That way, if an employee says they never signed something, someone can look up the exact date & time they did so. I offer other things, and support during business hours I include in the $250user.

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painted-biird@reddit

Yup- 100% this. Folks don’t realize that a GOOD MSP can also function as the client’s de facto CTO. In addition to everything you listed, it’s not as simple as just hiring someone off the street. If you don’t have experience with enterprise engineering, how do you expect to hire competent engineers? That size organization is tricky, because it ALMOST requires internal IT, but not necessarily- I’d say you need AT LEAST three, if not four engineers. Depending on location, those salaries alone can easily eat up half of that. Every business’s needs are unique.

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TechJunkie_NoMoney@reddit

I’m actually shocked at how many people on this sub don’t understand the math. They probably also don’t know how much their company is charging for these services. It’s like they think it’s a 1:1 ratio of employee pay:customer billing, and every dollar after is “my boss just loading his pockets”. No wonder there’s so many posts about people’s businesses not making enough money. Your business can’t thrive if you’re constantly undercutting your competition. Eventually you’ll undercut yourself out of business.

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radcoreathome@reddit

Most companies after expenses (im a telco engineer with project management and accounting diploma) expect 5% to distribute to equity holders. MSP are a mostly dud business as the competition is fierce as it is largely labour and professional services, the MSP own little to no assets, their book value is their client base. The risk and liabilities quite high as IT impacting a business is a common occurance and it is not unusual for a MSP to be up to its neck in legal coats less liquidated damages. I hate this business personally and would not go into it, mainly because IT is a pretty cheap commodity and expense viewed by clients, in the past it used to be worth something eg. 20yrs ago. Only worse business is construction

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Wolfram_And_Hart@reddit

We bill ourselves as a VCTO. Our boss sits in on lots of C level meetings at multiple businesses.

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Iggyhopper@reddit

This is the way to provide the best value, because that's exactly what it is and that's what the other C suites are looking for.

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Wolfram_And_Hart@reddit

I’ve never considered working at an MSP before but my boss really is a good man and it’s reflected in the clients respect for him.

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apothecar@reddit

What in the fuck? Who decided to pay someone 600k? I did that BY MYSELF for over 300 clients. That's bonkers ass crazy my friend.

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mehchu@reddit

Depends on SLAs, licensing included, liability etc… supported a company in the pharma industry and had a ratio of 50 users per engineer and only 1 first line. But the expectation is slightly ridiculous because their employees time is worth so much every issue had to have someone free to look at it essentially immediately.

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radcoreathome@reddit

The problem is people calling themselves "engineers". Most of these people are technicians. This is important because if your company views you as a technician you role is hands on and limited in scope as such they cannot just throw every bit of problem at you, there is a clear defined skill and duties. When certs came out and cisco and MS startrd calling everyone an engineer, it just became a generic term to mean you will have to deal with every tech issue. Now, the hard truth is, there are too many players on the market and many should shut down, a few very large and medium size firms would do a lot better than 1000 small ones, just due to all the overhead to even get the product out. Truth is, ivve seen many large businesses not even able to afford a CRM, ERP and IT database... They use Excel and scripts. OSS and BSS and busines analysts, licences etc. wow.. as if they can pay for all this and offer to pay you a decent wage

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ObeseBMI33@reddit

C suite cousin’s company

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packet-zach@reddit

The real answer right here. Businesses doing businesses things and not really caring about the lay of the land as long as number go up for them and family.

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winky9827@reddit

> as long as number go up for them and family. The problem is, how many people need to get laid off at XYZ company because of stupid ass business decisions like paying an MSP $600K/year for supporting 250 users? Wasteful spending at the C-level costs jobs, and quite frankly, it's an unspoken evil of doing business this way. Needs better visibility.

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TechJunkie_NoMoney@reddit

Have you done the math on this? It’s 200/user/month for 250 users. We also don’t know anything about this MSPs billing model. They may be including M365, backups, A/V, etc. OP only said that’s how much they pay their MSP. If they’re reselling services, that eats into the MRR. Almost every top-tier MSP I’ve worked for charges roughly this for our full suite of tools. It’s really not that far-fetched.

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winky9827@reddit

I'm not questioning the MSP's pricing. I'm questioning the value of an MSP for that situation to begin with. I've been the sole support for ~200 users. I've worked for a company with 10 locations and ~5 IT admins. That's not the kind of volume you need an MSP for, unless your business model can justify it.

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BitterAstronomer@reddit

Just curious-- if you're the sole support for 200-something users, what happens when you're out sick, or need to take a day off, or maybe even go on vacation for a week or two? I'm asking seriously, because I am also the sole support for roughly half as many users as you, and other than official holidays when the company is closed (seven days per year) I have not had a day when I was truly "off" in about a decade. This summer I'm going on my first vacation in forever-- to another continent, no less-- and I'm still trying to figure out who can possibly cover for me those two weeks I'm gonna be out.

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ns8013@reddit

It's painfully clear seeing so many comments like this just how poorly educated many of you are on the actual costs when it comes to IT and running a business in general. You're probably the same type of people that sit around bitching about how nobody in a management role does anything of value, and their salaries should all go to the hard workers such as yourselves. It would be laughable if the average person reading your thoughts would understand just how offbase you are.

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winky9827@reddit

> Look at me I know everything, ya'll just need mo' experiences and stuff OK, so I'm paraphrasing. I've been in the business 25+ years. I've worked for F500, medium and small businesses. I've worked with MSPs, and without MSPs. They have a place, but not everywhere.

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peoplepersonmanguy@reddit

Plus licensing etc...

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TechJunkie_NoMoney@reddit

And insurance, workers comp, 401k, management of the techs, overhead, the ticketing system, etc. I don’t think these techs really realize how much they cost a business.

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holysnatchamoly@reddit

Right on the mark.

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ns8013@reddit

And you covered all the licensing costs? Some of you clearly don't have enough experience to be having such strong opinions on this topic.

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lowNegativeEmotion@reddit

And here we see the birth of a new MSP.

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RealitySlipped@reddit

Me too. Three physical offices, one in the middle of nowhere, 320 users. Just me, myself, and I.

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systemfrown@reddit

It’s almost like different companies in different businesses have different requirements.

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2drawnonward5@reddit

1:300 is a ratio that works for some companies and not for others. I'd be careful saying something should be expected cuz I did it.

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NameEnvironmental358@reddit

Yea and I guess that one person also never takes vacation or gets sick lol

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Nemphiz@reddit

I think he just mentioned it to show how ridiculous it was to pay 600k for that little or a foot print. Not that anyone should follow his path.

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Any-Fly5966@reddit

Depending on location and services offered, its not a stretch. Some small companies outsource everything but desktop support. So 600k for a CISO, 24/7 security team, network engineers, etc, it can get up there.

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ikeme84@reddit

Yeah, it all depends on expectations. at first I also thought 600k, wow. But thats only like 6 full time engineers at 100k each. Even less if you count for security devices/licences, 24/7 support etc.

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Nice_Pressure_3063@reddit

Where are you finding engineers willing to work $100k?

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PowerShellGenius@reddit

Not just that... if they budget $100k, they need to find someone who will work for a lot less, probably under $70k. Benefits are not free. Every dollar you pay in FICA tax (soc. sec. / Medicare) deducted on your check, is matched by another dollar the employer pays and isn't allowed to deduct from your check. Providing a health plan that meets ACA affordability standards - you may think your premium is high, but your employer is still probably paying over 70% of it already! There are other percentage taxes on payroll they aren't allowed to pass on and deduct, such as employer's contribution to the unemployment fund depending on the state. The employer will also generally carry insurance for paying out worker's comp claims and the premium is a percent of total payroll.

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TechJunkie_NoMoney@reddit

I think everyone should go through some sort of business class just to learn the basics like this. I can easily point out the people here who have either owned a business or spent 1:1 time with an owner. It’s equally as easy to point out the employee mindsets. It’s like night and day.

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PowerShellGenius@reddit

I mean, I don't really know any business owners... I've had economics, business and accounting classes at the lower division level as general education requirements for my bachelor's, though. Also, I try to be informed about politics before voting. Some people say we have one of the lowest tax rates in the developed world while others insist it is among the highest. Sorting this out includes understanding all the various types of taxation at different points as money flows through the economy, to understand the total percent of the economy that is taken as tax, without being blinded by how many places it's split up into.

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TechJunkie_NoMoney@reddit

You know what, I just realized this is the sysadmin sub, not the MSP sub. Now it makes more sense.

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evantom34@reddit

Plenty of non HCOL places 100K is a solid salary.

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BattleEfficient2471@reddit

Ones that work for an MSP. So not going to be top quality, generally speaking. I know some MSPs are great, but 95% are not.

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fernandoaaeng@reddit

Remote from Latam

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TaiGlobal@reddit

Just stick around this sub for a while and you’ll see plenty of do everything IT guys making less than that. Seems crazy to me.

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kdavis37@reddit

Fresh out of college, usually

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thefudd@reddit

Seriously, I manage 200 endpoints and 7 locations.... alone.

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radiumsoup@reddit

And do you pay for licensing out of pocket? Most modern MSP contracts include licensing for Microsoft and A/V, SoC, SIEM, etc

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thefudd@reddit

Yeah and it's no where near 600k

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radiumsoup@reddit

Then you're not charging enough. $300 per endpoint all in with E5, SIEM, SOC, anti-ware, backups, and a solid security stack is normal. I know a few outfits that charge $300 and don't include the cyber security stack. But hey if you wanna cut yourself short...

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thefudd@reddit

Oh I'm not an MSP (anymore)

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SugarDaddyNYCT@reddit

Then why are you talking?

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BBH_Kal_El@reddit

I manage 300 at 15 locations alone. 2 main locations and then all the others vary from 5- 20 endpints. I can tell you I don't make close 600k/year!

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Immortal_Tuttle@reddit

You don't cover licensing, mate... That 600k is all inclusive.

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byronnnn@reddit

The other thing these single IT companies don’t realize is that if they leave, the company is fucked. The company is taking on significant risk only have a single IT person. If the company had an MSP, they are responsible for getting new staff up to speed on the client so the client doesn’t have to hire a guy and hope for the best. There is a lot that goes into it. 600k for us would be about a 325-350 person company without 365 licenses, everything else mentioned and maybe a few additional security tools.

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IloveSpicyTacosz@reddit

Same lol some of these people need a team of 6 to manage 100 endpoints lmao 🤣

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Key-Level-4072@reddit

Yeah. That was my first knee-jerk thought. That’s a wild price for only 200 users. But I’m guessing they probably were doing a lot. I would expect Cadillac level security, full intune mgmt, and it all operating like a well-oiled machine.

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rcade2@reddit

It's 200/endpoint/month. That's not anything like out of bounds. It's actually low/older pricing in many markets.

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dbh2@reddit

a lot of misinformed folks around here. You are not one of them.

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TechJunkie_NoMoney@reddit

I said this higher up, but I’m seriously appalled by how many people on this sub don’t understand business math.

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dbh2@reddit

I get the feeling a lot of them are just lower to your technicians without business experience or exposure

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BreadfruitNo4604@reddit

Can be pretty common depending on the level of the service.

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djsyndr0me@reddit

This. We have a third of your endpoints but pay one tenth of what you do.

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Ok_Employment_5340@reddit

I’ll be your MSP for 300K a year.

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StuntedGorilla@reddit

And you’ll be bankrupt in 6 months.

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SatiricPilot@reddit

Hardly, that’s a bit under $150/user which is perfectly doable unless they want crazy SLAs/Compliancies. It’s not a money cow but far from a money pit as well.

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BawdyLotion@reddit

300k/year would be 100/month/endpoint. Licensing alone will take 50-80/month/endpoint before you even start to include, company overhead or any needed hardware. Maybe they are skimping on licenses but to hit 100/mo/endpoint and not be losing money you often will be cutting corners somewhere.

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SatiricPilot@reddit

At the risk of starting an argument lol. Your numbers at cost seem extremely high. I can provide everything for a fairly high level of security including labor and licensing at $125/user and still make a healthy margin. So I’m not sure what you’re putting in there that would make that not possible. Granted of course we have some higher cost items that could be tagged on to make it a lot more and we of course try to make as much as we fairly can. But at $125/user we could easily support a 200 user org with standard infra and have healthy margins.

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BawdyLotion@reddit

Admittedly I'm based in Canada so sometimes my mind jumps to converted costs which can throw things off. I see 150-200/seat being considered quite normal for full service MSPs in the states though.  My numbers are based around business premium, device backup, 365 backup, EDR/SOC/SEIM, password manager, PAM, security awareness training, documentation platform, PSA, RMM.  That's just raw licensing requirements before touching on support costs to maintain and configure any of these systems or the labor involved in unlimited on site/remote support or any bundled telephony options. I also am blending in costs for an unknown number of locations, network devices and servers because we're basing our guestimates around 'total MSP spend vs endpoints'. Even if it's just a couple random servers/VMs, the backups and security costs will add up.

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loadbang@reddit

Licensing per seat per month for a UK MSP: EDR with 24/7 SOC £6, SaaS Backup £3, password manager £3, SIEM £4, awareness training like KnowBe4 £5. RMM/MDM would be included with user support that would be between £35 and £55 per month. M365/GW or Adobe etc being on top. Charge any more than that in the UK and you won’t be competitive.

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BawdyLotion@reddit

Throw business premium /e5 in there and yah, we’re talking somewhat similar numbers. I mentioned rmm/psa/documentation platform because it will add licensing costs of at least a few dollars/endpoint on average. That’s all still before any labour costs or other overhead the msp needs in order to operate and provide services.

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SatiricPilot@reddit

Fair enough, conversion makes a big difference haha. I’m definitely talking in USD. I think you can be fairly full service with quality staffing at $150 though you’re on the lower end. Have to start going north of $300 if you’re starting to provide any serious customer facing automation or higher level security.

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BawdyLotion@reddit

Yah - we're definitely on the same page. My argument was solely based around 100/endpoint (after blending in all locations and server based costs) is very low end depending on what's included.  100-125/endpoint can be just fine depending on what's included but almost always is going to have some additional line items being involved (servers, network or location based fees)

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9jmp@reddit

They could have e5 + creative cloud for each employee and you're already underwater. I'm really curious to see what the entire package their msp is providing. Heck even their veeam licensing can get up there if they are for some reason a storage heavy company. My company has two users with 60tb of data each.

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SatiricPilot@reddit

Fair enough, but that’s far from common and even in a heavy creative company you wouldn’t have all users licensed that way unless you’re just not paying attention to business costs.

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it_fanatic@reddit

+1 - its ridiculous but there are msp‘s out there with the goal to rob the hell out of their clients…

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AlejoMSP@reddit

That’s 250$/per device a month. Holy fuck. We see prices as high as 60$/per device and freak out. What CFO signed that contract. I have a bridge to sell them!!!

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SweepTheLeg69@reddit

Robbed is putting it mildly.

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Enphyniti@reddit

Came here to say this. Hey OP - I'll do it for $400K annual, Lol

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BOOOATS@reddit

For real! My user base/endpoint base is a little over twice that, and with 10 full time employees, our budget is well under that (not counting software subscription fees etc)

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busterlowe@reddit

Idk. If it’s an international company, public, in a regulated industry, 24/7, zero down, etc than this might be a good deal. It also depends on their IT team. Sometimes we charge more if the internal team is under skilled, creating outages, etc.

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discosoc@reddit

Maybe. That's $250/user/mo. Once factoring in a variety of licensing, features, and support... it could be entirely reasonable. My normal fee's for white-glove service are $150/user/mo which includes most of what he's referencing except for the networking equipment. Depending on the client's workload, uptime requirements, and overall complexity, an extra $50-100 per seat is very possible.

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GrouchySpicyPickle@reddit

Hey could you break down their pricing structure for us and show us why that 600k/year was a robbery? I'm intrigued to find out from you which services were included in that price, which licenses, what SLA, etc. Oh, and please be sure to include how many servers were being managed, how much data was being backed up, what cloud services were being managed, etc. Bust out your calculators everyone, /u/fieroloki is gonna educate us with his extensive knowledge on MSP pricing and this client's exact contract details. 🤣 (hint.. He has zero clue. He just saw a big number and panicked)

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AltruisticStandard26@reddit

We are the same size as OP and pay our MSP 60k a year. In Canadian dollars

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uniqueglobalname@reddit

You are paying about $25/cdn per month, per user for, Microsoft365, email ,barracuda, Knowbe4 and Trend licenses? Sign me up!

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Boyblack@reddit

Yeah, that's freaking crazy. We pay roughly $96K/yr. Our internal IT team consists of 3, including myself. We can handle most of it, but the MSP is there to handle the difference. However, we only have about 170ish users.

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Randalldeflagg@reddit

We are paying a local MSP $60k a year. But they are only doing networking config backup, edge monitoring, and are the "Break Glass" backup if things implode and our 15 member IT team can't resolve without backup

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dbh2@reddit

96K per person?

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Boyblack@reddit

We pay around $8K per month for an MSP. I'm not sure how much it is per user. But it comes to $96K for the year.

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renderbender1@reddit

Now add on the salaries of the three internal IT members you already have, and the cost of all your SaaS licensing and you get a number closer to realistic for an MSP that's doing full IT department replacement.

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mdervin@reddit

But OP has at least 2 internal guys as well.

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darkstar3d@reddit

A lot of information is missing from OPs story. All these comments are speculation. 😎

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Boyblack@reddit

![gif](giphy|TPl5N4Ci49ZQY) Oh damn, I didn't even think about that. Yup, you're right.

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SceneDifferent1041@reddit

Even 60k a year sounds high.

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Wendals87@reddit

60k a year for 200 devices? No way. That's one person salary doing EVERYTHING

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Beardedcomputernerd@reddit

Please explain.. 200 business premium licenses alone is 50K a year...

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CheezeWheely@reddit

Its actually market rate.

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BBH_Kal_El@reddit

Yes. That should've been like 100k/year

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confusedloris@reddit

Exactly lol

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activekitsune@reddit

When I hear stories like this; encourages for more cloud certs and consult: I'm sure I can get clients based on just certs themselves and stories like this 😆

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tdhuck@reddit

This is exactly what I think when I hear that companies want to cut costs and save money. Same idea....they were paying 600k for 100k worth of services for 10 years and NOW they want to save money. To be clear, I'm not being negative to the OP, I'm just using this as an example.

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UnimpeachableTaint@reddit

It could have been “FU go away” pricing, “otherwise this is the price to deal with you”.

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2drawnonward5@reddit

Or, reading what OP said they provided, it could be that they did a lot.

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ProtectionSubject615@reddit

Someone getting a kickback??!

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jman1121@reddit

I'm in the wrong business....😞

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NewDividend@reddit

Exactly what i was thinking, work at a clinic in Switzerland with almost the same footprint, we're paying i think 240k a year (20k a month) and they have to deal with GDPR/Medical data and we're in one of the most expensive countries in the world where labor aint cheap!

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moldyjellybean@reddit

Is it possible the person who made the decision , paid a friend/relative/mistress who owned the msp. 600k for 250 endpoints is beyond a scam . What’s the word for scam reaching this kind of level

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harbinger-nz@reddit

I think the words are "highway robbery"

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boostwtf@reddit

Depends how many sites and what kit, I suppose? A few Cisco/Juniper license renewals could be 500k :D

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xMcRaemanx@reddit

Might have thrown the cost of licensing and equipment plus PS time in there which can inflate it significantly. Hell that might have just been their vmware renewal /s (I hope)

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xangbar@reddit

I work at an MSP and we have a client with similar size and services and I don't think they are paying anywhere near that per month. Definitely got robbed.

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anonymousITCoward@reddit

And no support services either... we need that sales dude STAT!

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BawdyLotion@reddit

Seems pretty reasonable to me. 200/mo/seat isn’t budget price level but isn’t out of the ordinary.

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katha757@reddit

Glad I’m not the only one that thought this.

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Suspicious-Path5016@reddit

We recently got introduced to Seashore IT [www.seashoreit.com](http://www.seashoreit.com) , hands down one of the best IT MSP providers. I can't say enough of how much money they have been able to save us

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LucidZane@reddit

That's double what it should cost what the heck

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TX_RU@reddit

This is an incredibly incomplete post. Was msp renting DC space for you? We're they purchasing all the hardware to manage services you mentioned? So many questions...

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emirikolc@reddit

I work for an MSP. Every client relationship is unique. The ones where we are hired as everything including CIO are very different than those where we provide service desk or ad hoc support. Software, hardware, licenses… an important but very small part of the picture. Without the full picture it all conjecture. But it will all show up in “Our MSP cost X”. 😀

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PMmeyourannualTspend@reddit

You need to explicitly state if the costs covers the licensing and hardware being managed or is just the management fees. It will radically dictate which direction you need to go if the goal is to save money.

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Aggravating-Look8451@reddit

Hire one more compentent person and you have enough to cover 200 employees. You could pay them $100K and still save the company a half a million.

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heapsp@reddit

you cant get a really good sysadmin for 100k in most areas, we pay our desktop staff like 80k

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equipmentmobbingthro@reddit

Honestly get at least 2. Being single sysadmin is not good / nice for many reasons.

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Mr_Squinty@reddit

Try being the only admin at an MSP 😩

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zzmorg82@reddit

You might as well be an consultant at that point, lol.

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Aggravating-Look8451@reddit

When the company has under 200 people, it's really hard to justify it to upper management, but yeah - if you can pull that off, even better.

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SCUBAGrendel@reddit

Except when you go on vacation and there is no one to cover things when they go wrong, then it is an easy sale.

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axisblasts@reddit

Agree. Have coverage to avoid 24/7 on-call. Pay em well and they won't quit. 2 skilled guys at 125k is still saving 350k. Plus you get guys on-site all day vs an msp who does the minimum

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Aggravating-Look8451@reddit

or they fire you... that's a gamble, depending on the person you work for.

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fieroloki@reddit

Well, they have been spending 600k a year on an MSP. Lol

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il_maio@reddit

You still have to pay for all the licenses

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Stryker1-1@reddit

People seem to forget the overhead of having an employee, if you pay them 100k there are still payroll taxes, benefits, time off, HR to manage people etc

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Aggravating-Look8451@reddit

All of that combined already exists for every other employee, the Cost is distributed.

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Stryker1-1@reddit

Yes I understand cost is distributed but an employee usually cost about 20% more than just their salary, so if they are making 100k the true cost is more like 120k

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Aggravating-Look8451@reddit

Right. That’s still waaaaaay less than $600k even when you figure in your licensing.

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Stryker1-1@reddit

Yes but if the msp was providing 24/7 support with a decent SLA you aren't getting that with 2 guys. Now you're at 3 or 4 guys. Without seeing all the numbers and contract it's impossible to tell if the price was in line for the services offered or if the msp was taking them for a ride

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Aggravating-Look8451@reddit

But it’s not just about the price. In house staff have a vested interest in keeping you functional and up to date. MSPs have a vested interest in continuing to have a reason to bill you.

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TechJunkie_NoMoney@reddit

That’s a wildly incorrect statement. The interest in an MSP is to make sure you don’t have any problems. We manage 3000 endpoints with 2 help desk staff and our professional services engineer (me) is the only L2. Our L3 is the owner, and we have 1 network administrator. Our clients don’t call in because their networks work properly and when we do projects, they’re scoped correctly, implemented properly, and documented heavily so that when we hand off to support, it’s easy enough that my 7 year old can troubleshoot. Right now we have 4 service desk tickets that are going to sit over the weekend because we’re waiting on clients to respond. If you have good processes and people, the clients business is your business.

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StuntedGorilla@reddit

How on earth does this nonsense get upvotes. Do you think licensing is free?

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Aggravating-Look8451@reddit

Do you think people need an MSP to manage their licensing? You do realize most medium sized businesses manage their own, right?

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StuntedGorilla@reddit

It’s not just managing them it’s paying for them. So in your mind you go “great let’s sack the MSP and get $600k!” And then next year rolls around and you have to pay $300k for licensing and your boss says “what the hell man I thought we got rid of the MSP”.

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illegal_deagle@reddit

And you definitely won’t have the bargaining power to negotiate license cost like the MSP.

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Aggravating-Look8451@reddit

You just saved your company $300k. Do you know how math works?

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StuntedGorilla@reddit

Lmao and the rest just manages itself for free.

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Aggravating-Look8451@reddit

If you're halfway competent, you manage it yourself with your staff. Hiring an MSP for anything beyond occasional off hours support is an admission of failure.

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StuntedGorilla@reddit

The staff that don’t currently have capacity to do that. So you’d hire people for free.

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Aggravating-Look8451@reddit

If your staff don’t have the capacity to do the most basic functions of and IT department you should be fired along with them.

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StuntedGorilla@reddit

Lmao righto buddy. Pointless to continue this conversation.

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painted-biird@reddit

Ignore this guy/woman- their spouse cheated on them with an MSP.

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Nice_Pressure_3063@reddit

I think you are not counting the cost of licensing, which I’d assume is 25% of the price. Also, not sure where you are located, but a decent person in New England is gonna run you $150k easy. 2 people plus the licensing is $600k

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Aggravating-Look8451@reddit

I work in Boston. I'm an IT Director for a large AEC firm. We have 500 employess and 8 IT staff. 4 Dedicated to Helpdesk. None of them make more than $100K. Also - You don't pay your MSP for licenses unless you fundamentally don't know how to run your business.

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Sasataf12@reddit

>You don't pay your MSP for licenses unless you fundamentally don't know how to run your business. MSPs are often also resellers and can offer better pricing and licensing terms than going direct. If you didn't know that, I'd argue that you're the one that doesn't know the fundamentals.

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Aggravating-Look8451@reddit

It's not about price. It's about control of your licenses. IF that MSP goes bust, it's a giant pain in the ass to get things sorted out. Not everyone relies on going to "the lowest bidder" when making critical business decisions.

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painted-biird@reddit

Choose a proven reseller then?

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RiddleofSteel@reddit

We no longer use our MSP for support, but their licensing for O365 is even below what CDW can do with CoreTrust pricing. Saves us about 30k a year on 0365.

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PMmeyourannualTspend@reddit

That's because the core trust contract administrator steals 3%.

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beserkernj@reddit

This here. It’s not staffing. It’s MSP.

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Nice_Pressure_3063@reddit

Yeah, it seems like people think putting 2 fresh college grads in will solve the problem. In my world, that would make the problem worse. Solving the problem correctly vs putting out fires l.

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Aggravating-Look8451@reddit

Who said anything about fresh college grads? I said COMPETENT people.

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Nice_Pressure_3063@reddit

There are other comments besides yours. We are in different industries fulfilling different needs. I couldn’t even hire a college grad for 100k fully loaded.

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Aggravating-Look8451@reddit

We work in the same region, IT support roles pay the same no matter the industry. You're pushing for this place to justify paying $600k for something they could easily manage themsleves for half that by hiring one or two people.

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Nice_Pressure_3063@reddit

Again, you aren’t subtracting the licensing costs, so you aren’t doing the math correctly. Also, not a chance in my industry. IT budget would easily be $10-15M for a company with a headcount of 200. What’s yours?

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Aggravating-Look8451@reddit

I am. The upsell price MSPs charge on licensing is stupid. If the MSP goes bust because they mismanage or lose a big client somewhere else, all your licenses are in then in limbo and it's a giant mess to correct. Going with MSPs for mission critical things like licensing is going away as a practice, just likethe repro/copier industry died, and many firms are doing away with "Cloud" stuff and now re-patriating back to on-prem in many cases, because it turns out, trusting a small time provider to gamble on your most critical technology functions was a bad idea

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Nice_Pressure_3063@reddit

You’ve got it all figured out. No reason to discuss.

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Aggravating-Look8451@reddit

No, we were discussing the option to hire in house staff in my very first reply that got 100+ upvotes, and a handful of MSP guys reply-guying to me because that threatens their existence.

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Nice_Pressure_3063@reddit

I dunno man, I bet you, your 6 guys, and the cost of your stack is 600k. Your model is not cheaper, it has overhead you are not accounting for, and has limit flexibility. Almost certainly you provide higher value though. At 200 people I agree you should be in house or direct contracting support. It’s the fact that you think you are cheaper is what I’m struggling with. I’ve done both sides. Mostly in house. Clearly a different vertical that has much different comp expectations.

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painted-biird@reddit

Yup- I also don’t think two people is enough- nobody likes working on a skeleton crew. While it’s possible, it’s far from ideal.

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Nice_Pressure_3063@reddit

Yeah you are missing the point. Best of luck.

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beserkernj@reddit

Msps get devalued. Ive been on both sides. There is a lot of value in msps having tools ready, expertise, and most importantly, process. Good msps that’s is :)

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Nice_Pressure_3063@reddit

Agreed. That’s just it. Most are terrible and it’s understandable why. It’s a tough business. I think people underestimate the true cost. Fully load comp, benefits, equity, 401k, PTO, recruiting, managing, processes, policies, turnover, continuing education, etc. I expect this person to break even on moving to an internal model, but it probably makes sense for them at this point.

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beserkernj@reddit

Couldn’t agree more. It will save $30k first year and then the internal team will want raises and the cycle will continue.

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Nice_Pressure_3063@reddit

💯

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discosoc@reddit

Gotta buy all the licensing and equipment that was included as well.

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TechyCyberGuy@reddit

You’re welcome to message me. I’m not going to be cheaper. But I can help you breakdown what you should be getting. 250-300/seat is a normal price when Microsoft products and cyber security is included. There are some major questions you should ask. 1 . How much would a cyber attack cost you? 2. Would your insurance cover you if a cyber attack happed? 3. Compared to your revenue is this inline with the normal. (4%) 4. When was your last cyber security risk assessment? Leaving a good MSP solely on price doesn’t seem wise when you might be losing protection that can save your business.

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christorch72@reddit

That does seem high. I have a current client that pays roughly 200k per year and they're slightly larger than you. They receive 24x7 eyes on glass monitoring and 8x5 remote help desk with advanced EDR, Email Security with DLP/advanced phishing protection, patch management, back up and Zero Trust. Plus a few other services.

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Izera@reddit

Lets break down some numbers on what some of the services you listed cost. Connectwise Automate $3.00 (Billed Per device) Connectwise Control $1.50 (Billed Per device) Office 365 Business Standard $12.50 (billed per user) Barracuda $2.66 ish (billed per email box) KnowBe4 training $1.10 (billed per email box) Trend Micro worry-Free business Security $26.98 (Billed Per device) for a total of around $50.00 per device/user Just those services listed above are Cost you in the neighborhood of $12,500 a month. And this is only accounting for the things you listed and we are aware of. This doesn't account for any additional services that also have costs the MSP needs pay to support your business. Do you have any Entra services(Formerly Azure)? Those are very expensive also. I also want to point out that it appears you have minimal complaints about service. Meaning they must be doing a good job at managing what you have tasked them to manage.

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Jimz0r@reddit

>Connectwise Automate $3.00 (Billed Per device) > >Connectwise Control $1.50 (Billed Per device) > >Office 365 Business Standard $12.50 (billed per user) > >Barracuda $2.66 ish (billed per email box) > >KnowBe4 training $1.10 (billed per email box) > >Trend Micro worry-Free business Security $26.98 (Billed Per device) Yes, but non of those services are being SOLD at those prices. If every service an MSP sold was sold at cost price you'd go out of business before you can land your first client.

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Izera@reddit

Oh I know that. I was just pointing out that even with the at cost price that they’d still be getting a good deal

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-maphias-@reddit

Oof. Thats robbery. You could hire 4 or 5 FTE for that. Which is more headcount than you need for that size

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FletchGordon@reddit

holy moly you guys were getting SMOKED. We have \~400 users, \~260 endpoints, Cisco net and phone, backups, and there are 4 of us.

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TechJunkie_NoMoney@reddit

Do you all make 50k/year and pay for all MS, A/V, backup, etc licensing, your health insurance? It sounds like you’re getting smoked my guy. And it takes 4 of you to manage 400 users?

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FletchGordon@reddit

Why the fuck would the employee pay for Microsoft licensing? We have a Director a data analyst. Another sort of data analyst and me. Nothing is siloed, We all help each other out. And we’re making much more than that, so yeah we’re being taken care of. We’re a great team and no one is overworked so I don’t know I think you were trying to burn me but failed miserably.

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TechJunkie_NoMoney@reddit

Because licensing is part of the $600k. Also, you’re most likely not accounting for additional employee overhead costs. Before you start thinking you know everything, take a step back and look at the big picture. Some organizations are more equipped for and need internal IT, others, not so much. I wasn’t trying to “burn” you, just pointing out the associated business costs.

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FletchGordon@reddit

I used to work for an MSP, saw the numbers, and can confirm OP was getting burned at that 600k price.

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TechJunkie_NoMoney@reddit

Were you in sales?

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FletchGordon@reddit

Senior tech. Friendly enough with sales to know what we charged, realized i was getting shafted, left. Talked to customers after i left and learned more. Not sure why you have a bug up your ass over my comment. 🤷‍♂️

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f909@reddit

I’d be in hog heaven if I had a partner to work with, plus outsourced a majority of everything to a MSP, but we do only have 100-110 end points.

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username17charmax@reddit

I blame the mail admins. It is some common sense to block mail from conflict entities: Russian Collective Security Treaty Organization (CSTO) Russia Armenia Belarus Kazakhstan Tajikistan Serbia Cuba Venezuela North Korea Iran Syria Yemen Oracle.com

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Xirma377@reddit

$600k/yr is the low side for a good quality MSP for 200 users. Depending on the scope, it could be as high as $1.2M/yr. I'd strongly encourage you / your employer to stick with your current provider, considering they "do a fantastic job".

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Fun_Peak_7164@reddit

Yeah, need to get an itemized bill from the MSP to break out services from licensing…

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Tychomi@reddit

2 IT team for that many users and a 600k MSP lol I can't wrap my head around these numbers Our MSP is shitty and they pretty much just test their solutions in our tenant without testing it themselves but we are nowhere paying that much and sometimes they have saved our asses (no tier 1/help desk support just for escalation)

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stuartsmiles01@reddit

Licence costs will not evaporate no matter how much they are disliked or wished away. Accounts software, sales / erp, Microsoft licences, Adobe, document signing solution, hr software, payroll software, phones, mobiles, all per user per month. Then you've got cal's, servers, client devices, network, security software, helpdesk software, rmm package, everything adds up, call handlers, hours working on adds, moves, changes, user deletions, archiving, backups, retention. How is the budget going to look after the change and what are the expected areas where savings will come from?

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patdan69@reddit

1. Move away from AD 2. Move everything to the cloud 3. Set up integrations and automations properly Do that and a company that size is manageable with 2 IT people. 3 would be better. This would save you a good amount of money and would make everything much better is done correctly

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vbagal@reddit

One of the other postershere (CasualEveryday) brings up a decent point. (I'm sure other responders have as well - this was the first one I saw.) What was exactly offered at that price point? The fact of the matter is, while the number looks steep, it really depends on what you are getting for that money. Additonally: \> What IS the SLA (Service Level Agreement?) - What is / was the company's response time? \> Is it all inclusive? (is hardware lease or warranty maintenance part of the agreement?) \> What level of protection are you getting from them in case the worst happens? (Catastrophic failure, Cybersecurity attack - something that you see in the news every day, and so on) \> Is on site work included? Periodic reviews? Equipment cycling? There are a lot of moving parts - if the company you will soon be leaving cant answer those questions, and a ton more, then you are right, it is time to move on. BUT be mindful of the fact that if you are looking for all-inclusive, concierge-style service, you are basically asking for a leveraged IT department, and those costs, are easily within range. (Full Disclosure - I am part owner of an MSSP.)

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Network-iQ@reddit

600K A month? Was someone maybe playin' some horses on the side and laundering the payoffs to the bookies through an "MSP"? That number of seats would figure at around $75k for us - plus backups, switch, firewall, server management - would still be under 100 depending on the numbers of those devices, etc. You might wanna have a peek at the company checkbook and see if there were payouts to guys named Moose and Rocko.

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eddiehead01@reddit

Jeez, I'm not even sure we paid our MSP 600k over the 15 years my company used them before I dialled them back

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polarverse@reddit

Doing the math that's around $200/endpoint/month which is close to what I bill out to my clients that have a very inclusive plan. Keep in mind this amount would include almost everything short of equipment purchases and project work. If you try to replace that with in-house IT it will cost you more as your expense will not just be your IT staff salary but you'll have to take on licensing and other service costs that were bundled into your services with an MSP. You'll also lose a lot of the technical experience you get with an MSP and be limited to the in-house knowledge of your IT staff which may cause delays in getting resolutions to issues that come up (which can be a hidden cost). Seems more analysis is needed here to what that $600K includes.

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realdanknowsit@reddit

A common issue I always see is that the customer doesn’t have any idea what they are paying for. I once had to watch an IT Director have to “cut” our costs so they took over their own O365 licensing just to have our invoice drop $20K a month, while then having to pay 10% higher rate to Microsoft because they got no discounts. Yet it made the CAO happy to see how much they pay me cut down.

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Juniper0584@reddit

2k+ per endpoint is crazy. I should start an MSP

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dbh2@reddit

Per year. And trust me - don’t.

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mammaryglands@reddit

Itt: a bunch of engineers who have never seen the true cost of doing business

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dbh2@reddit

Yep.

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TechJunkie_NoMoney@reddit

I realized I was on the sysadmin sub after asking myself “what’s up with all the weird employee mindsets?” Ahhh, it’s all employees.

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alexferraz@reddit

we did a couple of years ago. Same problem. Nobody died because of it - yet

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sinclairzx10@reddit

For 600k they must be selling you equipment to as a service.

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dbh2@reddit

Doubt it. And it wouldn’t be all that overpriced even if not.

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sinclairzx10@reddit

On reflection yes that’s fair.

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zeliboba55@reddit

We called such accounts golden goose.

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saltysomadmin@reddit

Right, at this point I'd offer a steep discount. Would still be making a killing at 50% off.

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dbh2@reddit

I would bet money you’re wrong.

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the_syco@reddit

Unless the MSP is trying to get rid of them by making the price higher each year?

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devino21@reddit

We’re bigger but we were quoted almost $200k just to manage our backups. This was a few years ago with Avanar/data domain, but still… is just a piece of my job. I like that I can hold it over management though.

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CyEriton@reddit

I’ll do it for you for 300k

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Meowmacher@reddit

This breaks down to $200/month per endpoint. While that is high it is also not absurd. You have to be careful and analyze what that includes. If they are including all that licensing, that could easily be half of it. Are they paying for the cloud backup storage too? That gets expensive quick. I suggest you collect all the licensing they are providing and calculate how much that will cost to maintain. The remainder from the monthly $50k is what you’re paying for labor. With that remainder, how many staff members could you hire, including not just their salaries but employee taxes, benefits etc. That’s your break even point. Would that number of staff be overkill to manage all the MSP was managing? Or would they be hard pressed to keep up? That will tell you whether you have an opportunity to save money or are about to walk into a disaster.

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justmirsk@reddit

Something is not adding up here. With the services you are referencing, I am guessing that they are providing your Microsoft licensing in this price point too. Depending on your licensing, this could easily be 10% of the price point you have suggested. The Barracuda and KnowBe4 is probably a 14K cost per year at 200 users. AV, depending on what specifically you have, is likely $6K a year or more for 250 endpoints. That puts you at around $80K or so (very rough math) that is just cost you will need to absorb on your own, outside of the MSP. That takes their annual services down to $520K. That would be around $173 per device per month for the support they are providing. Additional details are required here, such as confirmation on exactly what you are being charged for recurring services vs licensing/hardware CAPEX etc. From our perspective, we would probably be around the $150-$175 per device per month price point and we would include: * Cloud SIEM with 10GB ingestion per device per month - 1 Year log retention * 24/7/365 SOC as a Service * ZeroTrust/SASE client * DNS and web content filtering (Provided by SASE Client) * EDR for all endpoints * Passwordless MFA (This is a per user price point, but can typically get baked in with the per device piece) * Staffed helpdesk * RMM agent, patching etc * Full management of the environment, all components - With co-managed environments, this price point would be significantly lower, depending on the exact agreed upon scope * Backups are typically priced per GB of source data protected, but it all depends on the exact requirements To sum it up: If we were providing full managed services for your environment, including SIEM, SOC as a Service, EDR and SASE clients, we would be around $450,000 per year. If we were in a co-managed environment with a reduced scope, we would be between $120K-$200K, depending on the exact requirements, again including the cyber security services mentioned above. I am providing these details not as a marketing or sales tactic, but to give context from our perspective so you can gauge where things are at.

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Due-Set5398@reddit

600k sounds fine if it includes a few projects and a full set of services like this. OP made it sound like a bare bones service agreement. With enough projects and software renewals, I could see it being more than 600.

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justmirsk@reddit

Exactly, I believe this MSP is likely providing much more than OP is stating for this price point.

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Due-Set5398@reddit

Is the ConnectWise service some sort of MDR? Managed SOC isn’t cheap. Also missing is the size of that Veeam cloud repository.

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rhughes945@reddit

600k a year?? I'll be your MSP.

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ProfessorOfDumbFacts@reddit

I mean, my company doesn’t bundle Microsoft licensing into our per user or per endpoint pricing. We bill the client a separate line item for the licensing. However, for a company your size, without licensing, $400k+ a year is reasonable. My largest client is paying us nearly $80k a month without licensing. They are in the education sector, and get edu licenses. If they were paying regular licensing rates, $187k a year in licensing for Microsoft business standard for full time employees would be reasonable. Their licensing for their 10k part timers would be nearly a million dollars. Your rate is fair if licensing is included.

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schmerold@reddit

Start by bringing licensing in-house and ask for a credit from your MSP, Some MSP profit greatly from licensing, but mostly it has become a risky burden with little margin and 12 month contracts, putting the MSP at risk. Once that is settled in 6-9 months, ask for a few MSP "co-managed" proposals. Many MSPs see this as the land of opportunity, so you shouldn't have trouble getting proposals. If the incumbent has been doing a good job, and is 10-20% high, keep 'em. Leadership can budget for the MSP & two staff members, they cannot budget for two staff members getting hit by a bus. BTW: When asking for MSP proposals, favor proposals from locally owned MSPs, another trend is the mega-MSP, you will find yourself with frequently changing technical staff and frequently increasing prices as the mega-MSP grows and exerts more pricing power.

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Chance_Expert1967@reddit

I was brought on to help facilitate the migration from the current MSP. We pay about $35k/mo and have hired staff to facilitate the move. First and most expensive part was the help desk. A rather easy change and better for company. All the rest is just overpriced services. The model will change from MSP first to company first with MSP on a per hour support for projects or overflow. That will support your BoD directive. It can be done seamlessly if a good plan is put in place.

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jeevadotnet@reddit

I'm clearly not charging my clients enough. We're about 1/10 of the yearly cost you mention.

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ComGuards@reddit

Did that 600k/year also include a fully comprehensive, regular-tested BCDR plan for the entire org? Only way can think of to justify that kind of price.

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Due-Set5398@reddit

SOC as a service/MDR can easily be 6 figures. Backing up lots of data to the cloud can add up too. Something is missing here. For basic services, it sounds high but a lot of companies underspend on cybersecurity. Does “antivirus” actually mean EDR here? Theres more to this story.

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what-the-hack@reddit

People in this thread have no idea that things cost money in the real world. Let’s just do some back of the napkin math. Consider O365 licensing alone Lower end business premium - $20/mo x 200 x 12 = 48k Higher end At m365 e5 - $58/mo x 200 x 12 = 139k Telephony? $10/mo x 200 x 12 = 24k International calling? Another $10 per user on top of that AV? $2.5 per end point per month Power BI? Knowbe4? Veeam? Tooling up an IT department? Pension, taxes, workers comp? New England burden rate is ~42% on top of whatever 100k salary ya’ll think you can do this for. There is a non-zero chance that OP’s IT budget for 200 users is 600k which is pretty damn low considering the MSP may be the CTO at the table. I work with various ranges of MSPs. 150/user/month MSPs 550/user/month MSPs And everything in between. They all do well in their target markets.

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SquidsFancypants@reddit

600k for 250 endpoints and 200 staff is baffling to me. Staffing wise I'd be looking at around 1 helpdesk operator per 100 people. Knowing very little about your organisation you'll need to figure out what senior techs you need. You 100% should have an established relationship with an MSP as a fallback option for so many reasons.

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AlejoMSP@reddit

Goddang it. I’ll do all the same job. I’ll be your slave for 300k a year. I will do it all myself. Gimme money.

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KindlyCaterpillar145@reddit

In my previous job most IT was in house with some consultants here and there. Last year I joined an organization that had an MSP. I was excited to partner with one as I didn’t deal with certain things in my last role (servers, firewalls etc) and thought that I could handle the day to day and they would be back up when I couldn’t figure out an issue (on top of maintenance, projects etc) but they are lacking in support for the “smaller” issues and it became clear after a reorganization on their part, our current CSM team was put in place not long before my predecessor “left” and they were on the opposite coast where the last team had a local presence…and they did not keep up on documentation. My boss told me from day one they had already told them we would not be renewing, but I kept them on for another year so I could get acclimated (and I miss our notice window anyway). I’ve been shopping around and have a few good options. I’m actually meeting with our MSP next week so they can present a contract restructuring (I look at it as another bid to add to the pile) and I plan to make it clear we are not renewing. My question is, how does that usually go when you fire an MSP as far as handing things off? When I first met with them last January, I was asking in different ways “what are you guys handling for us” so I could get a feel for the environment but they were never completely able to answer that- like they sent over the agreement (which was outdated) and highlighted what they offer but still not what they actually were handling…as in, I found out months after the initial meeting I was still finding out things “oh so we have these VMs here…what are they for? I haven’t interacted with them” and some other things. How can I make sure I know what we are getting into when getting out of the relationship? If they secured licensing for us, does that just stay with them until it’s up? Can we do some kind of authorization change? I’ll admit because I’m new to some of these things and the day to day of this org has needed a lot of clean up, I’ve had my hands full and just stopped digging around after deciding we for sure weren’t going to stay with them. I’ll be reviewing the original and amended agreement and looking through my predecessor’s documents and invoices etc in prep for our meeting, but are there any pointers? I see this conversation has focused more on what you should be paying, but help me out here.

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majpayne1@reddit

This thread has been great for a laugh thanks y'all

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dragotha@reddit

I'll do it for 20% of that. Holy crap that's a crazy price.

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phrackk@reddit

lol you paid them 600k for that? Lolz lolz lolz

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T0astyMcgee@reddit

wtf 250 endpoints at 600k per year? Criminal.

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XellinialFalcon@reddit

I wouldn't want to be the MSP providing this service, unless I am pulling a minimum of 12 million a year ARR. A loss of this size would put most MSPs out of business, unless there is a really tight contractual agreement requiring the full payment of the contract prior to termination. Even then, you could spend a fortune chasing the courts to get your money.

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tiredadmin@reddit

All these comments and no ideal what region this guy is in? High price SF??? Austin???

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myrianthi@reddit

Now what was the cost when you exclude whatever licensing and other additions that you were paying for through the MSP? Are you also including IT budget for hardware here such as laptops, phones, DMARC reportint, and Adobe licensing? Then it seems you might actually be on point. Follow up with the hourly price of working with a technician, otherwise this doesn't really tell us much.

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MrTrapLord@reddit

That MSP literally conducted grand theft auto for that small of a footprint. 600k is f’n insane.

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johnwicked4@reddit

companies deserve expensive external service providers they fire all the internal staff, hire outsiders or offshore people and obtain bonuses for saving $ in the short term find out it's worse and more expensive over the long term, get rid of the offshore solution, hire interally under project budget $x give themselves bonuses for solving a problem (they created) rinse and repeat every 1-3 years as management rotates, each one using the same playbook

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Dramatic-Ad-4511@reddit

600k. Good God. My team of 2 manage 140 endpoints and users. One is my sysadmin/365 admin/mdr security system and the other my programmer/db/Azure admin. I manage them, the company and one of the owners. Since I trained both and have been in IT for 32 years, I can do pretty much everything they can. I even fill in when they are on vacation. I would never outsource to an MSP. 600k. Still floored by this.

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jecloer14@reddit

My org is around 150 users and 200ish endpoints. 2 person IT team handles it pretty well with caveat that our org needs aren’t super intricate.

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Beardedcomputernerd@reddit

So... that's 200K in salaries? 70k on Microsoft licenses. What about av licenses? Edr? Management software?

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AdEarly8242@reddit

That 40k not 70k in Microsoft licenses includes av and edr so…

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Beardedcomputernerd@reddit

Depends on what Microsoft license you use!? Business premium would be about 50K...

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jecloer14@reddit

Sure. Not really arguing the cost of the MSP. Just pointing out 2-3 people could handle that org size for a similar cost without relying on a third party. Everything’s got pros and cons. One big pro of have on site is that it is normally someone’s job in the department to manage costs and they usually have an incentive to do so. Whereas the MSP has no real incentive to lower costs and cut bloat. Which is probably part of the reason for the change.

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lestu_kastanjer@reddit

Wow 600k for this workload? My company would do this job for 50 k easily (small european MSP) ….

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Beardedcomputernerd@reddit

Eastern Europe where salaries are low I guess? Business premium licenses alone would be over 50K...

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TechJunkie_NoMoney@reddit

If read in a few places that European MSPs are literally a race to the bottom. Everyone is just trying to undercut each other to the point that they undercut themselves and do things like this.

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titomorrisiii@reddit

600K! is the one who signed the deal running for political office?

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rob-entre@reddit

I manage a group with ~100 users. They’re in for ~100-150k annually, and that includes hardware purchases. Sounds like we need to charge more!

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em-jay-be@reddit

I don't know how anyone is telling you the pricing is insane without any details as to what the workloads actually are ... I don't have any reco for you but good luck!

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bottleofmtdew@reddit (OP)

They handled our AD, DCs, Network equipment (Cisco), backups, Microsoft licensing, email security/filtering, Antivirus, and connectwise services They handled a lot, and did a phenomenal job on it, like if a company could afford them, I could understand for the quality

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hobovalentine@reddit

How much network equipment do you have? Is it just the typical MDF or do you have like racks of servers you have to maintain?

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Technical_Rub@reddit

Hire an experience SA and a helpdesk tech. Also find a good VAR to help manage the MS licensing. You'll still come out way ahead.

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m9832@reddit

and never get a vacation again!

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Technical_Rub@reddit

If you have a good team with good a good operations model, vacation will be no problem at all.

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painted-biird@reddit

Yeah, but that will likely entail more than two engineers.

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Technical_Rub@reddit

For 250 users it's completely reasonable.

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painted-biird@reddit

In terms of the actual workload, you’re probably right, but what happens if both people get sick? Or someone is on vacation and the other person is unable to come in for whatever reason. That’s why this level of users is tricky and a solid trustworthy MSP can be a great fit. If you hire 3-4 people, you run the pretty real risk of having one or more people being underutilized. I suppose a compromise would be having the an MSP still helping out with tier 1 stuff or the higher level architecture stuff.

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Technical_Rub@reddit

They have 2 people already, I suggested hiring 2 more. If they have good processes and documentation it will be more than enough. If someone dies unexpectedly, there should be adequate documentation that a contractor can come in on short notice and keep things running. It's done all the time in orgs this size. MSPs fill a role, but they aren't necessary in every case

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evantom34@reddit

Thought the same. SA and a L0-L2 that wants to learn and be trained up would suffice here.

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Technical_Rub@reddit

A note on the VARs, mot will do a free licensing analysis. I'd do this ASAP. You want to get a clear understanding of your licensing and compliance as quickly possible. The MSP sounds reputable, but I've seen plenty play very loose with licensing requirement (one even pocked our payments and didn't pay MS).

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redditinyourdreams@reddit

That’s just the basics

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discosoc@reddit

Pricing doesn't sound unreasonable, TBH. You're getting a lot of knee-jerk reactions from people who clearly don't have much insight with what IT budgets actually look like.

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skorpiolt@reddit

You still make it seem like you are freeing up 600k/yr, when in reality if you purchased licensing through them you’re “saving” maybe half that.

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jslingrowd@reddit

Does the Cisco gear belong to you or them? Meaning did you pay Cisco gear and Cisco support separate or that’s included in the $600k?

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spanctimony@reddit

Do you have a bunch of hypervisors and VMs that you didn’t mention? What you listed is all basic MSP service, should run you around $80-100 pupm.

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popegonzo@reddit

It obviously depends on the market, but that's a pretty low seat cost for a modern/quality MSP. $50k/mo is $200/endpoint or $250/user, depending how they count, which is still on the high side, but if they were in a major city, I could see that number being not the highest cost in the market, or if there were particular business needs in play. OP did also edit & say "a few hundred thousand" for a server refresh, which makes me think they have a sizeable server footprint. If that's $200k, that leaves $400k/yr > $167 pupm, that's about what I'd expect to see for an all-in MSP that wants to run in the black & actually provide quality services (and OP has repeatedly praised the quality of the service). If that $167 pupm includes 365 licensing, that drops the seat cost under $150, which is getting pretty cheap for quality MSP work. Now, all of this is pretty firmly rooted in conjecture, so there's a lot of detail that we (and OP) just don't know. But my advice to OP would be to advise his COO not to burn that bridge when they fire the MSP (it's okay to fire the MSP, but be smart & amicable about it). It's very possible the MSP was overkill for their business needs and OP's existing team will be fine with one or two added to the group. It's also possible that their workload doubles & they start burning out hard or need to add on 3 or 4 people, which suddenly starts to outweigh the $600k to the MSP (remember that employees cost more to a company than just their salary).

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CheezeWheely@reddit

Market rate for most larger cities is (per seat). Bargin basement do the needfuls: $150-$200 Low quality, high turn over msp: $200-$250 Decent MSP: $300-$400 Upper end of quality: $400-$600

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notascrazyasitsounds@reddit

What is pupm? I've never encountered the term before

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Hidden_Terror@reddit

Per user per month

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redditg0nad@reddit

per user per month

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Top_Boysenberry_7784@reddit

To me $600k a year seems a lot until you start counting licensing for AV, email filtering, Cisco smartnet etc. but still seems a little inflated to me. All of the things you mentioned require very little upkeep in many environments. I would hope this price includes some software/hardware updates. My company uses a MSP for router/firewall management and they are asked to help with other items from time to time. Our MSP bills us hourly since we won't agree to an all encompassing contract and hourly gives us flexibility. I spent 4 years managing firewalls before this job but have no intentions of taking over firewall responsibilities here. Being the only one does not make sense to me. Having the MSP manage it is much safer as if something happens to me or I'm on vacation they already know the system. (FYI I have trust issues and do review their configs 2-4 times a year) Keep things like that in mind when planning. It's not ideal to only have one person with knowledge of a system.

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bemenaker@reddit

I did that for 150 users myself for 9 years.

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PMmeyourannualTspend@reddit

Managing all that well does not cost 600k- they were straight up fucking you unless it included the costs of all that equipment, licensing and also all your endpoint devices.

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DoogleAss@reddit

I was wondering this same thing I mean yea 600is crazy if they are just providing things such as mdm , av, etc but if they are contracted to supply hardware too then it may not be Unless we see the contract who the hell knows lol

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popegonzo@reddit

Not to mention that 600k only sounds crazy as a lump annual number. Break it down to monthly & then per user & you get to $250. Still high but like you said, we don't know the market or the industry or even the details like how many servers are being supported.

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bigj4155@reddit

Dog I manage 3 times that for around 100k haha. wtf kinda ride did you guys get taken for by this MSP.

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TechJunkie_NoMoney@reddit

What happens when you need to hire someone?

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tushasubasu@reddit

I'm sorry you have to go through this. Transitioning from one MSP to another. Or even into inhouse is a struggle. I work for an MSP and we see it all the time. But I believe moving MSPs is a good thing for bottomline. I'm surprised they weren't able to workout a deal with you to keep you as a customer

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tushasubasu@reddit

How long were you with this MSP?

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Sam1070@reddit

I mean I run an MSP now but i would think the price would be closer to five to 15k I worked at another MSP and for 500 computers they where charging a client 20k

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JamesCorman@reddit

500 computers at 20k... Tech support based out of India? That's not sustainable pricing

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Sam1070@reddit

Yeah the guy was not a good business owner part of the reason I left

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dodge_this@reddit

We have been going through the process of moving to a different MSP. I would take a hard look at all the licensing and services you are getting from your MSP and see if you can get it cheaper elsewhere. For example I found Trusted Tech Team which offers great pricing vs what our old msp was charging which will save us 100k per year. We used to be a cash cow for our old msp so I'm sure there is a lot of savings you can find too.

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redditinyourdreams@reddit

Holy shit, we have 1k uses 400 devices and we’re only paying a third of that. They really milked you dry

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ah-cho_Cthulhu@reddit

lol. I’ll do it for 5k a month.

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Koyander@reddit

I come from MSP, depending on what customer opts for services, agreement can include Servers, Network, Security, Backups, Windows. From your size, I think your monthly invoice for listed services should not cost more than 16 to $18K monthly, again it’s the sale’s guys job and how customer negotiates, may involve some credits, etc

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darkstar3d@reddit

That could be on the cheap side of things. But with so much information missing, we will never know.

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Relevant-Agency-2409@reddit

Someone who gets it and values their own work enough to justify others' well-paid positions.

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Relevant-Agency-2409@reddit

Feels like a bunch of folks trying to justify their low pay while filling in the blanks on a bunch of details they have no clue of. OP, congrats on dropping the MSP and good luck with building out the team. That said... filling backup, storage, and admins willing and capable of taking care of all that well for true ass-in-chair costs is not likely to illicit massive cost savings, if any. It's not ONLY a matter of "it's only 200 users!" When you hire a capable IT engineer that can architect solutions AND do run support, their ass-in-seat charges probably come out to $200k. Salary, PTO, various health insurances, misc benefits, taxes, 401k, cost to find said person, cost to shelter them in an office, etc. And that's just one and now you've got a SPOF if you only hire one. Probably need another middle level guy to keep things running. Then you need someone to run the ERP cuz no sane SysAdmin is doing both. Then you need a client guy who can maybe be desktop support, help desk, and mobile manager who may or may not be switching out rack gear. Then you need a guy who can properly manage these guys and have a vision for the future. Or you could hire one guy who actually knows ALL of that shit but somehow he's so desperate because of his felonies that he'll take the shit, and we'll, this guy lives of meth anyway so he'll do just fine. But he won't be terribly reliable and he drinks all the Mt Dew out of the vending machine just as you were throwing a fit. Anyway, I'd say the 600k ain't so bad.

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k12pcb@reddit

I own an msp in the US and one in EU and for that footprint you were getting reamed.

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SeptimiusBassianus@reddit

My MSP can do this for less. If not I’ll give you 10k !!!! Ping me

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telaniscorp@reddit

Holy crap 600k that’s like more than my staffing budget for 10 internal IT personnel. Yikes unless you also subscribe some cloud services with them you gotta watch out for those, you might end up still paying them to maintain them.

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Jug5y@reddit

What were they doing for you? That's an insanely high price

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itjoe247@reddit

45 people watching this thread. This one is juicy!! OP we need more details thank you.

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UncomprehendingGun@reddit

You could hire a pretty good team for $600k/year

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cspotme2@reddit

I'll come with 2 guys and do all that for 550k a year.

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pancakes1983@reddit

Wow you’re coming with 2 guys, that’s a party brother

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cspotme2@reddit

I'll make some "educational" videos too

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Phate1989@reddit

WTF 600k for 200 endpoints We would be half of that and still make bank.

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quasides@reddit

seriously, 600k a year for measly 200 enpoints, and you run crap like synology.... and no offense but 2 people can run this if you pay overtime and if at least of of them is very competent. i wonder if the msp manages AD and all the other stuff what exactly are these 2 guys doing. endpoints should require zero effort. it shoudl all be done by automate/orchestrate. its not even complicated or expensive in such a small network

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bbqwatermelon@reddit

Your org was getting Broadcom'd

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QuiteFatty@reddit

Badumtiss

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RealisticHologram@reddit

Shit pay me 600k a year I’ll handle 250 endpoints and support them by myself lol

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QuiteFatty@reddit

Split it I'll help.

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Jsaun906@reddit

For that annual cost they could hire a couple sysadmins, a security analyst, and a few helpdesk guys and just take care of everything in house

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Serious_Equipment102@reddit

Well i manage the following 3 buildings Network (firewalls/switches/AP) Avaya ip office 15 iphones MDM 15 printers 10 servers ERP WMS 50-75 desktop/pC Active Directory Google WorkPlace 50 zebras Mc9300 Sdwan Plus all the ongoing projects I need to switch to become an MSP…. 😂

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abod02@reddit

Seems Broadcom is also in the MSP business.

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Aggravating-Look8451@reddit

![gif](giphy|tnYri4n2Frnig) LOL.

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QuiteFatty@reddit

Crying

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QuiteFatty@reddit

I'd it for half. MSP laughing all the way to the bank

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SmoothRunnings@reddit

Now if everyone can get over the 600k/yr for 250 endpoints and provide this guy with some insight on the separation that would be great! The company I work for as their SysAdmin has had an MSP managing everything for them since 2015, I came in 2022 and have been getting them to finally agree to move everything in house. They have 70 endpoints and are billed close to $80k a year. My experience with them while trying to take control of certain services they are very protective and want to work with you so they still manage your services. You have to be stern when you give them notice of your intent you will no longer need their services after a certain date. Good luck.

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bkb74k3@reddit

It depends on so much. I ran the IT services department for a payment processing company for 5 years. We had (at the height) 250 desk/office users, and about. 450 commission based sales. BUT, we had to be PCI and SOC II compliant. The sales staff were all over the country, including Hawaii, we had 6 office locations. So we were supporting staff from 8am until 10pm.. Just my team was 8 people - VP (me), project manager, systems architect, 2 x system engineers, 1 network engineer, 3 x service desk. Then we had a 4 person infosec team. If this company needs long hour, or 24 hour support, has crazy uptime needs, or they have special compliance needs, $600K might be right. If so though, they will spend this much or more anyway. On the opposite end, now I own an MSP, and we typically only require 2-3 people to support 500+ endpoints across multiple customer systems. Now if this is standard co-managed support, I’d be discounting 200+ users, and if there are no crazy requirements, I’d probably be charging this company something like $200K - $250K (excluding licensing. If I needed someone on-site full time, that would jump to maybe $300K.

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badlybane@reddit

600K My god I'll take half send me a dm.

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confidenceinbullshit@reddit

Same

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drum2drum42@reddit

We're switching over to a new MSP, currently in transition. CFO wanted to cut costs, so he chose a worse company (without consulting us and boss consistently telling him its a bad idea) that is going end up costing us more. Old MSP is pissed at us because we didn't give them 90 day notice that we were terminating our relationship with them. So now they are not providing us any services (since my company doesn't want to pay them) and we are not even close to having the new company ready to go. Gotta love non-tech people making tech decisions

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RCTID1975@reddit

Even half that price point gives you 3-4 highly skilled FTE. Even more depending on location.

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TechieZack@reddit

Don’t put all your eggs in one basket. The model that I’ve implemented numerous times with much success: MSP does day to day support. Consultants or internal do design, architecture, and implementation.

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etoptech@reddit

That seems maybe a little high but Microsoft licensing can quickly be 20-40/user fast and that is low margin and you will still need it. Backups depending on volume can add up fast. I own an MSP so while my initial thought was that seems high after reading some comments it's probably not wildly out of line and likely a good chunk of those costs will continue regardless of if you have an msp or not.

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1TallTXn@reddit

I work on a team of three, managing 120 users with 150 endpoints. Spread across 5 offices in 6 states. I guarantee our combined salaries are less than half what they're charging you.

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StuntedGorilla@reddit

And your licensing and hardware is free is it?

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Happy_Kale888@reddit

600K a year has little meaning with what is included... Kind of like saying I went on vacation and it cost us $20,000. Without knowing how many people went where, how they got there, where they stayed and what they did what does 20K mean?

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x-TheMysticGoose-x@reddit

If you’re getting all your licensing and hardware honestly it’s pretty on the money. Your getting an entire IT department that you can just point a stick at and don’t have to manage

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lenovoguy@reddit

$250/user, I’m guessing they included cost of computer hardware , servers and other items in that 600k, and likely not just the manage cost

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Gold_Bedroom1616@reddit

Where is your business located? Are they only remote or do they do on-site call outs?

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SatiricPilot@reddit

Wild. Wonder what else might be involved? We’d be just over half that for our full service stack with support. Hope that number includes hardware purchasing and things like that. It would make much more sense that way.

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isThisRight--@reddit

Hey, turns out I can do it for $350K per year. That’s a huge savings!

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Interesting-Yellow-4@reddit

Wow you were being robbed blind, and I do mean that literally how did you not see that

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megasxl264@reddit

Two of you can’t handle that many users?

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iBeJoshhh@reddit

It sounds like they did everything besides help desk, do your 2 people even have the skills to take over that much? Take half the funds and hire 3-4 new people.

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Justepic1@reddit

One of the reason you go with an MSP is so you don’t have to hire 5 people at 120k a year. For 600k we will add you to our 24/7 soc with rapid7/S1/avanan.

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mspencerl87@reddit

Lol my last manufacturing job. 4 sites 1500 devices 2k end users 1 IT man 🤣

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jackoftradesnh@reddit

I’ll do it full time, just you as my client - huge discount. $400k a year. Trust me. You won’t regret it.

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3tek@reddit

I'm in the same situation now. I've found other MSP's that are cheaper than our current one. We're a nonprofit so every dollar counts. Still fighting that up hill battle.

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daryltuba@reddit

My favorite thing is when you bring everything in-house from your MSP and then you get laid off so they can outsource it all to another MSP.

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Alex_2259@reddit

I will do it for 500k/year lol wtf

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pseudo-c@reddit

Your in luck my friend, I will do this service for you for 599 👌

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mattyparanoid@reddit

I am not in the sales side of the MSP I work for but $600,000 per year for that number of users sounds outrageous compared to some of our clients at that size.

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keithITNoob@reddit

Did the 600k a year include all licensing and vendor support? If the MSP was on charging the costs of any Oracle products or Cisco /Palo Alto/VMware support, 600k can get chewed up quickly depending on the amount of hardware you have out there

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Fast_Cloud_4711@reddit

You'll want to look at NaaS as an option then I guess.

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UniqueArugula@reddit

So many completely misinformed absolute morons in here that can’t see past a large number and have probably never managed a budget or seen how much things cost in their life. Just because you’re getting paid $70k to manage 12000 endpoints on your own doesn’t mean this is an expensive amount. Licensing is not free. Hardware is not free. 24/7 support is not free.

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GMon2000@reddit

Wow.. $600k??? You could have hired 4-6 fulltime IT professionals and still spent less. Good grief who made that decision? To contract an MSP? LMAO

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UniqueArugula@reddit

So many completely misinformed absolute morons in here that can’t see past a large number and have probably never managed a budget or seen how much things cost in their life. Just because you’re getting paid $70k to manage 12000 endpoints on your own doesn’t mean this is an expensive amount. Licensing is not free. Hardware is not free. 24/7 support is not free.

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Spagman_Aus@reddit

Man I would love to see the business case that convinced the CEO that this MSP was good value. We’re 150 endpoints, 220 users (lots of part time & casual staff that don’t get their own device), 4 servers and we pay around $110K per year.

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djgizmo@reddit

Before I weigh in… - How many tickets in a 30 days? - How many projects did this 600k cover? - did this 600k include hardware or other services like voip, or licensing for m365? - did the MSP have any full time on site techs

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bgarlock@reddit

Wow, that's a lot of coin for the size of your environment. That's 5 FTE's with a decent salary.

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thegreatcerebral@reddit

Holy shit! I was making $80K as an it manager with three employees for a site twice your size and we did everything; nothing external except for large scale projects we would hire a team for heavy lifting. …and a cable vendor who had the ability to pull permits if needed for low voltage cabling. I wish we would have known an electrician that did the same but oh well. I hate MSPs. With that being said. If MS licensing was 365 then that number may have been fairly accurate given about 20% uptick licensing-wise. Looking at the list of what you were getting and having just priced out things. That’s not that bad.

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megafukka@reddit

I don't suppose you guys are in Atlantic Canada haha, my dumbass boss doubled the cost of his MSP and drove away half the customers, then laid half of us off (myself included) and the remainders have to do way more work across multiple tiers

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mrbionicgiraffe@reddit

Wait, so he doubled his revenue, then lost half of that by losing half this clientele, bringing his revenue back to the original amount, but was able to reduce half his workforce? Sounds to me like he significantly increase his net profit while reducing complexity and risk.

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megafukka@reddit

Most of the remaining clients are planning on leaving and were phasing our services out towards the end as well. I can't say who the clients were obviously but there was 3 very big customers that drive ticket generation more than any others that have been hiring in-house IT and making us go through them at the end

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Barrerayy@reddit

Lmao you got scammed basically

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littlepriest01@reddit

Here I am one of three people managing ~800 endpoints

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Bio_Hazardous@reddit

WTF our MSP charges $100/user/mo and our MS licensing goes through them and I think it's going to cost us something like 100K for 50 users. 600K is actual insanity pricing, they better provide under the desk jobs too at that point.

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Llew19@reddit

Christ, I'll do it for $400k!

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ORA2J@reddit

600K$ MY GOD.

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buenology@reddit

Where are you based out of? We are an MSP in NY State, we currently service the Mid-Hudson Valley.

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Narabug@reddit

Is anyone validating that they’re doing all that work, or is that what they’ve **said** they’re doing on paper? Almost a decade ago I was on a team of 4 SysAdmins that covered basically everything MacOS/Windows client for ~30,000 users. Some jackass executive decided we were understaffed, and outsourced our work to an MSP as part of a help desk transition. In 2 years, our team had grown to 8 full-time employees, and my job had transitioned from doing the things to teaching MSP “experts” how to do the things, letting them fail, re-teaching them, repeat. If they failed 3x, I was then allowed to “teach” them by doing the work myself. My workload grew massively, as I was now required to both do the work and train the people we were paying to do the work. In top of that, we frequently found that they were breaking things they had no business touching, or assuring us that they had done the needful on things like backups or upgrades, only to find out they had done nothing. After 3 years, the executive went to another MSP, rinse repeat, exact same problems. Come to find out, in both examples, the MSPs were extremely talented at writing contracts that read as if they would perform a service, but granted them no obligation to actually perform those services.

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Sllim126@reddit

I own my own MSP and as everyone said, that pricing is ridiculous. If leaderships still wants to keep a third party, feel free to reach out. I would feel comfortable making something that is reasonable and cost effective. I can also make myself available as a 1099 contractor and help/provide support as well :)

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kiddj1@reddit

Bro I used to look after a bigger footprint with 2 people... You was getting robbed bliiiiiiiind

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Doublestack00@reddit

That is insane. We have 6200 employees and handle it what 4 full time and 1 intern.

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mrXmuzzz@reddit

Crying in UK MSP price, yet our clients still moans

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JerryRiceOfOhio2@reddit

I'll do it for $540k, 10% less than your current MSP

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sonyturbo@reddit

FWIW We are a US based MSP / MSSP with US citizens overseas to get to 24 x 7. We charge $200 to $250 for full outsourcing depending on the security package. For larger firms it can make finacial sense to take 9 to 5 M to F helpdesk in house and outsoruce after hours and sercurity only.

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eagle6705@reddit

I really want to see how that is broken down, if its 600k for licensing, support contracts, endpoiing protection, cybersec, emails...and even equipment Maybe

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jmeador42@reddit

Somebody took y'all out behind the woodshed.

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profmathers@reddit

I manage 2100 endpoints any my entire team doesn’t cost half that

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bpusef@reddit

Just curious what’s included in the $3k per user annual fee. Does that have licensing and full support included?

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topojo9531@reddit

I would bend over backwards for an account that size! Can you offer some details as to what was in your service agreement besides the 250 endpoints?

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vrtigo1@reddit

$600k is an insane # for that scope Why are you against having a 3rd party partner for emergency assistance? This is not only a good, it's important in case something happens to you or someone on your team.

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lordjedi@reddit

> I’m hoping to be able to come to them and change their mind. Why would you want to change their mind? Having a third party as an emergency is a good thing. It's either that or they need to hire more people so they can have a rotating on call.

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DesertDouche@reddit

Had an MSP on board when I was hired. I looked at the work they were actually doing compared to the contract price of $120k a year. I laughed and immediately informed them we will not be renewing the contract in 8 months. Odd thing is, they never flinched. Never asked why, never asked what they can do to keep our business. They just didn't GAF, not that it would have mattered. Good riddance.

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1greadshirt@reddit

I'm actually kind of glad I subbed to this reddit two days ago. I see there's a lot to learn here as I've just started with my current MSP 2 years ago.

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bmfrade@reddit

You got robbed and you’re feeling sorry for them?

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Jaidon24@reddit

They were definitely robbing you.

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mr_gitops@reddit

lol 600k/yr you can get super-sized dedicated IT department for the scale your org is... 2-3 sys admins/engineers and 4-5 helpdesk. The MSP doesn't even do anything complex from the things you listed. oh man you guys got played nicely. MSPS are supposed to be cheaper than hiring a team not MORE.

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DefJeff702@reddit

Some quick math and my MSP would be closer to 480K all in annual for 200 users and 250 endpoints plus servers. When you're bundling licensing for M365 (can be pretty dang expensive for E5) then webfilter, Email filter, Cyber Security training, MDM, EDR/MDR/XDR (also add up quick), we include network hardware to accomodate the contracted userbase). Don't forget to account for the labor to manage these systems and end user support. There are other MSP platforms behind the scenes that clients don't generally see or account for. Like AutoElevate, Documentation, Ticketing/PSA, Client portal, RMM, Documentation platform and other tools. If you move away from the MSP but want to be able to call them in an emergency, you should make your intentions clear. A non-contract (especially one who has no intention of re-contracting) is going to be a pretty low priority when the ticket comes in.

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WMSysAdmin@reddit

Company Hired me on to manage the in house and help day to day. We moved from full managed to co managed MSP that will actually work with me. Its also nice to have support should I want to go on vacation or have to do a large project that a couple extra hands would help with.

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pistolpete9669@reddit

That MSP is with the mob

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pertexted@reddit

Congrats. That's a lot of money to renegotiate.

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DeliveryRemarkable@reddit

welcome to the age of TSDs.. 600k a month to have the whole account dedicated to some kid in the noc who has no idea and just likes computers..

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ExcellentPlace4608@reddit

600k?! And co-managed? That was one hell of a salesmen. You should have been paying less than 1/4 of that for fully managed.

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breenisgreen@reddit

See if your board actually wants a third party or if they want a security service. Managed SOC / vCISO services are more useful.  I've done this a number of times and am going through it currently. It's a fairly easy thing to do bringing in house and usually easy to justify as being more cost effective for the business. The key is seeing if the business wants to treat you like best buy or if they're willing to make you part of the process and actually let the IT department lead and consult to find the right solution for the business. If they just want IT to be a facilitator, leave, find another job and tell them to get an MSP. If they actually want a business partner, making the case for going in house makes much more sense

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techw1z@reddit

wait what. did you forget endpoint, patch/vuln management and user support? or did you actually pay 600k for those few thingies you mentioned? my most expensive offering is 150€ per endpoint and includes almost everything you or your insurance company could ever dream of.

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billiarddaddy@reddit

Y'all were paying for their vacations and the light bill.

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Puzzled-Hedgehog346@reddit

Funny this topic reminds me it company that couldn't keep track own hardware removed wrong switch from racks cause camera to go down also caused network loop all touch switch didn't even belong to them in rack and jion network in one loop had stp disabled cause figure it out hanged acess point with cable exposed as bright blue down wall on expensive auruba aps put ap eight beside each other also use keylog to get passwords other vendors hardware oh didn't secure rack fell off wall plug a cheap ups network jack think it had snmp card it didn't was just surge for rj45 same company said dvr win based was inject dhcp network it couldn't What happens port go down they fix disabled stp Lol it did end get built out on own network internet because it company could keep they network stable I doubt end point count that place was more 200 end point they still employed to last I checked

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axisblasts@reddit

Man... 600k? Does that include your cloud storage and hardware? I don't know system requirements and storage size. But for that much you could hire and do much better. Hire a few azure guys and a desktop/help desk person and move to the cloud for 250 users. Have a small onprem cluster and away you go.

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obosughe@reddit

I don't know about any of you but am sending this to my boss with a pay rise request!

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thatwolf89@reddit

Damn your MSP wasn't pulling. Only fuck

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itworkaccount_new@reddit

How is the charge broken out on the invoice? I doubt you are being charged per user. Likely per device and I'm guessing you have a lot of equipment or virtual machines you are not thinking about. That's 50k a month. At the MSP I just left we had several customers paying that or more a month. Not all with more than 200 users. It's definitely possible they were ripping you off. It's just as possible that your environment is a lot bigger and more complex than you think.

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brandonw00@reddit

Wow y’all were getting fleeced. We’re a two person team managing like 175 end users, our networking equipment, all our VMs and backups, etc. Man if that’s worth $600K a year I’m vastly underpaid.

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RaNdomMSPPro@reddit

That 600k /yr. number sorta tracks (a bit on the low side really), if in addition to full MSP services, you are also leasing hardware, including servers, networking, MS365/SPLA licenses, and end user pc's from the MSP.

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I-Like-IT-Stuff@reddit

Who the hell decided to pay 600k a year for only those services that basically run themselves once setup?

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bottleofmtdew@reddit (OP)

Price increase recently, they were set up couple years before I took over, and I’m decently new to IT management, so tried to avoid any big/major changes within my first year or two.

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Worth_Jackfruit_4568@reddit

I'll be the remote sysadmin for 125K. Hire another local guy and we're good to go.

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Art_Vand_Throw001@reddit

600k for 200 users m. I’ve got a magical unicorn to sell your company OP.

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jupit3rle0@reddit

Back before the pandemic my MSP supported a 100+ endpoint client for $120k/yr. I think you're getting ripped off but I suppose it depends on regional aspects.

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-Enders@reddit

600k is fuckin wild. We have more users and devices and pay 1/10th of that

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ChiefPykie@reddit

Other people already hit on thoughts on the 600k so instead I'll give my advice, I do work for an MSP, so I have a bias, but I'll try to avoid it. If you boil everything down my advice will be to identify workload, examine accurate costs for multiple scenarios, get quotes. If you have a copy of the quote/contract I'd compare that to the services you added in your edit to make sure you are tracking on everything. I would make sure you are aware of all the work you've been expecting them to do. Depending on the MSP, you should be able to request information about tickets / work done. Find out exactly how much workload either you, or an MSP will be needing to take on. From there determine what the actual budget you have is. I'd also look at considering the costs if you do it internal vs. leave it with an MSP. How many staff, what licensing, etc. There are honestly arguments for either internal or MSP that are equally strong depending on your needs. Even if you aren't going to go fully with an MSP ask a few to give you a quote. Even better since you will likely be doing some sort of co-managed as you stated. Also, consider if you want to be managing a team, or a relationship with an MSP. They are very different actions. As an MSP we've taken on clients that had a previous MSP and the most successful transitions were from teams that took the time to dig in and understand what they really needed, and worked with us to determine the state their environment is really in. It is 100% in your interest to know what you REALLY need.

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mdervin@reddit

OMG, that's $2,400 per endpoint per year and that's not including your two in-house people. I hope to God somebody was getting kickbacks from the MSP, because the alternative is much worse. Not knowing the details of your business, but what does it mean to have a 3rd party in case of an emergency? Are you talking about a 24x7 "reset my password" type service or are you talking about "Oh this isn't working and google isn't helping, let's call somebody..." If it's the latter, then just get really good support contracts with the vendor and have an on-call with your team. Because letting another MSP in is like inviting a new fox into the henhouse. It's probably in your best interest to hire a Sr. SysAdmin or a Hands-On manager, because your environment doesn't sound that complex. I mean you can replace your network/firewall/wifi with Meraki. You can go to MS directly or through a reseller like intermedia for office 365. (for example at my previous job our yearly budget was 400K and that included salaries and in NYC).

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CheesecakeFun6740@reddit

We will give you a very fair bid Greg@sccomputers.com Thank you

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bad_brown@reddit

What, exactly, is the in-house staff doing? Do you have business requirements that disallow any down time? How much does an hour outage cost the business? I can't imagine they looked at $2,400/endpoint/mo and thought it was reasonable unless the MSP was giving them 24/7 support and some crazy guarantees in some highly-regulated vertical.

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dbh2@reddit

Is 600k a year not a month

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bad_brown@reddit

Phew. That's more like $200/endpoint. That's pretty normal in MSP-land in 2024 for full service including helpdesk support. Probably high if they aren't doing any end user support. I wonder if they did any compliance work (to include endpoint configuration, identity protections, M365 monitoring, etc.)

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TyberWhite@reddit

This is absolutely wild! I manage a larger organization, including complex robotics, for a fraction of that cost. You’re being fleeced.

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Suaveman01@reddit

Whoever hired this MSP needs to be fired, paying 600k for 200 users is daylight robbery

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Chewychews420@reddit

Wtf! 600k! I handle everything they did, same size business we have an MSP also and they charge us 12k a year for 2nd line support.

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kagato87@reddit

What else is included in that $200/endpoint/month figure? It's a lot if it's just maintenance and support. But at that price there should have been other things as part of the package. This price is NOT out of line with many MSP offerings. At least from the better ones. You're also at the size where an MSP is a questionable value for non-project work. Make sure you account for non-support items on their way out. E5 and some endpoint protection alone can rack up half that easily. Add in a BCDR and you'll only be saving a little bit, while losing access to their project team. Make sure your people don't slack on the preventative maintenance. I spent a while at a good msp and we did a lot behind the scenes to prevent issues. (The old saying "an ounce of prevention" applies here.)

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CeC-P@reddit

Every time I've seen a company do it, the hours and setup costs to move to the new one costs about 3 years worth of licensing and it's always glitchier and quirkier to move the data over than you think.

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PolicyArtistic8545@reddit

Honestly just start buying technology yourself. Maybe pay some consultants to get you initially setup and then have them leave while you run the day to day.

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Secure_Note7373@reddit

There is very little detail here. You need to provide a breakdown of the 600k per year or 50K per month.

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PMmeyourannualTspend@reddit

That pricing seems insane unless that included all software, hardware and services. Assuming it didn't for way less than 600k you can hire a 3rd IT person, outsource security to a managed soc. Hire specialized people as needed to setup a network, upgrade or setup a cluster, etc and still come out way ahead.

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