Outsourced IT Services: What They Include, What They Cost and How to Choose a Provider
Outsourced IT means paying an outside firm to handle some or all of your technology instead of hiring for it. For a business of five to two hundred people it is now the normal arrangement, because the work has become too broad for one person: help desk, patching, security monitoring, backups, Microsoft 365 administration, compliance paperwork, projects and planning. This guide explains the ways outsourcing is delivered, what a good plan includes, what it costs compared with hiring, when keeping IT in-house is the better choice, and how to tell a good provider from a cheap one. We have been on the provider side of this in Minneapolis since 2000, so where we have an opinion we say so.
The four ways outsourced IT is delivered
| Model | How it works | Best for |
|---|---|---|
| Fully managed (managed services) | Flat monthly fee covers monitoring, maintenance, security, help desk and support for every computer, server and user on the plan | Businesses with no internal IT staff, roughly 5 to 150 people |
| Co-managed IT | You keep an internal IT person or team; the provider adds tools, security, after-hours coverage, projects and escalation | Businesses of about 50 to 300 with one or two IT staff who are stretched |
| Staff augmentation | Contract engineers work under your management, by the hour or the month, without a service commitment | Organisations with an IT department that needs extra hands for a defined period |
| Break-fix and projects | Hourly or fixed-price work when something breaks or a project comes up; no ongoing responsibility | Very small offices with little dependence on technology, or one-off projects alongside another arrangement |
Most of this article is about the first two, because that is where the value and the decisions are. The difference between proactive and reactive support is worth reading if you are currently paying by the hour.
What a managed plan should include
The word “managed” does a lot of work in this industry, and plans vary more than their prices suggest. A plan we would put our own name on includes all of the following; treat anything missing as a question for the provider.
- Help desk by phone, email and portal, with published hours, an after-hours path and an engineer, not a call centre, on the other end. Remote support resolves most issues; onsite visits are included or clearly priced.
- Monitoring and maintenance of every computer and server: patching of Windows, macOS and common applications, disk and hardware health, and alerts that someone actually acts on.
- Security: endpoint detection and response on every computer and server, 24/7 managed detection behind it, email filtering, multi-factor authentication everywhere, and a firewall that is kept current. Our endpoint security guide explains the stack we use.
- Backups that are tested, for servers and for Microsoft 365, with a written recovery plan. How do I know if my backups are good is the question to ask.
- Microsoft 365 administration: users, licences, mailboxes, sharing, security settings, and onboarding and offboarding done the same day.
- Documentation and planning: a current inventory, a hardware replacement schedule, a budget for next year and a quarterly review with someone senior.
- Vendor management: the provider deals with the internet carrier, the phone vendor and the software company so you do not have to.
- Compliance support where you need it: HIPAA, PCI DSS, CMMC, cyber-insurance questionnaires, and a SOC 2 report from the provider itself.
What it costs, and what it replaces
Industry surveys put fully managed plans at $100 to $250 per user per month, or $75 to $200 per device, with security and compliance needs pushing toward the top of the range. Our own per-device rates and three worked examples are on the managed IT services cost page, which also explains the common pricing models. Hourly work runs $125 to $200 an hour and is cheap only in a month when nothing breaks.
The comparison most owners actually make is with hiring. A systems administrator in the Twin Cities costs in the region of $95,000 to $110,000 a year in salary, plus benefits, tools, training and the fact that one person is unavailable for vacation, illness and every hour after five. For a 25-person business a managed plan typically costs a third to a half of that and brings a team with a help desk, a security operation and a project bench. The arithmetic changes at scale: somewhere past 150 to 200 users, an internal IT lead with a co-managed provider behind them is usually the better structure, and past several hundred, a department.
When in-house is the better choice
Outsourcing is not always right, and a provider that says otherwise is selling. Keep or build internal IT when technology is the product, as in a software company that runs its own platform; when you need someone physically present all day at a plant, a hospital or a school; when your environment is unusual enough that a generalist help desk would be learning on your time; or when you are large enough for the arithmetic above to flip. In each of those cases the right outside arrangement is co-managed IT or staff augmentation, not a fully managed plan. For a software firm in particular, see our page on IT support for software development companies.
How to choose a provider
- Ask for the audit. A provider that holds administrative access to your systems should be able to show a current SOC 2 report from an independent auditor. Ours is audited every year; the SOC 2 page explains what that covers. Many providers have never been audited.
- Get the response commitments in writing, with the after-hours process and who answers the phone. Then call the support line before you sign and see what happens.
- Look at the security stack, item by item. Endpoint detection on every device, 24/7 managed response, MFA enforced, backups tested, firewall subscriptions current. “We do security” is not an answer.
- Insist on transparent pricing: what is per device, what is per user, what is a project, and what is not covered. Our pricing calculator exists so that nobody has to sit through a sales call to get a number.
- Check the contract length and exit terms. Month to month with documented handover is a sign of confidence. Three-year terms with auto-renewal are a sign of something else.
- Talk to references in your industry and ask what went wrong and how it was handled, not whether they are happy.
- Read the onboarding plan. The first six weeks decide the relationship. Our What to Expect page describes ours week by week.
Two more of our articles go deeper on this: how to choose the right business IT support provider and what to look for in a managed services provider.
Switching from a provider that is not working
Businesses usually call us because response times slipped, the same problems keep coming back, or a security incident revealed that the “managed” plan did not manage much. Switching is less disruptive than most owners fear: the new provider collects documentation and credentials, installs its own agents alongside the old ones, verifies backups and access, and takes over on an agreed day. Our switch my IT provider page covers the mechanics, including how to handle a provider that is reluctant to hand over passwords.
Outsourced IT in Minneapolis
OAC Technology has provided outsourced and managed IT services to businesses across Minneapolis, St. Paul and the surrounding suburbs since 2000: accounting and law firms, manufacturers, contractors, clinics, nonprofits and software companies. Being local matters more than it sounds; an engineer who can be at your office in half an hour changes what “onsite support” means. Every client plan includes the items listed above, the rates are published, and there is no long-term contract.
Free tools from OAC Technology
- Managed services pricing calculator: a monthly figure for managed IT, in about a minute
- How much managed IT services cost: our published per-device rates and three worked examples
- What to expect as a client: how onboarding works, week by week
Common questions
What is the difference between outsourced IT and managed services?
Outsourced IT is the broad term for having an outside firm handle some or all of your technology. Managed services is the most common way of doing it: a flat monthly fee for monitoring, maintenance, security and support of everything on the plan. Outsourced IT can also mean hourly break-fix work, project work or contract staff.
How much do outsourced IT services cost?
Fully managed plans for small and mid-sized businesses typically run $100 to $250 per user per month, or $75 to $200 per device, depending on what is included. Our per-device rates are published on the pricing page. Hourly break-fix work is usually $125 to $200 an hour with no monthly fee.
Can we keep our internal IT person and still outsource?
Yes. That arrangement is called co-managed IT. Your person keeps the day-to-day and the local knowledge; the provider supplies the monitoring tools, the security stack, after-hours coverage, projects and a second opinion. It is often the best fit between about 50 and 200 employees.
What happens when something breaks at 2 a.m.?
With a managed plan, monitoring usually catches the failure before anyone is in the office, and the on-call engineer starts on it. Ask any provider you are considering what the after-hours process actually is, who answers, and what it costs. If the answer is a voicemail, that is the answer.
How long does switching providers take?
Onboarding a business of 20 to 50 people takes about four to six weeks from the signed agreement: documentation, installing the management and security agents, reviewing backups and access, then a normal month. Our What to Expect page walks through it week by week.
Do we lose control of our systems?
You should not. Administrative credentials, domain names, licences and documentation belong to you and should be provided to you in writing. A provider that keeps the passwords is a provider that is hard to leave, which is the point. Ask for the exit terms before you sign.
Talk to us
If you are comparing outsourced IT providers, or weighing one against hiring, we will look at what you have and give you a flat monthly price and a written scope to compare. Call 952-548-5558 or contact us; the first conversation is free and there is no long-term contract.
