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A landlubber’s guide to hourly billing vs. MSPs: pros and cons

by | Jan 31, 2024 | All, Blogs, case studies, IT budget,business insights,case studies | 0 comments

James’ business needs IT support.

Last week, the company had network issues…again. He wasn’t able to print from his computer or scan documents that he really needed — and it cost him a lead.

He has held off until now because IT support can be expensive. But, as he is realizing…so is the fallout of these outages!

And don’t even get him started about the frustration tech issues cause his employees!

There are several forms of tech help that James is considering, but he’s leaning toward outsourcing with a managed IT service provider (MSP), or buying some block time hours for support. IT hourly rates seem like the cheapest option, and they are popular with many small businesses.

But which is the best choice for his company?

What are IT hourly rates (block time)?

We’ve talked before about the pros and cons of different IT support models like internal IT and MSPs. But since block time is an appealing, low-cost option for many companies, let’s spend some time analyzing the pros and cons.

With block time, a business pays for a set number of monthly service hours. It is a “pay-as-you-go,” “fix-as-it-breaks” model of IT support.

Options, ahoy!

Let’s look at IT hourly rates vs. managed IT in a slightly unconventional way… that will require a little suspension of reality:

shipwreck surrounded by sea waves on beach

Pretend that James is the captain of a ship instead of the owner of a small business.

Instead of network connectivity issues or malware attacks, his ship hit a rock or was blasted with a cannonball…pick your disaster scenario.

Whatever happened, it’s caused trouble that needs to be resolved…quickly! James needs someone to patch the hole in the hull while he and his crew deal with passengers and attend to all the other ship functions.

If James uses an IT hourly rate of service model to take care of the problem…

James has hired a highly skilled ship tech to come to his boat for a couple hours every month (remember, suspension of reality…just go with it!).

It takes the tech a little while for their tugboat to get there, but they work valiantly to repair the damage. They patch up the hole and keep the ship from sinking.

Why hourly billing would be good for Captain James and his cyber-ship:

  • Minimal commitment: Maybe James isn’t sure yet what level of service he needs.
  • Trust building: James has time to build a relationship with the hourly tech before committing to a contract.
  • Freedom to focus: James’ in-house tech crew can focus on the bigger projects while the outsourced IT handles the hiccups.
  • Extra eyes on deck: An hourly tech can serve as another set of eyes onsite to identify and handle issues

However, hourly billing is a “use-it-or-lose-it” arrangement. James might end up having too much or too little time to address all the tech issues — unless he pays overages.

If James uses an MSP service model…

In the MSP scenario, we have to back up to the days before the rock (or cannonball) incident.

James hired an MSP a couple of months ago, and they’ve been assessing his nautical needs. The MSP uses radar and sonar to alert him to rocks or ransomware pirates ahead in the distance…so he can avoid that route!

Through an evaluation of inventory, they noticed that the ship’s navigational system was outdated. So James and the MSP made a budget-conscious upgrade to avoid future navigational problems.

James’ ship never hit the rock or encountered the cannonball because his MSP was scanning the horizon for threats and addressing them proactively.

Why an MSP would be good for Captain James

  • Constant support with no overages
  • Updated infrastructure keeps him from having to deal with inefficient or broken equipment
  • An outsourced team of IT professionals are dedicated to making sure James’ technology is able to meet his goals

However, MSPs are more expensive and more of a commitment than IT hourly rates.

Aye, aye IT!

Hourly billing and MSPs are two different schools of IT thought, and Varay has clients that fall into both camps.

Which model is better for James?

 It depends on his goals and on his ship business!

On one hand, MSPs aim to prevent a lot of problems before they happen. But they are pricier and require a relationship to be built on trust.

On the other hand, IT hourly rates are less expensive and are less of a long-term commitment. But IT help by the hour probably won’t get to the bottom of root issues.

Reactive Hourly Billing vs. Managed IT

The difference between IT hourly rate service and an MSP is essentially break/fix vs. proactive prevention.

For Varay’s client Fox Auto, outages and downtime proved to be more costly than the money they were trying to save with quick fixes. For years, they made do with outdated equipment and frustrating, unreliable technology because of the cost of hiring an MSP. Instead of addressing the root issue (their equipment needed an upgrade), they used low-cost patches — so that their IT would just function.

Eventually, a massive internet outage cost them a lot of income. They were ready for long-term solutions instead of bandaids — and hiring an MSP eliminated downtime and led to expansion in their business.

For Fox Auto, the choice was clear! But every business is different.

The pros of being reactive?

At Varay Managed IT, we are believers in proactive service.

But when might an IT hourly rate model be the right fit for your business?

  • if you just need quick, superficial fixes for your IT
  • if your business doesn’t rely heavily on its IT to function
  • if you want the lowest-cost option without worrying about long-term solutions
  • if you want very straight-forward, easy-to-understand billing (by the hour)

If this sounds like your business, Varay Managed IT can work with you to meet your tech support needs with hourly rate service.

However, if you have frequent IT headaches and want to get to the root of the problems, Varay can help your business get in shipshape through managed IT.leading ship

Are you wondering whether hourly rates or managed IT is best for your business? Contact Varay for a free assessment — and we’ll help you get the level of support you need!



Written by

Amanda at Varay


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