Running your own IT support business is exciting — but figuring out how to grow it can feel overwhelming, and choosing the right pricing model can make you feel like Goldilocks.
Pick the wrong one, and it could leave your business stretched too thin or struggling to turn a profit. But pick the right strategy, and you can boost efficiency, build trust with clients, and create predictable revenue streams that fuel long-term growth.
So, what does that mean? Which pricing strategy is the one that’s “just right” for your business?
In this article, we’ll walk you through eight common MSP pricing models — including the pros and cons of each — so you can find the one that aligns with your business goals. Whether you’re looking to maximize profitability, offer simple pricing to clients, or scale efficiently, this blog will help you make an informed choice and build a sustainable, thriving MSP.
6 popular MSP pricing models
Before we dive in, it’s important to note that many MSPs smartly blend multiple pricing models to create flexible offerings that meet different client needs. A well-designed pricing strategy often combines various models for different services, devices, or user types.
For instance, you might charge a per-device fee to manage workstations and servers while using per-user pricing for subscription services like Microsoft 365. Many MSPs also layer in tiered pricing, offering packages like “basic,” “advanced,” and “premium” that cater to different budgets and service needs.
This mix-and-match approach allows MSPs to offer competitive, scalable options while ensuring clients only pay for what they need. With this in mind, let’s explore the eight common MSP pricing models and how they can be customized to fit your business goals.
Per-device
The per-device pricing model charges customers a fixed fee for each device managed, such as PCs, servers, mobile devices, or network appliances. It’s one of the simplest models to implement, offering clear, predictable pricing that is easy for clients to understand.
How It Works
MSPs assign a set price per device type (e.g., workstations, mobile devices, or servers). Pricing scales linearly based on the number of devices under management, with potential discounts for larger quantities. In some cases, MSPs may add per-site fees to cover the complexity of managing multiple physical locations.
Challenges
One of the main limitations of this model is that not all devices require the same level of support. For example, managing a VMware server can be far more demanding than maintaining several Windows workstations. To address this, some MSPs segment pricing into device categories, such as:
- Per-server
- Per-workstation
- Per-network device
This segmentation ensures a fairer reflection of the time and resources needed to support each device type.
Additionally, per-device pricing typically includes a multiplier to cover the average cost of supporting a device, factoring in labor and overhead.
Pros & Cons
Pros
- Easy to implement and communicate to clients
- Predictable revenue based on the number of devices managed
Cons:
- Fails to account for device complexity or price differences (e.g., servers vs. workstations)
- May require adjustments as clients scale or change device types
- May not take other per-user costs (such as M365) into account
Is it for me?
The per-device model works best for MSPs managing small-to-mid-sized clients. However, it may need to be supplemented with custom pricing for more complex systems to ensure greater profitability.
Per-end-user
This model charges a fixed rate for each end-user (i.e., each client employee), regardless of the number or type of devices they use. It simplifies pricing by focusing on the number of users supported, abstracting away the complexity associated with managing various endpoints. Like per-device pricing, per-end-user models may offer volume discounts as the user count increases.
How It Works
With per-end-user pricing, you bill based on the total number of client employees supported, whether they use one or multiple devices. This model is popular because it provides predictable costs for both you and your clients and simplifies contract management.
Challenges
Inconsistent user needs can present challenges here. For example, an office with 100 end users on desktops at a single site requires far less support than a distributed workforce with 100 end users, each using multiple devices. These variations in support intensity can make it difficult to standardize per-employee pricing across different clients.
To mitigate this, you might want to set service-level tiers (e.g., basic vs. premium user plans) or offer bundled services per end user, such as Microsoft 365 licenses plus device management.
Pros & Cons
Pros:
- Simple and easy for clients to understand
- Reduces the complexity of tracking individual devices
- Predictable revenue with clear user-based metrics
Cons:
- Support requirements can vary significantly among users
- Requires careful monitoring to avoid over-committing resources for high-growth clients
Is it for me?
This pricing option is ideal for service-based businesses with remote or hybrid workforces, where employees may work across multiple devices. As mentioned above, you can also customize plans by adding tiered service levels to better manage clients with varying support needs.
Value-based (fixed-rate subscription)
The value-based pricing model charges customers a fixed rate for a bundle of services without tying the cost to a per-user or per-device formula. Instead of focusing on the number of devices or users, the MSP sets prices based on what the client values most and their specific needs or pain points. This allows for greater pricing flexibility and the potential for higher profits by delivering tailored solutions that resonate with individual customers.
How It Works
If you decide to follow this strategy, contracts are customized, and prices may vary across clients depending on the services they need most. For example, one client may value cybersecurity services above all else, while another might focus on remote monitoring and proactive maintenance. It’s common for MSPs who are using this model to negotiate rates and adjust their offerings to match the client’s budget and business priorities.
Pros and Cons
Pros:
- Can maximize profits by focusing on the value delivered rather than the cost
- Tailored offerings allow for greater flexibility in meeting client needs
Cons:
- Requires strong sales and negotiation skills
- Can be complex to manage, with different prices and services for each client
- Often requires client education to communicate the value of the offering clearly
Is it for me?
This model works well for MSPs with experience negotiating contracts who feel comfortable setting prices that reflect the client’s specific needs. When done right, value-based pricing helps build stronger client relationships and delivers long-term profitability.
Monitoring-only
As the name suggests, this pricing option charges clients for the monitoring of IT infrastructure or devices without including remediation services. Typically, fees are based on the number of assets monitored, but some MSPs might also use user-based or location-based pricing. This model serves as a low-cost entry point that can generate additional business opportunities over time.
How It Works
MSPs using this model focus solely on monitoring client systems — such as networks, servers, or endpoints — and notifying clients (often their in-house IT teams) of any detected issues.
Although you don’t provide immediate solutions within the scope of the agreement, this ongoing relationship helps build trust. Over time, you may be positioned to take over problem-solving tasks, resulting in break-fix contracts or billable on-site services.
Pros and Cons
Pros:
- Affordable entry-level offering for clients, lowering barriers to partnership and engagement
- Provides upsell opportunities to break-fix services, project-based work, or full-service contracts
- Builds relationships with in-house IT teams, increasing the chance of long-term business
Cons:
- Limited to monitoring-only contracts — no built-in remediation or management services
- Requires clear communication with clients to avoid misunderstandings about service scope
- Doesn’t work well with per-endpoint pricing models
Is it for me?
This model is ideal for new MSPs looking to establish relationships and demonstrate value without overcommitting. By monitoring assets effectively, MSPs position themselves as reliable partners, potentially leading to more comprehensive service contracts down the road.
All-you-can-eat
The all-you-can-eat (AYCE) pricing model works just like an AYCE food buffet: the customer gets charged a flat fee for access to the whole shebang (the “shebang” in this scenario, of course, meaning your full range of IT services).
This model offers simplicity and predictability for both clients and MSPs. From the client’s perspective, this model ensures consistent, easy-to-manage billing — no surprise fees or fluctuating costs. And for you, AYCE pricing streamlines sales, billing, and administration, minimizing the complexity of managing multiple service tiers or individual service charges.
How It Works
In this model, clients pay a fixed rate each month for comprehensive coverage, which could include monitoring, managed antivirus (MAV), helpdesk support, and break/fix services. The predictable pricing makes it easier for businesses to budget, while MSPs benefit from efficient operations with fewer individual line items to track or negotiate.
Challenges
However, the simplicity of AYCE pricing can come at a cost. One of the primary risks is overeating at the buffet — meaning, clients may excessively rely on services because they see no financial downside. This can quickly strain (or worse, drain) your resources if usage isn’t closely monitored or managed.
Additionally, the lack of flexibility means the model may not suit clients with very specific or limited needs who prefer customized offerings.
Pros and Cons
Pros:
- Simple and predictable pricing makes budgeting easier for clients
- Streamlines administration and billing for MSPs, reducing overhead
Cons:
- Frequently misaligned with customer needs, e.g., estimating a new client will consume 10 hr/week but they end up consuming 40
- Limited flexibility — not ideal for all client types
- Risk of overuse, which could drain MSP resources
Is it for me?
The AYCE model works well for MSPs serving small to mid-sized businesses that need broad coverage and prefer predictable pricing. However, usage caps or service-level agreements (SLAs) can help ensure the your resources aren’t stretched too thin, maintaining profitability while meeting client expectations.
Break-fix
The break-fix pricing model focuses on billing clients per incident for technical support or repairs. In this model, clients only pay when something breaks, making it an attractive option for businesses that prefer not to commit to ongoing managed service contracts. Break-fix pricing is simple to manage and can serve as a valuable supplement to monitoring-only agreements, generating additional revenue when reactive support is needed.
How It Works
Clients are charged on a per-incident basis, meaning they only pay for the specific time and labor required to resolve issues as they arise. This model works well for one-off repairs or support tasks, such as fixing hardware problems, software malfunctions, or network outages. However, it’s important to point out that break-fix pricing is transactional, meaning there is no recurring revenue for the MSP.
Challenges
While break-fix pricing can fill short-term revenue gaps, it lacks the stability that recurring contracts offer. Additionally, clients using break-fix services may delay or avoid proactive maintenance, which can lead to larger, more expensive problems down the road. This model can also make it harder for you to build long-term relationships with clients compared to more comprehensive service agreements.
Pros and Cons
Pros:
- Simple to implement and manage
- Provides additional revenue opportunities for one-off incidents
- Can upgrade clients to managed service contracts once you’ve built trust and rapport
Cons:
- Lacks recurring revenue, making it harder to scale
- Clients may choose break-fix over more comprehensive contracts, missing out on proactive support
Is it for me?
While the break-fix model can be useful for emergency support or as a supplement to other contracts, it is typically less sustainable for MSPs in the long run. Many MSPs use break-fix pricing as a gateway service, hoping to transition clients into recurring contracts for better long-term support and profitability.
Pricing models: honorable mentions
In addition to the above, tiered/bundled and a la carte are two other common MSP pricing models. The reason they aren’t included with the rest of the pack is that despite being widely known in the industry, they aren’t the best options for burgeoning MSPs. Let’s discuss further.
Tiered/Bundled Pricing offers predefined service packages at different levels (e.g., basic, standard, and premium), with each tier providing more comprehensive features. It’s commonly used by MSPs to cater to businesses of varying sizes or needs, allowing clients to select a package that aligns with their budget and requirements.
However, managing multiple tiers can strain the limited resource pool that startup MSPs often have. As an alternative, focus on scaling your operation using a per-user or per-device pricing option, as it’s a simpler, scalable approach that aligns with client growth and ensures predictable revenue – without having to deal with the complexity of rigid bundles.
À La Carte Pricing allows clients to pick individual services from a menu of offerings, paying only for what they need. It provides flexibility for businesses with specific requirements and is often used to supplement core packages or for specialized services.
The main issue with this pricing option is that it requires you to know the value of every individual service, which equals higher administrative overhead. On top of that, it may also result in unpredictable revenue streams, making it harder to plan for growth. A more streamlined pricing option is, again, per-user/device, as it ensures predictable revenue, simplifies operations, and supports consistent growth by aligning costs with client needs and usage.
How to choose an MSP pricing model
Knowing what the common MSP pricing models are is only half the battle. The real challenge is selecting a model that fits within the confines of what’s accepted in the space and also works for your business.
Meaning, don’t fall into a cycle of creating custom, one-off pricing models on a per-client basis just to win their business. Not only is this inefficient, but you’ll also end up searching for MSP software that can support these customizations, which isn’t likely to be a fruitful search.
As with any other foundational decision for your MSP business, you must consider context and your goals as you decide on a model. The six steps below can help you get it right.
Define your target market
Clearly developing and understanding your ideal customer personas (ICPs) is a vital step to finding the right pricing models. In a previous post, we’ve reviewed how ChatGPT can help you get started with MSP ICPs, but getting those initial ICPs is just the beginning. From there, you need to consider their pain points, how they make purchasing decisions, and how their business context aligns with your MSP offerings.
Are your ICPs chasing the lowest-cost option? Are they in a niche where you can charge a premium? What pricing models best align with their business needs? Answering these questions will help set you up for success as you develop your MSP pricing model.
Assess your costs
Your costs are the other side of the equation that will determine your profitability. Many pricing models directly use some form of “cost plus” pricing, where the costs of delivering a service are used as a baseline for creating a price. The seller takes the costs and adds a markup to define the price to their clients.
Even if you don’t use a “cost plus” model directly, you must assess and understand your costs to operate an efficient and profitable business. Make sure you consider both the direct costs, such as labor, license fees, and infrastructure costs, as well as expenses, such as training, sales and administrative overhead, and marketing.
Determine your minimum viable contract
Regardless of the pricing model you choose, make sure you understand the “floor” that defines where you can comfortably operate a profitable business. Consider that floor your minimum viable contract.
Compare the monthly recurring revenue (MMR) for a given set of services with the cost of goods sold (COGS) and other expenses like sales commissions and determine if a given price point is viable. If it isn’t, the contract isn’t viable. If you need help deriving the different metrics required to determine contract viability, check out our blog on the top financial KPIs you should be tracking.
Consider scalability
A contract that is perfectly tailored to a specific client’s needs and maximizes your profits from that client is great. But, local optimization for specific clients can lead to global sub-optimization for your overall business. That’s because a patchwork of custom contracts can quickly become a nightmare to support from a technical, administrative, and sales perspective.
There’s no one-size-fits-all answer here. If you want to focus solely on a few clients that are big enough to enable the business outcomes you want, custom pricing for each one might be just fine. However, if you want to expand and serve dozens or hundreds of clients, more structured pricing strategies might make sense. The key is to ensure your MSP pricing model considers your scale and operational efficiency.
Research competitors
You’re likely not the first MSP in your region and niche. A competitive analysis provides several benefits. First, you’ll get a feel for what other options your potential clients have. You’ll also get to review ideas actively being tested in the market. See if you can find feedback in reviews and online forums to understand how clients respond to those different models.
With that information in mind, you can strategically set your prices to solve existing pain points. You can also avoid making mistakes your competitors had to learn about the hard way.
Look at technology trends
Technology drives a lot of MSP pricing decisions. For example, Office 365 licensing changes would directly impact many MSPs. Similarly, alternative technologies, like the rise of Chromebooks and ChromeOS replacing Windows machines in many schools, can open up new business opportunities and change the inputs to your pricing model.
Stay up-to-date on recent technology changes and trends so you can take advantage of opportunities when they arise.
Best practices for managed service agreements
Your contracts and agreements define how you do business with clients. Make sure that they’re set up in a way that supports your MSP pricing strategy and protects you from issues that can impact profitability. Here are four best practices to help you do just that.
Set boundaries
Good customer service is an essential part of running a sustainable MSP. However, it’s important to draw a line between providing good customer service and giving away services for free. Some clients may seek ways to receive services they simply didn’t pay for. This problem can be particularly prevalent with clients that prefer the lowest-cost option available. Ensure your contracts, business processes, and communications take a firm but fair stance with clients who try to get more than they paid for.
Include an escalation clause
Inflation can chew up profits fast. An escalation clause in your service agreements can help you hedge against inflation risk. The fundamental idea is that an escalation clause enables an MSP to raise prices by up to X% given some condition is met. If you’re entering into agreements of a year or longer, use an escalation close to hedge against inflation risk.
Shield your business from liability
Lawsuits and claims against your business can do significant financial damage. Ensure that your insurance policies and contracts help shield your business from liability. Examples of steps you can take to limit risk include:
- Disclaiming responsibility for 3rd party hardware or software failures
- Requiring clients to maintain local backups of critical data
- Obtaining cyber insurance and requiring clients to do the same
Don’t be afraid to fire clients
We’ve already talked about how important it is to identify your ICPs so you can focus on your ideal clients. It’s also important to acknowledge when a client has become more of a liability than their contract is worth.
Simply put, you need to know when to fire a client and have the courage to end the relationship if that time comes. If you don’t, you may wind up with clients overusing services, burdening support staff, and costing you money.
Improve your margins with Syncro
Syncro, an integrated MSP software platform, is built to help MSPs operate a profitable, sustainable, and scalable business. And, the pricing model drives that point home. Syncro’s per-user pricing doesn’t penalize MSPs for adding assets under management.
Additionally, by combining RMM and PSA capabilities in a single platform, Syncro reduces tool sprawl, increases opportunities for automation, and enables back-office efficiencies.
Want to learn more about how to run a more efficient, profitable MSP? Access our MSP pricing guide here.
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