I would argue is that per device vs per user depends on exactly what you're managing and how your costs scale. I could see a scenario where "heavy users" are dragging down your profitability because of the number of devices they use scales your overhead. Again it just depends. If the users are responsible for their own devices and thats out of your scope then fair enough.
Heavy how? Most users have 1 or 2 managed devices. I don't think I have ever seen more than 4, unless devices that were not in a user scope are included. Laptop, desktop workstation, mobile, and tablet - but that's pretty rare even.
I was wondering about the same thing. What does all included actually mean? Hardware for the user also included? Or just subscriptions, management and support? Those prices really seem to differ between the USA and Europe anyways. No way you get clients when asking €250 per user on this side of the pond. Really curious what's considered all in :)
I'm facing this same challenge in the US. My target customers (small business) have a lot of incentive to sign up with Geek Squad and get 6 devices managed for 199/YEAR!? I have several key value props but this is a massive hurdle for us in the US
Eric, we bill be user but nowhere near you suggested numbers. What do you consider as including EVERYTHING per user to arrive at your suggested numbers?
$250 to $2100 per month is for internal IT so equipment and lots of other things are included that would be the responsibility of an employer that are not the responsibility of the MSP. Also, the typical internal IT infrastructure for larger businesses are very top heavy on salaries that quickly contribute to those numbers. Maybe I should do another video on how I would price a fully managed package today.
Most MSP RMM and EDR vendors charge per device Not per user. So you will lose your ass by charging per user since users have 2-4 devices. Would Love to see your breakdown on the per user $ you throw out.
For a more detailed breakdown I would refer you to Managed Services in a Month or Nigel Moore’s book on pricing, “Package, Price, Profit”. According to CompTIA’s most recent state of the market report, per user pricing is quickly becoming the most popular pricing model, especially as costs move away from the device and towards cloud services. The key is that you include the costs for “up to X devices” per user. Tool cost is the smallest percentage of cost in a managed service plan and increasing the number of devices really doesn’t increase the amount of labor (your largest cost) required to deliver the service. The key is making sure the price of your service equals [tool cost for X devices] + [labor cost] + [gross margin target] so that you don’t lose any money. You control the price, the number of devices you cover, and many other variables that control your cost.
That's not true at all. Budget for that in your pricing. 4 devices is very rare, 3 is somewhat rare, most have 1 or 2 devices. Define a "user" in your contract. "Users may have up to 3 managed devices". If you don't hit profit numbers, calculate devices / user for that company, and readjust your pricing. Maybe have an "additional device" add-on service for a user. Limit that to actual user devices so you don't end up managing servers as an add-on device for a user.
Hi Eric, I have two models - per user but only for 20 users, for per device 20 to 100. I have clients that have more than 100 users so the per-user model is overkill. what are your thoughts?
I was trying to start an MSP to target smaller schools who can't afford IT departments but need the help. Would this be a good case to Charge per endpoint?
I would argue is that per device vs per user depends on exactly what you're managing and how your costs scale. I could see a scenario where "heavy users" are dragging down your profitability because of the number of devices they use scales your overhead. Again it just depends. If the users are responsible for their own devices and thats out of your scope then fair enough.
Heavy how? Most users have 1 or 2 managed devices. I don't think I have ever seen more than 4, unless devices that were not in a user scope are included. Laptop, desktop workstation, mobile, and tablet - but that's pretty rare even.
I really like your video but please get rid of that clock. Thank you. Great content
User+Device
Whichever is the higher number.
I was wondering about the same thing. What does all included actually mean? Hardware for the user also included? Or just subscriptions, management and support? Those prices really seem to differ between the USA and Europe anyways. No way you get clients when asking €250 per user on this side of the pond. Really curious what's considered all in :)
I'm facing this same challenge in the US. My target customers (small business) have a lot of incentive to sign up with Geek Squad and get 6 devices managed for 199/YEAR!? I have several key value props but this is a massive hurdle for us in the US
Eric, we bill be user but nowhere near you suggested numbers. What do you consider as including EVERYTHING per user to arrive at your suggested numbers?
$250 to $2100 per month is for internal IT so equipment and lots of other things are included that would be the responsibility of an employer that are not the responsibility of the MSP. Also, the typical internal IT infrastructure for larger businesses are very top heavy on salaries that quickly contribute to those numbers. Maybe I should do another video on how I would price a fully managed package today.
@@AllThingsMSP please do another video that includes what a fully managed package may include. Thank you Jeff
Jeff Sherwood - working on it but it’s turning out to be a 10 Minute Tuesday instead of only 2. Re-building my calculator spreadsheet to go with it.
@@AllThingsMSP Was this a publicly available spreadsheet?
When you say $250 per user, what are you including in that? Full Support, AV, Offiate Backup, anything else?
Hey golfjumper did you get an answer to this?
@@ukonthego he liked the post so I assume that is confirmation
Most MSP RMM and EDR vendors charge per device Not per user. So you will lose your ass by charging per user since users have 2-4 devices. Would Love to see your breakdown on the per user $ you throw out.
For a more detailed breakdown I would refer you to Managed Services in a Month or Nigel Moore’s book on pricing, “Package, Price, Profit”. According to CompTIA’s most recent state of the market report, per user pricing is quickly becoming the most popular pricing model, especially as costs move away from the device and towards cloud services. The key is that you include the costs for “up to X devices” per user. Tool
cost is the smallest percentage of cost in a managed service plan and increasing the number of devices really doesn’t increase the amount of labor (your largest cost) required to deliver the service. The key is making sure the price of your service equals [tool cost for X devices] + [labor cost] + [gross margin target] so that you don’t lose any money. You control the price, the number of devices you cover, and many other variables that control your cost.
That's not true at all. Budget for that in your pricing. 4 devices is very rare, 3 is somewhat rare, most have 1 or 2 devices. Define a "user" in your contract. "Users may have up to 3 managed devices". If you don't hit profit numbers, calculate devices / user for that company, and readjust your pricing. Maybe have an "additional device" add-on service for a user. Limit that to actual user devices so you don't end up managing servers as an add-on device for a user.
Hi Eric, I have two models - per user but only for 20 users, for per device 20 to 100. I have clients that have more than 100 users so the per-user model is overkill. what are your thoughts?
I was trying to start an MSP to target smaller schools who can't afford IT departments but need the help. Would this be a good case to Charge per endpoint?
It depends on what services you are providing and to whom. Are supporting infrastructure, school employees, students, or all of the above?
@Eric Anthony offering t3 support. To all their endpoints and back ups for their teachers and staff. As well as some anti-virus
@@frostedbox3832 so probably yes per endpoint because it sounds like you won’t be doing helpdesk with users
So we do neither, we bill per location based on devices, users, M365, password manager, cyberdetection and blah blah blah.
Then we bill a one line item to the client