The Battle Of Break-Fix IT vs. Managed Services (A Comparison)

This is one of the most common questions I’m asked and one that needs to be addressed objectively. Full disclosure here… I work for a Managed Service Provider and not a Break-Fix IT shop. However, I will never try and convince someone that they need a full Managed Service Plan if they don’t. I even wrote a book on break-fix vs managed services (see our partner page)

Let’s get right into The Battle of Break-Fix IT versus Managed Services.

What is Break-Fix IT?

Break-Fix IT is a term that applies to an IT service company that charges hourly for the support they provide. These shops make money on hardware sales, licensing, and of course, hourly support. A business will call them when they need a project completed or assistance with their network, computer, security, etc. They charge an hourly rate between $75 to $150. A Break-Fix tech will complete the task, bill the client, and they may not hear from them again for many weeks.

There are still many IT groups in each market that specialize in break-fix work. Most are quasi-break-fix businesses where they charge monthly for certain services, such as data backups, anti-virus, or Microsoft Office 365.

It’s important to keep in mind that computer networks have grown increasingly complex over time, so many of the mid-sized to larger IT companies have transitioned away from this model.

What Are Managed Services?

Managed Services is a broad term that describes a business that charges a per-user or per-device management fee. This fee typically covers support (remote and/or onsite), data backups, security, proactive services, etc. This is a more comprehensive relationship because the MSP (Managed Services Provider) has thorough documentation of the network, the techs are well versed in the client’s business and know their key users, and they are on a “retainer”, so the client is prioritized if something were to go wrong.

This model may seem like the ideal route, but it does come at a cost. To have all of your IT services included in a single agreement, and to have a team on call to assist requires an investment that ranges from $50-250 per-user or per-device per month. Some business owners get sticker shock because they may have spent as much on IT service in the past year as a Managed Service Provider would expect for a quarter.

The Benefits & Drawbacks Of Each

Break-Fix IT Benefits:

  1. Very little to no monthly cost (Invoices are only accrued when service is rendered.)
  2. They are typically from smaller tech shops, so you will develop relationships with everyone that works there, including the owner.
  3. Many have a “do-it-all” mentality which may include security cameras, application development, website maintenance, phone system support, etc. They can be considered a “jack of all trades” in some respects.

Break-Fix IT Drawbacks:

  1. They may not have the same level of reporting and documentation because a business owner might not want to pay the hourly rate for proactive services.
  2. They typically have a smaller staff so response times may take too long.
  3. “Doing it all” may lead to staff that are generalists and not specialists.
  4. They get paid to fix things that break. That incentive may not be in the best interest of the business owner.

Managed Services Benefits:

  1. It’s easy to budget for. The agreements are typically comprehensive, so your statement will almost always be constant, except for large projects and hardware upgrades.
  2. They are known for having specialists on staff to thoroughly understand each aspect of a computer network – data backup and business continuity, cybersecurity, Office 365, phones, etc.
  3. Managed Services almost always provide SLAs (Service Level Agreements) that detail expectations for response times, resolution times, customer satisfaction, etc. An MSP with a response time over 3-4 hours should be reconsidered.
  4. Payment is consistent, so the more efficient the MSP can make your business, the better it is for both parties.
  5. Managed IT Services typically include Remote Management & Monitoring (RMM) that can get to the root of problems to fix them for good. RMM also proactively catches issues and resolves them before they create downtime or interruptions in your IT operations.
  6. Servers, routers, computers, etc. actually last longer and perform better when they receive regular maintenance with Managed Services.
  7. Managed Services Providers usually offer various service packages that can be customized, so you get only what you need at a price that fits into your budget

Managed Services Drawbacks:

  1. You’ll be locked into a monthly contract that is typically more expensive than working with a Break-Fix shop. Most have a minimum of 30-day notices, while others require a year or longer contracts.
  2. They typically specialize in computer networks but will assist in vendor management for other technology services for your business. They will have “preferred providers” for phones, copiers, marketing services, etc.
  3. Depending on the structure and size of the business, you may never meet the owner or develop a relationship with techs like you will with a Break-Fix shop.
  4. This space is increasingly occupied by large corporations, meaning you may not be supporting your local economy working with some MSPs.

So, Which Is Better?

That’s a good question, and I wish there were an easy answer. I’m going to have to answer like an economist; it all depends.

Are you a small business with 8 employees? Honestly, a break-fix shop is probably your best bet. Being locked into a monthly agreement when your network is very simple may be hard to justify.

Are you a healthcare entity with 20+ users? If you’re using a break-fix shop, you’re in trouble. Each industry has unique requirements and regulations for its technology. A break-fix shop will most likely not have the competency it takes to adhere to everything that applies to your computer network.

Are you an enterprise business with 1,000 employees? If so, you most likely have a budget that can support an internal IT team that could manage every aspect of your network. You may still want to work with an MSP for infrastructure support or help desk overflow, but to solely rely on an MSP in this space would not be recommended.

It all depends on what you think is best for your business. If you’re okay with not having a dedicated IT team and would rather have your buddy help when you need him/her, then go for it. If you only have 4 employees but have a relatively complex network because of your industry or applications, it might be best to work with an MSP that specializes in your industry.

In Conclusion

There are pros and cons to both. It’s up to you to decide what you need. Reach out if you need any assistance, and I’ll be happy to provide objective advice on what route would be best for your business.