How managed IT pricing works: per user, per device, or by the hour
Two quotes for the same business can differ by thousands of dollars a year and both be fair, because they are pricing different things. Here is how the common models work and what each one rewards.
The four models
1. Break-fix
You call when something breaks and pay by the hour. Nothing happens in between. It suits very small businesses that could get by for a day or two without their computers.
The weakness is the incentive. Nobody is paid to prevent the next problem, and the provider's income rises with your downtime.
2. Block hours
You buy a bank of hours in advance, usually at a discount, and draw them down. It is easier to budget for than pure break-fix.
It is still a charge for time, so the same incentive applies. Check whether unused hours expire.
3. Per device
A flat monthly fee for each computer, server and network device under management. It is clear when everyone has one machine each.
It gets harder to follow when people have a laptop and a phone, or when several staff share a computer.
4. Per user
A flat monthly fee for each person, covering the devices and accounts they use. It follows your headcount, which makes it the easiest model to forecast.
Most per-user providers offer two or three tiers. The tiers usually differ in how much security is included, not in how quickly the phone is answered.
| Model | You pay for | Easy to budget? | The provider earns more when |
|---|---|---|---|
| Break-fix | Hours worked | No | More things break |
| Block hours | Hours bought in advance | Partly | You use the hours up |
| Per device | Each device, each month | Yes | Devices need less attention |
| Per user | Each person, each month | Yes | People need less attention |
What decides the real cost
Two per-user quotes at the same headline rate can be far apart once you read the detail. These are the lines to look for.
- What counts as a unit. Is a shared mailbox a user? A meeting room account? A contractor who logs in once a month?
- What is excluded. Hardware, software licences and project work are almost always extra. After-hours calls often are.
- The onboarding fee. A one-off charge is normal. Find out what it covers and what happens if your systems need work first.
- Minimums. Many providers have a minimum monthly charge, which matters if you are small.
- Licence requirements. Some plans only work on a particular Microsoft 365 licence, which is a second cost on top of the first.
- The term. How long you are committed, how renewal works, and what it costs to leave.
A worked example
To show how the pieces add up, here is a business of 50 people with one server, priced from our own published rate card on the Professional plan. It is an illustration, not a quote.
| Item | Amount |
|---|---|
| 50 users on Professional, at $99 each | $4,950 / month |
| 1 managed server, at $175 | $175 / month |
| Monthly total | $5,125 / month |
| Onboarding, charged once at one month's plan fee | $4,950 once |
All figures AUD, excluding GST. Hardware, software licences and project work are separate and quoted in advance. The same 50 people would be $3,950 a month on Essential or $6,450 on Fortified, before the server.
Six questions to put to any quote
- Can I see every rate you charge, including after-hours and project work?
- How do you define a user or a device, and how often is the count checked?
- What is the onboarding fee and what does it cover?
- Is there a minimum monthly charge?
- Do I need to change my Microsoft 365 licences?
- What is the term, how does it renew, and is there a fee to leave?
Price is one of twelve things worth asking about. The rest are in How to choose a managed IT provider.
How Lumetra prices
- Per user, in three tiers: $79, $99 and $129 a month, plus GST.
- A user is a person with a company login. Shared mailboxes, meeting room accounts and service accounts don't count, and we reconcile the count with you monthly.
- Every other rate, from servers to after-hours, is published.
- Under about 20 users we quote individually, with a $900 monthly minimum.
- Onboarding is one month's plan fee.
- No lock-in beyond the initial term, no silent auto-renewal and no exit fees.
This guide is general information for Australian businesses, correct to the best of our knowledge when it was last reviewed. It is not legal, financial or security advice for your specific situation.