How Downtime Increases the Demand of Managed IT Service

Different companies charge a different amount for providing managed IT service. There are different kinds of support available and one should know what difference you are getting; when you are paying different amount is necessary. But is one type of support really better than others? Moreover, what makes it better?

At the end of each year, when business owners look at their financials, they see an amount they have paid for IT support. That actually is a part of the total cost of managed IT service, or to be precise, the cost of supporting a computer network.

Downtime is the biggest real cost you pay for supporting your computer network.

Managed IT Service: Examples of Downtime

It is deplorably non-professional that a number of small and mid-size businesses have no mechanisms to counter anything bad that happens on their computer networks. Some of the most common problems are server crashes, desktop crashes, firewall crashes, router malfunctions or switch malfunctions. They can take down the entire network for long hours. Everyone thinks that these problems do not happen too frequently and many business owners do not even bother to consider them. These rare instances are categorized as downtime.

This is Not Just When You Are Down

An important question to ask is that does downtime only happens when you are down. The answer is no. On the contrary, this is a small part of downtime.

In the context of computer network, anytime when your employee’s performance is negatively affected and the reason is technology, it is downtime. In addition, when your employees are waiting for an application to load on his desktop, it is downtime. Even when web pages take time to load on workstation and employee has to wait falls under the category of downtime. Waiting for pages to print on the printer is also downtime. Employee recreates any document that goes missing or is deleted is downtime. The list goes on.

The time when a business owner realizes these things, they start tracking how much this hidden time happens in a month or year. That is the moment when they truly understand the hidden cost of downtime.

Calculation of Downtime

So what actually is the cost of this invisible downtime. Let’s start the calculation with the assumption that average employee wage is $35,000 per year. Their hourly pay would be $17.50, assuming that they take two weeks of vacation in a complete year.

Now think that during this hour, their workstation goes little slow, and leads them waiting for a couple of minutes. Calculations reveal that it would be tantamount to 16 minutes every day and one hour and twenty minutes every week. The weekly loss will be $23.28. When you calculate year loss, it would be $1,210.56. That’s a really grim scenario.

Wait, the scene is going to get worse. In all the above calculation, we have not considered the time, which actually is downtime. The real down and out time, when your server is crashed or the network resources stop working.

Let us calculate some more examples to get a deeper insight into how horrible the situation can go when we include those inevitable times. Suppose a company with 9 employees and 1 owner, a total of 10 people.

If three of the employees’ downtime causes the loss of $20,000 per year, the total loss would be $60,000 per year.

If four of the employees’ downtime causes the loss of $35,000 per year, the total loss would be $140,000 per year.

If two of the employees’ downtime causes the loss of $35,000 per year, the total loss would be $100,000 per year.

If the owner’s downtime causes the loss of $80,000 per year, the total loss would be $80,000 per year.

Therefore, the total loss downtime caused by this company in a year would be no less than $380,000 per year.

It breaks down to an hourly loss of $183. This cost doubles and crosses $400 when the network goes down for a couple of hours and none of the employees is able to access the network resources. This constitutes the cost of both downtime and the charges of tech guys who come to fix the issue. The business may go down for the entire day and face heavy losses, which can be more than $1460. If this happens only once in a month during the entire year long, losses per year would be $4,400.

There definitely are additional fees and concerns with these “downtime” problems, but if you take just these two specific instances, the company would end up losing over $16,000. Perhaps, it is twice what they could have paid an IT Support company to help them with the network over the course of the year, provide managed IT service. All we discussed above could easily be avoided.

Is full time IT person a good option?

This practice is commonly adopted by small and medium-size organizations. They hire an IT technician as a full-time employee. In one full year, these techs normally make forty to sixty thousand dollars. In addition, they receive benefits, bonuses, and vacation on the top of the salary. If you can compare it with the cost of managed IT service, you will realize how much expensive this is, to support small and medium-size networks. When the company grows to 50 or more persons, then it starts making sense to hire a full time IT person.

Business networks who still get support from companies who use a break-fix methodology will generally pay the following hourly rates for services provided by these types or sizes of companies.

  • Individual tech (even if part-time): $60-$100 per hour.
  • IT firm of one or two persons: $75-$125 per hour.
  • Mid-sized IT Support Company of 5-10 techs: $90-$150 per hour. Some may offer a flat monthly fee for services.
  • Larger IT Support Company of more than 10 techs: $100-$225 per hour and may charge a flat monthly fee.

In the past, few firms allowed their customers to purchase blocks of time. Basically, the customer was supposed to pre-pay for 30-40 hours of time. The rate was slightly discounted. Though this method of billing was very convenient for the IT Company, most of the customers did not feel that this method of paying could serve their best interest. Some businesses use this method of paying for their IT Services.

You Don’t Like Flat Monthly Fee

If you say yes, then most of the users would agree with you. However, there is nothing to worry about. Most of the managed IT service providers do not charge a flat monthly fee. Usually, they offer some sort of monitoring along with remote and on-site visits as part of the monthly fee.

Obviously, the primary detriment of the flat monthly fee is the fact that it is a flat monthly fee. If your computer network is completely healthy and does not need any maintenance or support, then you still pay it all. Most of the business owners do not like that thing. They really think, why to pay for service and maintenance when there was none. It fundamentally does not make any sense on a rational basis.

Flat rate does not make any sense also because it adds the glimpse of the old break and fixes methodology. You do something when something happens and compels you to do something. So why hire managed IT service then. Where is the management, when you wait for the issue to arise in order to address it?

Luckily, a managed IT service provider does not use this model for operation. True managed IT service provider is continually monitoring your business network to prevent downtime issues from occurring.

If you or your employees face no problems using your network or devices, it would be a dream come true situation. This is the most simple definition of the most ultimate goal.

Final Words & Final Price

Either you pay a lump sum after a month or the chunks every month; you will have to pay at the end for managed IT service or support. It simply is the expense of doing business.

Cost for managed IT service can vary from an organization or in other words from scenario to scenario. In most cases, managed IT service provider charges per device, which includes monitoring 24/7. It also includes remote maintenance when required and on-site maintenance and support when necessary.

You can expect per device costs to fall within these ranges.

  • $290 per month for network management
  • $249 per month for server management. Only one server.
  • $50 per month for desktop management. Only one desktop.

Let us figure out how annual costs would look like.

  • First Company – 1 server, 5 workstations = $793 / month or $9,500 annually
  • Second Company – 2 servers, 12 workstations = $1,385 / month or $16,620 annually
  • Third Company – 4 servers, 25 workstations = $2,520 / month or $30,240

One of the biggest benefits of Managed IT Service is discovering and fixing problems before they influence your business. Not only, but has it reduced costs it also has minimized the probability of nefarious and terrible DOWNTIME we have discussed in the blog. The hype with managed IT service totally worth it.