Explore the 7 most common MSP pricing models and learn how to set a competitive, scalable pricing structure that aligns with your IT services and client expectations.
How you price your managed services can make or break your MSP business, especially in a market where clients expect more for less. You’re not just competing with local firms anymore; you’re up against national providers, white-label platforms, and tech-savvy clients who are quick to price-shop.
According to the Service Leadership Index Q4 2024 report, 18% of MSPs reported operating at a loss, up from 14% in the previous quarter, despite average adjusted EBITDA remaining at 11.1%. This indicates that while some providers maintain profitability, a significant portion are struggling to sustain their operations.
The MSP landscape is further complicated by rising operational costs, intense competition, and clients demanding more value for less. In such an environment, selecting the right pricing model isn’t just a financial decision, but a strategic imperative that can determine your business’s long-term viability.
In this guide, we’ll delve into the most common MSP pricing models, analyze their advantages and drawbacks, and provide actionable insights to help you establish a pricing structure that reflects your value proposition and supports sustainable growth.
What is MSP Pricing?
MSP pricing is the strategy used by Managed Service Providers to charge clients for ongoing IT support, covering services like monitoring, cybersecurity, helpdesk, backups, and more. Unlike hourly billing or one-time projects, MSP pricing models are built for long-term, proactive relationships.
There’s no one-size-fits-all approach. Some providers charge per user or device, while others offer bundled tiers or custom plans. The right model should balance profitability, scalability, and clarity, both for your business and your clients.
Beyond covering costs, pricing shapes client expectations, influences behavior, supports retention with predictable billing, and defines how services are delivered. Done right, it becomes a strategic tool, not just a financial one.
In the next section, we’ll break down the seven most common MSP pricing models and how each one might (or might not) work for your business.
7 Common MSP Pricing Models
When it comes to pricing managed services, there’s no universal template, but there are a few models that have become industry standards. Each has its strengths and trade-offs, and the best choice often depends on your client base, service stack, and operational capacity.
Let’s break down the most widely used MSP pricing models and what they look like in practice.
Per Device Pricing
This model charges a flat monthly fee for each device under management, whether it’s a workstation, server, firewall, or mobile device. It’s easy to quote and simple for clients to understand. For example, you might charge $80 per workstation and $300 per server.
Per device pricing is predictable and scalable, but it can also lead to scope creep if the number of devices grows without adjustments to the contract. It’s best suited for smaller businesses with straightforward infrastructure or clients that prefer clear itemized billing.
Per User Pricing
Per-user pricing charges a fixed monthly fee for each user, regardless of how many devices they use. It simplifies billing and reflects the reality of multi-device environments, where employees use laptops, phones, and possibly tablets interchangeably.
This model aligns well with modern, hybrid work environments. However, it requires strong definitions around what’s included per user (e.g., remote support, device monitoring, security) to avoid confusion or misuse. It can be highly profitable when bundled with cloud-based services like M365 or VoIP.
Tiered Pricing (Bundled Packages)
Tiered pricing offers clients a set of bundled services at different levels, think Bronze, Silver, and Gold. Each tier includes progressively more services or higher levels of support. This model makes it easier for clients to choose a package that fits their needs and budget, while giving you upsell opportunities.
It’s a common model because it’s flexible and allows clients to grow into higher tiers. However, clearly communicating what each tier includes (and excludes) is essential. If not done well, clients may expect “Gold-level” service on a “Bronze-level” plan.
Value-Based Pricing
Value-based pricing focuses on the outcome, not the deliverables. Instead of pricing based on the number of devices or users, you price based on the perceived value of your service, such as uptime, data protection, or business continuity.
This model can command higher margins if your MSP delivers high-impact results. But it requires deep knowledge of the client’s business and the ability to quantify ROI. It works best for mature MSPs with consultative sales processes and strong client relationships.
Monitoring-Only Pricing
With this model, the MSP provides remote monitoring and alerting, but remediation and support are billed separately. It’s often used for clients with internal IT teams who need visibility but not full outsourcing.
Monitoring-only plans can serve as a low-commitment entry point for hesitant clients or those testing MSP relationships. But it’s important to define boundaries clearly, clients may assume you’re taking action when you’re only observing.
À La Carte Pricing
À la carte pricing allows clients to pick and choose services from a menu, customizing their stack based on need and budget. It’s flexible and attractive for clients who only want specific solutions, like backup or endpoint protection.
That flexibility can come at a cost, both operationally and in terms of profitability. Managing dozens of unique configurations adds overhead and makes it harder to standardize service delivery. It can work for MSPs who offer specialized services, but it’s generally harder to scale.
All-You-Can-Eat (Flat Rate) Pricing
This model offers unlimited support and services for a fixed monthly fee. It’s attractive to clients who want cost predictability and comprehensive support without nickel-and-diming. For MSPs, it can simplify billing and foster deeper client relationships.
The key is setting clear boundaries, defining what “unlimited” really means. Without careful scope control, this model can lead to overuse, margin erosion, and team burnout. However, when paired with automation and efficient service delivery, it can be both profitable and client-friendly.
Each model serves a different purpose and fits different stages of MSP maturity. Some MSPs even blend models across client types or service offerings.
Next, we’ll explore how to set your pricing, step by step.
Steps to Set Your Own MSP Pricing
Choosing a pricing model is only one part of the equation. The real work lies in setting rates that are sustainable, competitive, and aligned with your business goals. Many MSPs fall into the trap of underpricing just to win deals, only to realize months later that they’re operating on razor-thin margins, or worse, losing money on every ticket.
Here’s a structured approach to building a pricing model that works for your MSP, with long-term profitability and scalability in mind.
Analyze Your Costs
Before you can price your services, you need to understand what it costs to deliver them. This includes not only direct costs, like tools, licenses, vendor fees, and labor, but also overhead such as rent, insurance, and management time.
Break down your cost per endpoint, per user, or service, depending on how you deliver support. Factor in the cost of reactive work, after-hours support, and even the time spent on QBRs or ticket follow-ups. Without this baseline, any pricing decisions you make are essentially guesswork.
If you’re not tracking costs in a granular way, now is the time to start. Profitability begins with visibility.
Plan for Scalability
Your pricing should reflect not only today’s costs but also the cost of growth. As you onboard more clients, will you need to hire additional technicians? Will your RMM or PSA licensing costs go up? What happens to your profit margins if a client’s environment expands?
Pricing too lean today may leave you stuck later with contracts that don’t support your future operating model. Build in enough margin to absorb growth-related costs without having to renegotiate every agreement.
Scalability isn’t just about revenue, but also making sure your service delivery model can grow without burning out your team or breaking your processes.
Identify Your Target Market Segment
Not every client is a good fit, and your pricing should reflect who you’re really trying to serve. A law firm with 10 users and strict compliance needs will value different services (and be willing to pay more) than a startup coworking space running on Google Workspace.
Start by segmenting your ideal clients by industry, size, regulatory requirements, or tech stack. Then consider how price-sensitive they are and what kind of service levels they expect.
The goal isn’t just to match the market; it’s to build a pricing structure that makes sense for the type of clients you want more of.
Stay Current with Technology Trends
Your pricing should evolve with your service stack. If you’re adding more advanced offerings like MDR, zero trust architecture, or cloud compliance support, those services come with different costs, risk profiles, and value propositions.
Clients are increasingly aware of trends like vendor consolidation, AI-powered automation, and proactive security. Positioning your services in line with these trends can justify higher pricing, but only if your team is ready to deliver.
Your pricing should reflect not just what you do, but how well you keep up with what’s next.
Assess Your Competition
Competitive research doesn’t mean copying what the MSP across town is charging but understanding the value they offer and how they frame it. Look at what’s included in their tiers, how they pitch service levels, and where you can offer something they don’t.
If your pricing is significantly lower than competitors offering similar services, clients may question your capabilities. On the flip side, if you’re priced higher, you need to communicate the value clearly through things like guaranteed response times, client onboarding experience, and documented results.
Know your market, but don’t race to the bottom.
Choose Your Pricing Model
With all this data, costs, scalability plans, client types, tech stack, and market comparisons, you’re in a solid position to choose the model that fits. You might find that a per-user model aligns best with your service tools and billing workflow, or that a hybrid of tiered and a la carte works better for diverse clients.
Whatever you choose, consistency is key. Train your sales team on how to present and defend your pricing. Align your SLAs and contracts with what’s included. And make sure your service delivery team knows what’s promised and what isn’t.
The pricing model itself isn’t nearly as important as how well you execute around it.
Periodically Evaluate & Adjust Your Pricing Structure
The MSP space moves fast, and so do client expectations. What worked two years ago might be outdated today. If your margins are shrinking, tickets are increasing, or you’re losing deals to more modern offers, it may be time to revisit your pricing.
Schedule a regular pricing review, at least annually. Look at client profitability, average ticket volume, upsell opportunities, and changes in vendor pricing. Don’t be afraid to adjust rates with proper communication, especially if the value you deliver has increased.
Transparent, data-driven pricing changes often earn more respect than resentment, especially if your clients see that you’re continuing to evolve.
When you approach pricing as a strategic decision, not just a sales tactic, you position your MSP for sustainable growth, healthier margins, and stronger client relationships.
A Smarter Way to Think About MSP Pricing
There’s no one-size-fits-all answer, but there is a better way to approach it. When pricing reflects both the value you deliver and the reality of your operations, it becomes more than just a number; it becomes a strategic advantage.
Whether you’re refining existing packages or building a pricing structure from scratch, take the time to align your model with how your team works and what your ideal clients truly need. The most successful MSPs don’t just price to compete – they price to grow.
If it’s been a while since you last revisited your pricing, now’s a good time to step back, recalibrate, and make sure it’s still working for you, not against you.
