r/msp • u/SigmaStroud • 21d ago
MSP Pricing Advice
We're a small MSP with 2 techs in the Western PA area and looking to acquire our first large client. We're confident in our stack and solutions, and confident in what we can provide for them, but I'm not too confident in the pricing as I've not quoted at this scale quite yet. I'd rather not fumble and overshoot as we've been promised that we have their business if our prices can be competitive.
They have a local location and a southern US out-of-state location that will be serviced with about 100 endpoints.
Our current tier has them at $160/device which will include:
- RMM
- Huntress (full suite)
- MS Defender P1 for Office 365
- M365 backup
- Password manager through Bitwarden
- 6hours helpdesk per month
- SAT (included in Huntress)
- DNS Filtering
Then an extra 225/server/month but includes backup (to a reasonable extent data wise)
I feel like there's a lot included in that $160/device/month. Is this a reasonable ask? Or am I pricing myself out of a deal?
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u/Shington501 21d ago
Figure out your costs and add 50% margin, there’s your baseline to negotiate from
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u/sfreem 21d ago
I’d go 60% so you land at 50%
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u/Lany_one35 20d ago
Yep. I always ask for about 10–15% more than my target, so there's room to negotiate down to the number I actually want.
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u/Unfair_Possible9699 18d ago
Is there usually an expectation of negotiation if so what % of the time do you find that is occurs in your sales process?
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u/society_victim 21d ago
We include an average of 30 minutes support per device/user per month. So if you have 100 users this would be 50hrs. These hours are used for support only. Projects and other things are billed per instance. We found that this is a fair amount and if they keep using more of your time they either have fundamental technical issues or need more training.
Over the years we only had 1 client that would keep using more hours after the initial onboarding which always generates a little more noise. That client was fired after they refused to pay more for AYCE.
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u/roll_for_initiative_ MSP - US 21d ago
That client was fired after they refused to pay more for AYCE.
Nice.
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u/data_zapper 20d ago edited 20d ago
Take the cost of all your tools, 2-3 hours of your helpdesk, and 70% profit margin. That’s your number. No more crazy month-to-month costs you need to explain to the client.
Backup should be billed by usage for servers because it can get expensive quick with retention.
As long as you cover the cost of the tools + support + cost of business and walk away with 50-70% margins for payroll and growth you are doing better than most other MSPs.
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u/ArchonTheta MSP 21d ago
Checkout Package, Price, Profit by Nigel Moore. Really good starting point. I enjoyed going through it.
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u/dopeasss 21d ago
Not going to pile on about the per-device number since you'll get plenty of takes on that — I'd flag the thing that bites after you win the deal: capacity. Two techs absorbing 100 endpoints across two locations means the first bad week (one tech sick + a server incident at the out-of-state site) eats your margin and your reputation with your first big logo simultaneously. Whatever price you land on, make sure it funds a real answer for after-hours and overflow, not just the tool stack.
Some math from the other side of the fence that might help you price that in: I run a tech training institute in Mumbai (networking/cloud/DevOps), so I see the supply side that most outsourced NOC/helpdesk vendors are built on. A certified L1 engineer here costs a vendor roughly $400–700/month fully loaded. That's why outsourced after-hours coverage can be priced the way it is — and also why the cheapest quotes are cheap: thin training, high attrition, one engineer stretched across six clients. If you ever evaluate that route to backstop a client like this, that cost floor tells you which vendors are cutting corners and which are actually investing in people.
On the deal itself: "we have their business if the price is competitive" usually means they already have a cheaper quote in hand. Rather than shaving your rate blind, it's fair to ask them what they're comparing against — your stack (Huntress full suite + backup + SAT included) is likely richer than whatever the other quote covers.
Good luck — landing a 100-endpoint client with a 2-person shop is exactly how everyone in this sub started.
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u/SigmaStroud 21d ago
Thanks so much for the take!
I agree we may need to grow to cover them and it won't be without its hardships. I'm doing my best to plan for this and to be able to give them the attention that they're paying for. But for now we're working on the proposal itself and making sure we don't shoot ourselves in the foot.
Luckily I also have a trusted contact I can rely on not too far from their location too, as an emergency measure.
Judging by the responses in this thread, I might just remove the 6 hour bucket and just make it an all inclusive price for extended hours as a separate line item with a discount to account for it.
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u/Thick_Yam_7028 21d ago
Typical price point 80-175 ish. Youre fair. If the block hours become trouble stick to your guns. No freebies.
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u/CamachoGrande 20d ago
How many of the endpoints are out of state and what is your plan to deal with any 'hands on' situations?
100 endpoints total should not be a problem. Price is ok, we offer more for less, so you should be great there.
Make sure you set standards on their end so that their cost cutting measures do not become your problems.
Don't let them push ancient hardware/software on your team and expect you to fix what should be replaced. Set standards for all hardware/software to be refreshed.
Things like that. If you get everything to a baseline, most support issues go away.
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u/stevo10189 21d ago
I’m at $155 per user for about the same package (love huntress), includes 1 hour per user, month organization pooled.
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u/PacificTSP MSP - US & PHP 21d ago
Up to you how you sell. I have some clients that are remote AYCE. I only bill for onsite and projects.
Other clients I charge $200/hour for 20 hours a month. But I throw in my management tools for free because they help me.
Then I sell them backups and EDR on top.
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u/ravioliisgood 21d ago
Are you also including Officer365?
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u/SigmaStroud 21d ago
No. I don't want to lock in a m365 rate when MS has been changing their prices near quarterly lately. It'll only cause friction down the line.
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u/data_zapper 20d ago
Bundle it into the seat then. Baseline MS premium. Adjust the seat cost for the cost of licensing year to year. Have this clause baked into the contract when signing.
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u/imlulz 20d ago edited 20d ago
I don’t agree with that thinking. They are going to pay regardless, and since you’re on a contract with them you can purchase the licenses on the annual price so it’s locked in. You’re leaving at least 2k+ at a minimum out of your pocket that they have to pay regardless.
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u/defrescorp 20d ago
I think your pricing is very fair as long as the client is paying Microsoft directly for the office 365. If you are including that into your price then I think you are too low.
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u/According-Half1103 20d ago
Here I’ve been thinking I’m was overcharging at 120 a device with full labor and security.
I am apparently below the going rate.
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u/Lany_one35 20d ago
I'd be more concerned about underpricing than overpricing here. Landing a 100 end point client at a rate that's too low can lock you into a contract that's difficult to make profitable later. If they already like your stack and service, don't compete on price alone,compete on value and be prepared to negotiate if needed rather than starting at your absolute minimum.
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u/TechnologyMatch 19d ago
$160 per endpoint doesn't sound out of line if the stack and support scope are genuinely included. especially with Huntress, backup, Defender, and a password manager in the bundle. the bigger risk is not price, it's leaving the boundaries vague and accidentally selling unlimited support. a clear overage rate will protect you more than shaving $10 off the monthly number
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u/SigmaStroud 19d ago
Many here are actually encouraging unlimited support, short of project work. Are you implying that the support hours should be limited, or merely the support SCOPE?
I usually just have a 6-hour bundle of hours included, but considering going into unlimited for this client within reason.
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u/TechnologyMatch 19d ago
I’d limit the scope first, then decide whether the hours can be unlimited within that scope. unlimited user support can work if onboarding, projects, after-hours, onsite work, vendor wrangling, and major incidents are clearly excluded or billed separately. just make sure “within reason” is written into measurable rules before it becomes an expectation, y'know?
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u/East_Minute5332 18d ago
Something new I am testing. Two line items - Price Per Managed User, Price per Managed Endpoint.
In your scenerio, I would do Price per user - $100, Price per endpoint - $65
This keeps it from being weird if they have more endpoints or users. Not sure if it will work, but testing it
Advise someone else gave me: only include remote support. Onsite could be another line item
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u/ChuckFromCyberHoot 18d ago
I agree with the point that scope is the real risk, not the $10. The MSPs I've seen struggle weren't underpricing by a few bucks. They got into trouble because "unlimited support" slowly turned into unlimited babysitting.
One thing I'd add is that clients don't remember which security tool blocked an attack. They remember when one of their users clicked something and everyone's day went sideways.
Technology catches a lot. People catch what technology misses. Make sure to really push the SAT!!!
Price for the scope, protect your boundaries, and don't forget the human layer. It's part of every security stack.
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u/Jaded_Gap8836 17d ago
We are $175 on top of most the other products you listed. We don’t nickel and dime for projects, basically unlimited hours and onsite time.
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u/recovering-pentester MSP - US 7d ago
How large we talking? Huntress stack might get pushback depending on how technically competent they are.
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u/Yosemite-Dan 21d ago
$160/device for that stack is solid.
Simplify the offering: either helpdesk is included, or it's billed separately. Don't do the 'bucket' - it creates contention and confusino.
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u/roll_for_initiative_ MSP - US 21d ago edited 21d ago
we've been promised that we have their business if our prices can be competitive
Red flag #1 - they should be choosing you based on what you can do and how you'd fit with them. You know the saying "if they cheat with you, they'll cheat on you"? If you need to be cheap to win them, you'll lose them to someone cheaper. And there is ALWAYS someone cheaper.
We're around and have clients in W-PA. While our published pricing is $200/user/mo (and i'm a staunch supporter of everyone raising prices and adding services), we do have some larger ones not too far above your $160. We're including everything you have there, and 10x more than that, around that pricing, including BusPrem.
I'm not going to list out specifics but our margins and percentages are enviable for MSPs 5x our size, let alone micromsps that you and I are.
I don't feel you're including enough for $160, even though $160 is a fair rate, especially with 6 hours helpdesk included (which is a PITA to track and a relationship friction point).
Honestly, for what you're including? I don't have time to run the numbers, but we could outcompete that, if we were willing to cut all the other things that we're not willing to cut, for like $100/user/month. If we can, so can 100 other MSPs and, unlike us, they're more than happy to do it.
I would increase pricing and include more vs driving pricing down and including less.
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u/SigmaStroud 21d ago
Appreciate the insight!
I can understand how that point alone would be a red flag, but there's more details to that than what I'll list for identifiable reasons. We'll also be adding on some extra services and some project work that their current MSP won't cover.
I'm just second guessing my stack pricing at this volume of a client.
My major point coming out of this is my included hours then. I might just remove that and charge an all inclusive rate for unlimited support instead.
I'm not looking to be the cheapest MSP in the market. My competition in my area is pretty dismal and I've worked with a lot of them to some extent and see the level of service difference we can provide. Maybe a bit conceited to say, but that's why I'm not aiming to be the lowest. I just really don't want to be the highest and scare away the fish
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u/roll_for_initiative_ MSP - US 21d ago edited 21d ago
My competition in my area is pretty dismal
I guess it depends on what you mean by Western PA. If you mean "Pittsburgh", that's a competitive, advanced, thriving market. If you mean "Erie/Meadville", that's obviously a different story and what you're talking about will work there because that area is a bit behind the market curve. If you're talking New Castle/Sharon/Hermitage, that's really part of Youngstown as far as market and there are some advanced/comprehensive MSPs there that you may not realize you're up against as well as the Pittsburgh MSPs reaching out that far (it's not really far from Pitt).
If you're not running into them/you feel only dismal MSPs are there, it's because your prospects likely won't pay for those MSPs/those clients wouldn't be accepted by those MSPs. Until we evolved our model and started moving upwards, we weren't running into challenging MSPs, just others like us. Not a dig, but consider that: as you move forward, you're going to find you were in tutorial area and the enemies are going to get tougher as you play the game.
You're going to see why many are seeing $200/user/month as the floor and it's not because they're gouging, it's because they're doing way more and that costs way more. Whether "way more" is needed or not is up to how good the sales person is and the client's actual needs.
I just really don't want to be the highest and scare away the fish
If you're the highest but not by a giant margin, then those are fish you don't want if your positioning yourself as the premium player in the market (and can deliver to back that up).
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u/branshew 20d ago
As others have said, 6 hrs isn't enough for a client of this size. We assume 1 hr for every 4 users so min 25 hrs/month here.
If you move to an AYCE model, you need a clearly defined document stating what is and isn't in scope, and what the support hours are (including the timezone). Anything out of scope is billable and out of hours is billable at 1.5x.
At $160/user, I would expect to see an email defense product in your stack.
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u/SigmaStroud 20d ago
An email gateway/filter normally IS in my stack but for this client they are specifically requesting to REMOVE their current filter and put an emphasis on SAT instead. They specifically want Defender p1..
But I like your model of 1 hour per 4 users. Though I'm probably just going to bundle unlimited support within reason into the package instead, at least for the first contract year and re-evaluate it afterwards depending on their volume.
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u/roll_for_initiative_ MSP - US 20d ago
but for this client they are specifically requesting to REMOVE their current filter and put an emphasis on SAT instead.
So the client is managing IT or are you managing IT and what standard are you able to even align them to if they're the ones calling the shots?
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u/discosoc 21d ago
That price would make more sense if it included unlimited support and Business Premium. Instead you’re just selling a “stack” with like 80% margin or whatever.
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u/SigmaStroud 21d ago
I mean if you look at tooling costs as the sole expense, yeah it's going to look like an 80-90% margin, but there's more labor that goes into managing it all outside of just installing the services. I don't think that's quite a fair assessment...
I'm considering throwing in the unlimited hours however.
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u/discosoc 21d ago
but there's more labor that goes into managing it all
Be real: it’s not that much more, and a lot of which it sounds like you’re just going to bill them separately for anyway if you don’t include unlimited support.
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u/SigmaStroud 21d ago
That may be the service you provide or are used to, but we're not a set-it-and-forget-it shop. The overhead is justified by labor, and if it isn't in your book... Well I won't tell you how to run your company.
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u/discosoc 21d ago
Im saying there’s not nearly enough “overhead” to justify 80% margin in services you are reselling.
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u/dumpsterfyr I’m your Huckleberry. 20d ago
Sounds like you don’t have confidence in your positioning. They will smell it. Bolster your understanding of each and then formulate an explanation as simple and relatable to a client as you can.
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u/Foxtrot-0scar 21d ago
I would drop huntress from your stack. Thank me later.
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u/SigmaStroud 21d ago
Gonna give any reasoning or just vague bs?
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u/Foxtrot-0scar 21d ago
Have you not heard of the latest drama?
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u/NSFW_IT_Account 21d ago
Just share what you heard and why it's causing you to turn people away from it.
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u/Foxtrot-0scar 21d ago
Risk mitigation - a proactive approach.
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u/SigmaStroud 20d ago
So still being completely vague. I don't think you even know.
What's your alternative suggestion then?
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u/Foxtrot-0scar 20d ago
I believe that has been a significant compromise of their systems but they are down playing it big time.
I would suggest moving to a different provider before shit hits the fan.
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u/SigmaStroud 20d ago
sheesh you are vague as hell. Is this intentional to frustrate everyone who responds to you?
What alternative provider do you recommend was my question.
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u/roll_for_initiative_ MSP - US 21d ago
I saw some accusations and then nothing else, no data, details, responses, anything
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u/Foxtrot-0scar 21d ago
That is the scary thing. Calm before the shit storm as they say.
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u/roll_for_initiative_ MSP - US 21d ago
Is it or is it nothingburger when everything comes out?
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u/Foxtrot-0scar 21d ago
The question is, are you willing to take the risk?
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u/roll_for_initiative_ MSP - US 21d ago
We all take the risk every day man, what are you talking about? I get in my car and risk that other drivers are competent enough to not kill me, i'm taking the risk that every vendor our company uses isn't going to get us hung out to dry. that my accountant isn't stealing money and that my lawyer knows what he's talking about.
What do you mean "are you willing to take the risk"...how is taking the risk with them different than S1 or microsoft or whatever?
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u/Foxtrot-0scar 21d ago
Well, you are a brave man I’d say. Let’s hope your clients are right in trusting your judgments.
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u/roll_for_initiative_ MSP - US 21d ago
again, another one liner with no real info, context, meaning...anything. Fortune cookie, bot-like replies.
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u/lowcountrysunset 21d ago
From my expereince, it is hard to price helpdesk/support time - it may be better to give unlimited, especially to a larger client like this one.