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Home » Articles » Managed service provider: Definition, types, and pricing model

Managed service provider: Definition, types, and pricing model

Managed service provider Definition, types, and pricing model

Technology is crucial to the daily operations of businesses of all sizes. Every business now relies heavily on technological resources, such as email and file storage and encryption.

Keeping up with new technologies may be challenging for companies because of the high cost of employing a dedicated IT team. A managed service provider (MSP), on the other hand, can help in these situations.

What is a managed service provider?

A managed service provider is a type of third-party provider that offers various IT services to businesses, such as:

  • Network administration
  • Data backup and recovery
  • Cybersecurity
  • Software upgrades

IT services, including infrastructure, security, networking, and applications, were traditionally managed or delivered by a managed service provider.

Today, a company’s managed service provider may also handle human resources, payroll, customer relations, and supplier management tasks. Booth & Partners perfectly exemplifies these modern-day managed services.

After an MSP is chosen and proceeds to service level agreements (SLAs), the service provider will thoroughly analyze outsourced operations. 

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This helps a managed service provider determine how to maximize their resources while keeping expenses low and boosting productivity.

What is a managed service provider?

Types of managed service providers (MSPs)

Here are the different types of managed service providers:

Full-service MSPs

This managed service provider covers everything from hardware and software procurement to network management and cybersecurity.

Managed service providers in this area offer comprehensive services — making them an ideal choice for businesses that want to outsource all their IT and non-IT tasks to a single provider. 

In connection, Booth & Partners’ full-service managed services ensure their client’s IT and non-IT services are optimized for maximum efficiency and productivity.

Cloud MSPs

Cloud MSPs manage cloud-based services, such as software-as-a-service (SaaS) applications and cloud storage. 

This type of managed service provider helps businesses migrate their data and applications to the cloud and ensure that they are secure and accessible at all times.

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Vertical MSPs

Vertical MSPs specialize in serving businesses in a specific industry, like healthcare or finance. Managed service providers in this area have in-depth knowledge of businesses’ unique IT challenges and offer customized solutions to address them.

Managed service provider: Pricing models

The following are the common pricing models of a managed service provider:

Flat-fee pricing

This pricing model entails paying a specific monthly price for a predetermined managed service provider’s availed service package.

Here is the formula for the flat-free pricing model:

Hourly rate x (# of hours worked) + (Materials cost x (Markup percentage)) = Flat-fee price


$100 (Hourly rate) x 8 (# of hours worked) = $800

$8 (Material cost) x 50% = $4

$800 + 4 = $804 (Flat-fee price per month)

Per-device pricing

Per-device pricing involves charging a fixed monthly fee for each device a managed service provider handles, such as a server or a desktop computer. 

This pricing model is ideal for businesses with many devices that must be managed but on a tight budget and can only pay once a month.

Per-user pricing

This managed service provider pricing model allows businesses to charge fees depending on how many people utilize the products or tools. On the part of the managed service provider, sales increase as more employees use the products or devices.

Tiered pricing

As mentioned, a managed service provider can offer various managed services. The tiered pricing model involves charging different rates for different levels of service. This allows businesses to choose the level of service that meets their needs and budget.

For reference, here are some of the customizable managed services that Booth & Partners offers:

  • IT deployment and support
  • KPI development and performance management
  • Employee productivity
  • Employee engagement activities
  • Holistic employee experience
  • Legal and compliance matters
  • Recruitment, HR, and payroll
  • Facilities management
Managed service provider: Pricing models

Booth & Partners offers managed services outsourcing

Booth & Partners’ managed services solution enables you to delegate various business operations to its team of professionals.

This firm also offers a flexible pricing model, allowing you to choose the level of service that best meets your needs and budget.

To hire an experienced MSP, contact Booth & Partners today!

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About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

The #1 outsourcing authority

Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 450+ podcast episodes, and a comprehensive directory with 3,900+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.

“Excellent service for outsourcing advice and expertise for my business.”

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