by Ian MacRae
President and CEO, E-N Computers
27+ years experience solving business IT problems in Virginia and Washington, D.C.
Updated March 31, 2026
Outsourcing IT costs different amounts depending on the model, and the cheapest option on paper isn’t always the cheapest in practice. This guide breaks down each one: what it costs, what’s included, and where the hidden risks tend to show up. We use a 40-employee company as the benchmark throughout so you can compare the options consistently.
If you’re still weighing outsourcing against building an in-house team, we have a separate article that compares those costs directly. If outsourcing is already the direction you’re heading, read on.
E-N Computers is a regional managed IT services provider based in Waynesboro, Virginia. I started the business in my garage in 1997, and over the past 29 years we’ve operated under several of the models described below before settling on proactive managed IT as the right fit for most clients. That experience informs this comparison. We’re a top-five MSP in Virginia and a CMMC registered practitioner organization, meaning we’re certified to consult with businesses on security standards set by the Department of Defense.
QUICK ANSWER:
How much do outsourced IT services cost per month?
An all-inclusive managed IT services plan typically costs between $125–$255 per computer-using employee per month. For a typical 40-employee company, this would be about $7,000 per month. Costs can vary within this range depending on existing IT staffing, compliance requirements, and other factors.
Other types of monthly IT outsourcing are retainer-based or basic services for about $1,400 to $2,000 a month for 40 employees. Because these plans aren’t always proactive, they carry the risk of other costs from inefficiency or security breaches.
Table of Contents
- But first, when things go horribly wrong
- Table: Comparison of outsourced IT services
- Managed vs. co-managed vs. break-fix
- Cloud services don’t eliminate IT support
- How much does staff augmentation cost?
- Project-based outsourcing
- Pros and cons of offshore outsourcing
- Real-world savings: How managed IT saves money
- Not sure what IT support should cost for your business?
For the purposes of our comparison, we’ll look at both monthly outsourced IT services pricing, hourly pricing, and project-based pricing. This is definitely a case of comparing apples to oranges, but at least you’ll have an idea of what apples and oranges might cost.
For our example, we’ll use a 40-employee company to compare costs per user where possible. We’ll try to balance each by also highlighting the potential cost of less comprehensive solutions. For example, one cost that is often ignored in IT support are the tools: ticketing systems, hardware and software inventory databases, software deployment tools, remote monitoring and management (RMM) systems. Tools can range from $15–$35 per device per month.
Of course, take this with all the usual disclaimers about how costs vary by location, complexity, expertise, level of service, and so forth.
We’ll compare costs for the following outsourced IT service options:
- Managed services: A proactive approach where an IT service provider takes responsibility for ongoing management and maintenance.
- On-demand or break-fix services: IT support is provided as needed, and clients pay for services on a case-by-case basis.
- Cloud services: Involves outsourcing computing and storage resources to a third-party cloud provider, reducing the need for on-premises infrastructure.
- Staff augmentation: Supplementing in-house IT teams with external professionals to fill skill gaps or handle specific projects.
- Project-based outsourcing: Hiring external expertise for a particular IT project or initiative, often with a defined scope and timeline.
- Offshore outsourcing: Engaging IT services from providers in other countries to benefit from cost savings and access to global talent.
But first, the cost when things go horribly wrong
Before we talk about the cost of outsourced IT, we need to talk about the hidden and ignored costs of doing nothing (or close to it).
Costs of a security breach
Low profile, run-of-the-mill small businesses are the new big target of hackers. Schools, government, and smaller businesses are seen as soft targets because they don’t spend enough on IT.
For example, there was a local company that came to us after a security breach. Hackers infiltrated one computer, which they then used to access human resources and personnel files. They threatened to post salary data online unless this small business paid a ransom. Hackers took down the organization’s 85 computers and their website. The entire incident took nearly a month to recover from.
Including your potential downtime
In a 2024 survey published by ITIC and Calyptix Security, 90% of medium to large businesses reported their cost of downtime as $300,000 or more per hour. To calculate your hourly downtime costs, you need to know your average hourly revenue and average employee compensation. For a company with 20 employees doing $5 million in annual revenue, downtime can cost $3,362 per hour or $27,000 per day.
Use our cost of downtime calculator to get a better idea of what downtime can cost your business.
Hidden costs of inefficiency
Cheaper IT solutions tend to be in the moment – as in fixing an urgent problem or completing a specific project. Proactive, holistic IT costs more up front.
This is where hard-to-quantify costs associated with relying on inefficient or outdated IT solutions need to be included. For example, how much revenue is lost if your warehouse order fulfillment system goes down for an hour? A day? Or how much of your administrative staff’s time is wasted each month searching for files in an outdated document management system?
Small businesses are dealing with rising operational costs from cloud subscriptions. One Roanoke-based client was spending $15,000 a month just on email and another $1,500 on VoIP phones. Some companies are paying for Dropbox, Google Docs, and Office 365. Reducing costs in a cloud-centric world is a definite pain point to consider.
Table: Comparison of outsourced IT services
| Type of outsourced IT | Cost | What’s not included | Example |
|---|---|---|---|
| Managed IT services: Retainer Model | $175 per hour | Excess hours, hardware refreshes, security audits, and upgrades, tools and software | $1,500 per month for 10 support hours, $175 per hour after for a 40-employee company plus $1,000 in tools and potential cost of $300,000 per hour from downtime |
| Managed IT services: Retainer with Monitoring | $175 per hour | Limitations on supported software/systems, additional services billed separately | $2,000 per month for monitoring and break-fix hours plus $1,000 in added tools and software |
| Full Managed IT Services | $125 per user per month | Advanced security for specific industries for an additional cost | $60,000 per year for a 40-employee company |
| Co-Managed IT Services | $75 per user per month | In-house IT salary, specific hardware/software purchases | $91,000 per year for a 40-person company if you include the in-house IT staff salary (almost half the cost of an entirely in-house team) |
| On-Demand or Break-Fix | $75 – $200 per hour | Ongoing support, proactive solutions | $75 – $200 per hour, potential downtime cost of $300,000 per hour, $1,000 or more for tools and added software |
| Cloud Services | $6 to $30 per user using M365 as an example | Data transfer fees, premium module fees, security and compliance upgrades, additional software and tooling | $2,000 per month for M365 and consultant plus $1,000 or more for tooling plus $75 to $200 per hour for on-demand support |
| Staff Augmentation | $50 to $100 per hour | Monitoring tools, help desk, support processes, strategic planning | A temporary full-time L3 technician will cost about $11,200 per month or $134,400 a year. |
| Project-Based Outsourcing | Starts at $10,000 for total parts and labor | Fixed upfront project cost, specific deliverables and expertise | |
| Offshore Outsourcing | $15–$35 per user per month (help desk); 40%–60% than domestic for staff augmentation | Quality control, security risks, data transfer limitations, compliance issues | Savings often offset by coordination overhead, compliance exposure, and higher turnover |
Managed vs. co-managed vs. break-fix IT support
There are three main types of outsourced IT: managed, co-managed, and break-fix. Here’s a comparison of the services and their costs.
Managed IT services
With managed IT services, you’ll find a huge range in both costs and quality of service provided by IT vendors.
The biggest difference in upfront costs from IT MSPs comes from differences in service models. There are three basic ways that most companies offer IT services: a retainer-based model, a retainer-plus-monitoring model, and a fully managed IT service model.
The first model is a basic retainer model – you pay per month for a fixed block of hours and then pay a set hourly rate for work in excess of those hours. A 40-person company may pay around $1,500 per month for a block of 10 support hours, and then $175 an hour after that.
While this model often appears to be the cheapest option, costs can quickly add up for things like hardware refreshes, security audits, and network upgrades. Or, these projects may be neglected or put off for “when we have more hours” – which tends to never happen. Also, these plans rarely include tools or software, which adds more costs that can be hard to track.
The second IT service model includes some monitoring and tooling, usually for a higher fee (around $2,000 per month), as well as a set number of break-fix hours. This offers some improvement over a straight retainer model but often comes with limitations that end up causing the same problems.
For example, it could be that only some of your software or systems are supported – while anything else is considered “out of scope” and billed at the hourly rate. Again, this results in key projects and upgrades being deferred for a lack of hours or budget, which ultimately results in inefficiencies and emergency spend later on.
Both of these IT service models also suffer from a lack of automation, documentation, and proactive leadership. They tend to result in “band-aid” solutions and workarounds, rather than the strategic IT decisions that need to be made in order for a modern business to thrive.
To address the problems inherent in the retainer-based IT service models, some IT service providers (including E-N Computers) have moved toward an all-inclusive managed IT service model. For a flat per-user or per-computer monthly fee, you’ll receive all of the same services typically provided by a large corporate IT department. This includes help desk service, consulting, remote monitoring and management (RMM), as well as the required tools and software.
A fully managed IT service plan typically costs between $125 and $255 per user or computer per month. This range can be influenced by a number of factors. For example, if you have a formally trained IT person on staff already, the cost would typically fall more toward the lower end of the scale. Industries that require more advanced security monitoring and compliance, such as defense contractors, would usually end up on the higher end.
Our typical managed services plan would cost $60,000 a year for a 40-employee company or $125 a month per user.
If your team is using AI tools, factor in Microsoft Copilot licensing ($20–$30/user/month depending on your plan) — governance, security configuration, and the expanded attack surface it creates all add to the managed services scope.
Co-managed IT services
Co-managed IT services allows you to have at least one IT person in house and to offload either daily help desk services or higher-level prevention and planning services to a managed IT services provider. You still have the salary cost of at least one in-house IT person but you avoid the cost of hiring more technicians or managers as your business grows.
It’s almost impossible for one IT person to provide all the specialized knowledge required to care for modern IT needs. With co-managed IT, your in-house staff can get rid of daily work like help desk services so he or she can focus on prevention and planning.
Or, you may want an in-house first-level support technician to handle your day-to-day issues and rely on a managed services provider for specialty knowledge like security, networking, patching, procurement, and so forth.
Our co-managed IT services are $75 per user per month. An in-house first-level IT support person will cost $45,000 to $65,000. This adds up to about $86,000 per year for a 40-person company or $179 per user per month, which is about half the cost of building an entirely in-house team.
On-demand or break-fix IT services
Break-fix services refer to the practice of only calling on a professional IT company when something breaks or when an upgrade is needed.
At one time, this was the common solution for solving IT problems. You get flexibility, and you’re not stuck with a contract. Up front, it’s ‘cheaper’ because you are only paying for the time to fix a problem, not for ongoing support. Generally, hourly rates for break-fix IT services can range from $75 to $200 or more per hour.
While it may sound like a reasonable approach, it’s not an ideal solution in 2026, because you’re reactively responding to issues rather than actively preventing them in the first place. As mentioned earlier, smaller businesses and not-for-profits are a particular target of hackers, and a single incident of downtime or a cybersecurity breach can wipe out your business.
We can’t recommend the on-demand approach, regardless of the up-front cost savings, because of the risk involved and because there are better options for small businesses on a tight budget like a basic managed services plan.
On-demand services for a 40-person company will run $75 to $200 per hour plus an average cost of $300,000 or more in downtime per hour.
Cloud services don’t eliminate the need for IT support
Many small businesses treat cloud services like Microsoft 365 as a substitute for IT support. They figure if there’s no on-premise server to maintain, support costs should be minimal. That’s not quite how it works.
Cloud services do reduce upfront hardware costs. You pay for what you use, scale up or down as needed, and get built-in backup and security measures baked in. For most small businesses, that’s a real advantage. And for most common applications, a good SaaS option exists. We generally steer clients toward SaaS and away from managing their own infrastructure in the cloud, which tends to cost more and require more expertise than it saves.
What cloud services don’t do is eliminate the need for IT support, for at least two reasons.
Security configuration isn’t automatic. Most cloud breaches aren’t the provider’s fault — they happen because of how the customer set things up. Configuring conditional access in M365 alone requires real expertise. If one user clicks the wrong link without those controls in place, the entire organization can be compromised.
Cloud costs also add up faster than most people expect. Data transfer fees, premium module add-ons, unused licenses, duplicate subscriptions — we regularly find clients paying for Dropbox, Google Docs, and Microsoft 365 simultaneously without realizing it. You still need hardware on your end, and someone to procure, configure, and dispose of it securely.
As a cost baseline: M365 Business Standard for 40 users plus a typical IT consulting fee runs about $2,000 a month. That’s before tooling, security configuration, and anything that breaks.
How much does IT staff augmentation cost?
Staff augmentation means bringing in outside IT help for specific tasks or projects without a full-time hire. You get flexibility and pay only for what you need — useful for filling a skill gap or staffing a defined project. The tradeoff: coordination takes more effort, and the expertise walks out the door when the engagement ends. If you need ongoing support rather than a one-time fix, co-managed IT is usually a better fit — it’s a deeper working relationship, and you’re not starting from scratch every time.
Staff augmentation costs between $50 and $100 an hour, depending on the level of expertise required of the technician. A temporary full-time L3 technician will cost about $11,200 per month or $134,400 a year.
Project-based outsourcing
With project-based outsourcing, you pay for the entire project. This includes the specific tasks, expertise, and deliverables outlined in the project scope. The cost is generally upfront and fixed. This model suits businesses seeking a clear budget for a specific project without the burden of ongoing expenses.
The disadvantage we find is that it’s difficult for an IT vendor to jump into an existing IT structure (or lack thereof) and pull off a single project. Projects go better when they are part of a comprehensive plan, which in turn requires an existing in-house IT team or a managed IT services provider.
So, like cloud services, project-based outsourcing is not a true replacement for IT services. But it can be a great way to outsource some of your IT.
At ENC, we offer turnkey IT project management, which includes planning, design, and implementation by our project manager and skilled engineers. Project work includes:
- Onsite work
- M365 migrations
- Operating system upgrades
- SD-WAN setup and SASE setup
Projects at ENC start at $10,000 for total parts and labor.
Pros and cons of offshore outsourcing
The biggest benefit to offshore support is cost. Offshore IT help desk services now run roughly $15–$35 per user per month for basic support, compared to $75–$200 per hour for domestic on-demand services. For staff augmentation, offshore developers and engineers can cost 40–60% less than their domestic equivalents. A second benefit is access to global talent, which matters when domestic hiring markets are tight. The quality of technical help and language skills has made offshore help desks a viable option for some smaller businesses.
Despite those benefits, a report by Computer Economics found that more businesses prefer “nearshoring”, or hiring providers in their same region. Sharing a time zone and language with your IT technician simplifies daytime coverage and clearer communication. Because of that, our clients and many of the prospects we talk to have found that the cons of offshore support outweigh the savings.
Compliance and regulatory exposure
If your business must comply with ITAR, CMMC, HIPAA, or similar frameworks, you may be legally required to work with U.S.-based IT personnel. Transferring data overseas isn’t just a risk — in many cases it’s a violation. Even organizations without formal compliance obligations need to understand what they’re agreeing to before handing overseas contractors access to their systems.
Legal accountability disappears across borders
Even without regulatory requirements, the overseas support model creates a different risk: loss of legal accountability. The United States has systems of accountability. Background checks, employment law, the ability to file a complaint, pursue a civil claim, or simply pick up the phone and talk to someone’s manager are all guardrails that make it safer to hand someone the keys to your organization’s infrastructure.
Those guardrails largely disappear across international borders. “There’s no rule of law,” Ian said. “It’s hard enough to have rule of law in the United States with the costs between jurisdictions and everything to actually file a case.” When your IT support team is overseas, the practical ability to vet, monitor, or hold individuals accountable shrinks to nearly zero.
And the stakes are high. Your IT provider has deep access to everything: financial systems, your email, your file storage, your security cameras. Someone in that position could effectively hold you hostage. Cutting off access is technically an option, but by then the damage may already be done. This isn’t purely hypothetical — we have handled transitions involving bad actors. Whether the threat is internal or overseas, the people with access to your infrastructure need to be people you can actually hold accountable.
Knowledge loss and service continuity
Offshore support models typically use larger pools of technicians without assigning specific people to your account. As a result, no one develops deep familiarity with your environment. One prospect we talked with had been happy with their MSP for many years — until the help desk was outsourced offshore. “The new help desk didn’t know our systems the same way.” That institutional knowledge doesn’t come back.
Onsite support gap
Many of our clients need onsite support when remote tools aren’t enough — equipment deployments, cabling, physical troubleshooting. Offshore providers can’t fill that gap. We primarily serve Virginia, Washington, DC, and Maryland with onsite services, and serve the remainder of the United States with remote support augmented by locally contracted staff. For most of the organizations we work with, the savings on paper don’t make up for the real cost of compliance exposure, accountability gaps, and service continuity.
Real-world savings: how managed IT saves money
As we mentioned, a fully managed IT plan can seem more expensive than an hourly or retainer model. But your total cost of ownership for IT services is not just the check you write to your IT vendor. We’ve seen again and again how our customers have saved money every month by making the switch.
In this example, an 18-user Lexington, VA nonprofit organization was paying their old IT vendor $1,365 a month. Even though ENC managed services plan does run about $1,000 more per month, they were able to immediately realize savings when E-N Computers retired their very expensive legacy phone system and replaced it with a state-of-the-art VoIP system for a fraction of the monthly cost. Additionally, we were able to cut their internet service bill nearly in half. This resulted in a net savings of over $700 per month or $8,500 per year.
Not sure what IT support should cost for your business?
Every organization is different; headcount is just the starting point. Device counts, compliance requirements, platform mix, and your current IT environment all affect what managed IT will actually cost you.
Our pricing calculator walks you through the key variables and gives you a personalized estimate in a few minutes. There’s no sales pitch, and you don’t have to hand over any contact information to get your estimate. Get your managed IT cost estimate →
If you prefer to talk with someone, we offer a free no-commitment consulting session with one of our engineers. We’ll look at your current setup and give our opinion on which IT services you need, and which you don’t.
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