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MSP Pricing: Are Hourly Support Rates Still Too Low?

Many MSPs are setting hourly support rates too low, and aren’t charging customers enough for their services, according to business intelligence and industry benchmark data from Atera.

According to the data, Atera says:

  • 45% of MSPs charge between $45-$99 per hour;
  • 55% of MSPs charge between $100-$155 per hour.
  • The remaining 5% are charging between $200-$250 per hour because they are offering an added expertise or special service.
  • In analyzing the data, it indicates that 45% of MSPs have an opportunity to double their revenue by improving their response rate.

When it comes to response rate, MSPs who respond to customer tickets within 20 minutes see the most success and return business, Atera adds.

MSP Hourly Rates: Missing the Point?

I could be wrong, but I believe most MSPs should be more concerned/focused on per-user and cloud pricing models (on-demand, reserved instances, spot pricing, prepaid consumption, etc.) rather than age-old hourly rate discussions. Also, I’m not sure if Atera’s data leans toward small, midsize or large MSPs — though I suspect the answer involves smaller VARs that are shifting to the MSP model.

Despite my spin, I realize hourly pricing benchmarks can help resellers, VARs and MSPs to weigh their rates vs. industry norms and emerging trends. And broader MSP-oriented benchmarks certainly aren’t new.

Kaseya has run an annual MSP pricing survey and published results for several years. And consulting organizations/peer groups like HTG Peer Groups, Service Leadership Inc. and  TruMethods gather benchmarking information from their members and share it on some fronts — though some of the data is never released publicly.

It’s a safe bet Atera will publish additional benchmarks. The company has a wealth of data gathered from MSPs and resellers running Atera’s PSA (professional services automation) and RMM (remote monitoring and management) platforms.

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2 Comments

Comments

    Dustin Bolander:

    I’d be curious to see what the breakdown is for various services too. As an example, we’re 95% recurring revenue, but when needed our “standard” hourly rate is $160, this is typically for out of scope requests from clients. Project engineering is $225, its not work we seek out so the rate is high to make it worth our while. A local competitor who just wants to churn through as many hours as possible is $125/hr across the board since that is their focus.

      Joe Panettieri:

      Dustin: Thanks for adding more data points to the conversation.

      At a time when Rackspace and the guy down the street both claim to be MSPs, it’s difficult to really pinpoint what the financial metrics mean without some “company size” and “services offered” context from the research reports in the market.

      FYI: We’ll share some vertical market MSP stats/revenue figures during ChannelE2E’s webcast on Thursday. And we’ll keep exploring the pricing metrics that readers, researchers and vendors share with us. Thanks for reading.
      -jp

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