Buyer guide
Managed IT versus break-fix
The usual framing is cost, and it is the wrong one. The real difference is that the two models put the provider's financial interest on opposite sides of the question of whether your systems work. Everything else follows from that.
The core difference
Break-fix pays a provider most in the months your systems behave worst.
A flat fee only becomes profitable once the environment is stable. That is the entire argument, and it is a strong one.
Eleven dimensions, side by side
Cost sits at the top because it is what most buyers compare first. It is arguably the least important row on the table.
| Dimension | Managed | Break-fix |
|---|---|---|
| Billing | Flat monthly fee, predictable | Hourly, unpredictable, highest in bad months |
| Provider incentive | Earns more when systems are stable | Earns more when systems fail |
| Your incentive | Call early, faults stay small | Delay calling, faults compound |
| Monitoring | Continuous, faults found before users notice | None. You are the monitoring |
| Patching | Scheduled and reported | Whenever someone gets round to it |
| Backups | Managed and restore tested | Usually running, rarely verified |
| Security tooling | Included and centrally managed | Whatever came with the machine |
| Documentation | Maintained as a deliverable | Lives in one technician's memory |
| Response | Contractual target | Queue position depends on who else called today |
| Cyber insurance | Usually satisfies the questionnaire | Frequently fails it |
| Budgeting | One line, known twelve months out | Impossible to forecast |
The cost comparison people get wrong
Comparing a monthly managed fee against last year's hourly invoices understates the gap, because the hourly invoices only record the hours somebody billed for.
They do not record:
- Staff time spent working around a fault instead of raising it
- Revenue lost while a system was unavailable
- The incidents that a patched, monitored environment would have prevented entirely
- The cost of the outage that has not happened yet
A fair comparison runs over three years and includes at least one significant incident, because over a long enough period every environment has one. If your model assumes zero incidents, it is not a model of the real world.
When break-fix is still the right answer
Managed services are oversold. There are businesses where the arithmetic genuinely does not work, and a provider who will not say so is selling rather than advising.
- Under about five people, entirely cloud based, with no server and no shared infrastructure
- No compliance obligation and no cyber insurance policy with security requirements attached
- A genuinely technical owner who handles patching, backups and identity themselves
- A business winding down or being sold within the next year
- A single purpose site, such as a small retail unit running one point of sale terminal
If two or more of those describe you, hourly support from someone competent is a perfectly rational choice. Revisit it when you add a server, take on a compliance obligation, or pass roughly ten people.
Common questions
Answered before you ask.
Is managed IT always more expensive?
Over a single quiet month, usually yes. Over three years, usually no, once you include the incidents that would not have happened, the downtime that would not have occurred, and the hours nobody billed you for because they were spent by your own staff working around a problem. The comparison is only meaningful across a period long enough to include at least one bad month, because break-fix pricing is designed around bad months.
Can we start with break-fix and switch later?
You can, and many businesses do. The cost of switching later is that the first 90 days of a managed engagement are more expensive and more disruptive on an environment that has been reactive for years, because there is more to document, more to patch and more to fix before anything can be stabilised. Some providers charge a higher onboarding fee for exactly this reason, and it is a fair one.
What about a hybrid, where we pay monthly for monitoring only?
Monitoring only agreements exist and they are better than nothing, but they create an odd split: the provider sees the problem and then bills you hourly to fix it. If the monitoring fee is small and the hourly rate is where the money is made, the incentive has not really changed. Look at what proportion of the provider's revenue from you would be recurring against reactive.
Does break-fix affect our insurance?
It can. Cyber insurance questionnaires increasingly ask about multi factor authentication, endpoint detection, patch cadence, offsite backups and security awareness training. Break-fix arrangements rarely maintain those consistently, and answering the questionnaire inaccurately is a worse outcome than a higher premium, because it can affect whether a claim is paid.
Read next
Work the numbers before you decide.
What managed IT services cost in Tacoma
Per user pricing bands, what moves the number up, and how to read a quote.
In-house, outsourced or co-managed
The fully loaded cost of one internal hire against a contract.
What is included in managed IT services
A line by line scope, including the exclusions most contracts hide.
IT support and help desk
Tiered support with published response targets, remote and onsite.
Co-managed IT
Tooling, escalation and coverage that support an internal IT lead.
Not sure which side of the line you are on?
The assessment documents your environment and gives you the honest answer, including if that answer is to stay where you are.