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MSP Pricing: A Comprehensive Guide to Managed IT Services Pricing Models, Revenue Streams, Rates, Margins and More

01. Introduction

With the peak of the COVID-19 pandemic behind us, its profound impact on the way businesses operate and prepare for emergencies continues to be felt. Moving into a post-pandemic world, we can be sure of one thing - many developments will continue to impact managed service providers (MSPs) as they encounter an eclectic mix of evolving challenges and opportunities that lie ahead.

As businesses adopt long-term remote and hybrid work cultures, there is a growing demand for certain managed services that can help businesses streamline this transition. MSPs need to identify those opportunities and make the most of them by providing unique solutions to fit their clients' unique requirements and business goals.

02. MSP Pricing: A Few Questions

In this comprehensive guide, we will review the key findings from our 2022 Global MSP Benchmark Survey Report and examine what affects the pricing of managed solutions and what MSPs can do to boost profitability in 2022 and beyond.

More than 1,200 MSPs and technician firms from 40 countries took part in the survey. About 82.5% of MSP respondents were from the Americas region, which includes the United States, Canada and Puerto Rico, over 11% were from Europe, Middle East and Africa (EMEA), and the remaining 6.3% were from Asia Pacific (APAC).

EME A A P A C Americas 82% 6% 11%

About 67% of MSP respondents described themselves as general purpose while 17% described themselves as managed security service providers (MSSPs). About 12% of the MSP respondents described themselves as network and data center focused while the remaining 4% said they specialized by market vertical.

MSP Respondents' Profile20222021
Managed security service provider (MSSP)17%19%
Network and data center focused12%11%
Specialized by market vertical4%7%

In this article, we will address many of the questions MSPs and their clients have about how to price managed services such as:

  • How are MSPs paid?
  • How do MSPs make money?
  • How much does an average MSP charge?
  • How profitable is the average MSP?

Let's dive in to get valuable insight into what makes an MSP profitable while still making it the top choice of customers in the market.

How are MSPs paid?

Pricing is a crucial aspect of an MSP's profitability and revenue, and as such it requires careful consideration. Furthermore, MSPs must consider the customer profile and demand patterns before deciding which pricing systems to use. A strong pricing model should be suited to your business's current needs while also capable of scaling and adapting to future demands.

MSPs have a choice of multiple pricing models they can implement to bill clients for their services. The pricing model of choice usually varies with industry focus and the region the MSP serves. That said, some of the most popular pricing models are:

  • Per-device
  • Per-user
  • Combination of per-user and per-device
  • Tiered bundles for managed services
  • Value-based (fixed-fee subscription)
  • A la carte

Learn more about MSP pricing models and see what respondents had to say.

The 2022 Global MSP Benchmark survey results show billing models to be fairly evenly distributed among respondents, demonstrating that there is no one-size-fits-all model. According to the survey results, nearly one-quarter of MSPs have implemented a combination of per-user and per-device pricing models. More than one-fifth have implemented a per-user pricing model to bill customers, while 11% bill their customers based on an a la carte pricing model.

How do MSPs make money?

MSPs typically earn revenue based on the services they provide to their customers, although how they charge for those services varies quite a bit. Given that many organizations have transitioned to long-term hybrid or remote work, security has become one of the highest revenue-generating services for MSPs. Almost two-thirds of respondents said their services revenue for security has increased in the 12 months prior to the survey as compared to the previous 12 months.

Cloud management is another service through which MSPs are earning a major portion of their revenue. Infrastructure monitoring and management (including server support), desktop support, network and connectivity support, and business continuity and disaster recovery are also among the top six categories for which MSPs had their service revenue go up in the 12 months prior to the survey.

Other popular services MSPs earn revenue from include hardware/software resale, application management, compliance management and mobile device management. Learn more about MSP revenue streams and see what respondents had to say.

How much does the average MSP charge?

MSPs use several pricing models to bill their clients. Two of the most common models are per-device and per-user. In these models, MSPs bill their clients based on the services they offer per device or per user, respectively.

According to our survey results, nearly one-third (32%) of respondents that offer per-device pricing charge their customers between $51 and $100 per device, per month for ongoing support and maintenance. When it comes to per-user pricing, 26% of respondents charge their customers between $51 and $100 per user, per month for their services. Learn more about MSP rates and see what respondents had to say.

Are MSPs profitable?

Profitable growth is one of the fundamental goals of all MSPs. However, achieving it is not as straightforward as it may seem. Pricing your services both competitively and with scalable margins are imperative to ensuring you make (and grow) profits from the services you provide to your customers.

The quality of service delivery and pricing are crucial to an MSP's profitability and revenue. Being able to balance both simultaneously requires careful consideration. Flexibility and variety in pricing are the two key factors customers find most attractive in an MSP. Learn more about MSP margins and see what respondents had to say.

We will now discuss the key factors that impact MSP profitability and how you can adjust your pricing models, revenue streams, pricing considerations and margins to boost your bottom line. Read on to find out how top MSPs price their services to ensure sustainable growth and profitability in the long run with comprehensive statistics from our 2022 Global MSP Benchmark Survey Report.

03. MSP Pricing Models

Pricing plays a pivotal role in determining an MSP's revenue and profitability. To achieve sustainable growth and earn consistent profits, you must ensure that you bill your clients accurately for your services each and every month.

There are a host of pricing models that MSPs implement, depending on their unique business needs. In this section, we will walk through the different pricing models that MSPs use to bill their clients.


One of the most popular pricing models among modern MSPs is the per-device pricing model. In a per-device pricing model the MSP charges a fixed fee, often monthly, for each device it supports. The per-device pricing model provides MSPs with tremendous flexibility and is simple for clients to understand. The flat fee varies with the type of device being supported.

On the flipside, this billing structure can become more complicated as clients continue to add more devices, such as smartphones and tablets, to their network or when clients embrace a bring your own device (BYOD) IT infrastructure at their workplace.


Under the per-user pricing model, MSPs typically charge their clients a flat fee for each user they support on a monthly basis. This pricing model is particularly beneficial for MSPs with clients that need every end user to stay connected with a set number of devices.

This is an easy-to-understand and flexible pricing model. Additionally, it's easier for clients to modify an agreement based on the growth and evolution of their business. One drawback of this model, however, is that MSPs risk a fluctuating revenue stream dependent on their client's employee base and hiring plans as well as device additions that may increase costs without added revenue.

Tiered (a.k.a. bundle)

One of the more popular pricing models among MSPs, the tiered model involves building several bundled service packages. The prices of these tiered bundles vary from one tier to another as the types of support and services provided transition from basic to premium. In other words, more expensive packages provide a greater number of services to the client.

Under the tiered model, businesses enjoy the flexibility to upgrade or downgrade their chosen bundle according to their evolving needs and budget patterns. For MSPs tiered pricing that offers multiple levels of support can be difficult to manage as opposed to a unified streamlined service offering.


Also termed as “cake” pricing, the value-based pricing model is a flat-fee model wherein an MSP provides all its services at a single fixed rate. Essentially, an MSP acts as the extension of its client's IT department and takes care of the latter's IT environment.

One of the benefits of value-based pricing is that it is one of the easiest models for busy MSPs to adopt to manage their clients. However, this pricing model can cause confusion among clients since they never get to know the price of each individual service provided. It also risks escalating MSPs costs when unforeseen issues arise.

A la carte

Under the a la carte pricing model, an MSP offers specific services that address clients; specific needs. These services include patch management, managed backup, and disaster recovery. Under this model, the client has the freedom to create a customized package for their business by picking out the services they need.

According to our survey findings, the majority of the MSPs implement a combination of per-user and per-device pricing models. Under this combination model, customers get tremendous flexibility and the “best of both worlds” that attracts them to MSPs that offer it. The per-user (all-in-seat price) and per-device pricing models are the other two popular models that MSPs prefer to use to bill their clients. Both models are simple for the customer to understand and make it easy for MSPs to keep track of services provided and bill their customers more efficiently. They also provide a steady cadence of monthly recurring revenue (MRR).

Predominant billing models for MSPsAll Respondents
Combination of per user and per device22%
Per user (all-in seat price)21%
Per device17%
Value-based (fixed fee subscription) managed services15%
Tiered bundles for managed services (e.g. Gold, Silver, and Bronze)12%
A la carte11%

Value based (fixed-free subscription) managed services is another emerging pricing model that MSPs leverage to bill their clients a flat fee for all the services provided. Tiered bundles for managed services are also an attractive billing model for customers that want greater flexibility to choose a custom bouquet of services at a pre-defined rate. This model provides customers with the flexibility to upgrade or downgrade their chosen bundle based on evolving business needs.

04. MSP Revenue Streams

As mentioned earlier, MSPs depend on revenue earned from the services they provide to their customers. With the peak of the pandemic seemingly behind us, SMBs that survived have largely recuperated from the impact and are now focused on long-term growth and expansion. These businesses need the support of MSPs to manage their IT infrastructure, boost efficiency and secure their critical data while they focus on more strategic, revenue-generating activities.

We asked the respondents to share with us whether their revenue in a particular service category went up, down or stayed flat in 2021. This is what they said:

Service CategoryUpFlatDownNot Applicable
Cloud management51%32%6%11%
Infrastructure monitoring and management (including server support)48%38%6%8%
Desktop support47%38%7%8%
Network and connectivity support46%41%5%7%
Business continuity and disaster recovery42%44%5%9%
Hardware/software resale39%36%14%11%
Application management34%41%3%19%
Compliance management32%41%6%21%
Mobile device management30%41%7%23%

Security Services

Security is the top-performing service category for MSPs, with nearly two-thirds of respondents recording a significant upward trend in service revenue over the prior year. This is not surprising given that most businesses have embraced long-term remote or hybrid work, which leads to greater security risk for them. There has also been a significant increase in the number of ransomware and other malicious cyberattacks over the past couple of years. As such, security continues to reign supreme as the frontrunner among the most high-in-demand managed services. It provides a growth opportunity for MSPs that offer these services and is a deficit for those that do not.

Cloud Management

With most businesses leveraging the power of the cloud, MSPs have a tremendous opportunity to provide cloud management services to their clients. Cloud management includes monitoring and managing the client's cloud infrastructure by providing managed services such as computing, cloud security, network operations and storage. More than half the MSPs surveyed (51%) said that their service revenue for cloud management has gone up over the prior 12 months.

Infrastructure Monitoring and Management

Infrastructure monitoring and management is another mission-critical managed service MSPs offer to their customers. This service includes the collection and analysis of data from a client's IT infrastructure, processes and systems, and utilizing it to enhance business outcomes and propel value across the organization. Almost half of the MSPs surveyed (48%) said that their service revenue for infrastructure monitoring and management went up over the prior year.

Desktop Support

MSPs offer desktop support to their customers to help them resolve any issues end users might be facing with their workstations. Nearly half of the MSPs surveyed (47%) said their service revenue for desktop support went up over the prior year. This uptick could be attributed to the fact that most companies have embraced long-term remote or hybrid work.

Network and Connectivity Support

As the name suggests, network and connectivity support represent services that focus on the maintenance of a business network. Under this category, MSPs provide their clients with services like remote monitoring, troubleshooting, diagnostics, network connectivity, operating system upgrades, scheduling antivirus updates, and application patches. For 46% of MSP respondents, service revenue for network and connectivity support increased over the prior 12 months.

Business Continuity and Disaster Recovery (BCDR)

In conjunction with backup services, business continuity and disaster recovery (BCDR) helps businesses minimize the impact of an unforeseen security event and ensures they can get back up on their feet quickly after a service disruption. Nearly 42% of MSPs said they witnessed an uptick in service revenue from BCDR over the prior 12 months, indicating an increasing demand for this service category among businesses.

Application Management

MSPs offer application management services through which they help maintain and manage custom or third-party software applications for their clients. This includes migrating or managing data, designing or building applications, reporting and analytics, content management, testing, and general maintenance and enhancements. According to our survey report, 34% of MSPs recorded an increase in revenue for application management between 2020 and 2021.

Compliance Management

Regardless of the industry, businesses must comply with an increasing amount of regulatory standards to prevent security issues and avoid non-compliance and consequent hefty penalties. MSPs help customers stay on top of compliance requirements, such as HIPAA, PCI DSS, CCPA and GDPR, with compliance management services. While 31% of MSPs recorded an uptick in service revenue for compliance management over the prior 12 months, 41% of respondents said that their revenue stayed flat.

Mobile Device Management (MDM)

Mobile device management (MDM) is the process by which MSPs help their customers boost corporate data security by monitoring, securing and managing the mobile devices (e.g., smartphones, tablets and laptops) on the latter's business infrastructure. MDM solutions enable MSPs to configure a company's security policies on mobile devices that are used to access sensitive corporate data in the organization. Given the increased use of mobile devices for corporate purposes, 30% of MSPs said that their service revenue in this category went up over the prior year.

According to our survey findings, security has been the number one service category for which most of the MSPs (63%) have recorded an uptick in revenue over the prior 12 months. This boost in revenue indicates businesses are increasingly looking to MSPs to provide them with robust and dynamic security solutions that can protect their remote and hybrid work environments. With most businesses implementing long-term remote or hybrid work models, cloud management emerges as another top performer in terms of service revenue growth, with 51% of MSPs saying that they recorded an uptick in revenue for this category.

The trend of increased remote and hybrid work options also resonates with other service revenue categories, such as infrastructure monitoring and management (including server support), desktop support, and network and connectivity support, recording an uptick in service revenue. The only category for which 14% of MSPs recorded a downward trend is hardware/software resale.

Let's look at the most high-in-demand managed services that presented tremendous growth opportunities for MSPs in 2021.

Most Requested ServicesAll Respondents
Remote Workforce Setup22%
Cloud Migration21%
Business Continuity13%
Email Security11%
Communications Setup8%
Security Awareness Training and Phishing Testing7%
Digital Transformation6%
Password Manager and Identity Access Management5%
SOC Services4%
Dark Web Monitoring3%

According to our survey findings, remote workforce setup, cloud migration and business continuity were the three most requested services over the prior year. The results align with the current theme of most businesses looking for services to support their long-term remote or hybrid work environments. MSPs have a tremendous opportunity to boost their revenue by offering services that can help their customers simplify, streamline and secure their remote or hybrid work setup.

Given that security continues to be a major concern, it's not surprising email security has emerged as one of the five most requested MSP services businesses leverage to combat phishing. Now more than ever, businesses want to ensure that their employees are aware of their security policies and know how to deal with security hazards. As such, security awareness training and phishing testing is a highly requested service MSPs should make sure to offer in their solution stack.

05. MSP Rates

MSPs typically bill their customers based on the pricing model they have implemented. As mentioned previously, there are an array of pricing models that MSPs adopt based on their unique business requirements and business goals. Let's discuss some of the different MSP rates:

Per-user Rates

Under this pricing model, MSPs charge a flat fee per user, per month for ongoing support and maintenance of all devices used by each user. This includes support for office PC, home PC and mobile devices such as smartphones, laptops and the like.

Per-device Rates

MSPs charging per-device rates charge a flat fee per device, per month for ongoing support and maintenance. The price of each device varies based on the complexity involved in managing it. For instance, an MSP might charge more per device for managing a server than a desktop.

Per-hour Rates

Under this model, MSPs charge customers on an hourly basis, depending on the services provided.

Per-month Rates

As the name suggests, under this model, MSPs charge their customers on a monthly basis, depending on the services provided.

According to our survey findings, 26% of the MSPs said that they have implemented the per-user pricing model and charge their customers between $51 and $100 per user, per month for ongoing support and maintenance. Around 43% of the MSPs charged their customers between $101 and $300 per user, per month.

Per-device pricing modelAll RespondentsAmericasAPACEMEA
$51 - $100/device/month32%30%36%43%
$101 - $150/device/month16%17%16%7%
$151 - $200/device/month11%12%6%6%
$201 - $250/device/month7%8%5%4%
$251 - $300/device/month4%4%4%3%
More than $300/device/month1%2%1%0%
We do not offer per-device pricing29%27%32%38%
Per-user pricing modelAll RespondentsAmericasAPACEMEA
$51 - $100/user/month26%23%31%40%
$101 - $150/user/month20%21%27%8%
$151 - $200/user/month12%14%6%3%
$201 - $250/user/month7%7%4%4%
$251 - $300/user/month4%4%1%3%
More than $300/user/month1%1%5%1%
We do not offer per-user pricing31%30%26%41%

Among the MSPs charging their customers based on the per-device pricing model, 32% charge between $51 and $100 per device, per month for ongoing support and maintenance. Another 38% charge their customers between $101 and $300 per device, per month.

06. MSP Margins

Pricing plays a pivotal role in the profitability of your MSP business. Our survey results indicate that more than a quarter (28%) of the respondents reported an average MRR between $1,001 and $2,500 of monthly managed services contract per client. Interestingly, 35% of respondents reported an average MRR between $2,501 and $10,000 per client.

Average size of your monthly managed services contract per client20222021
Up to $1,00019%23%
$1,001 - $2,50028%28%
$2,501 - $5,00024%21%
$5,001 - $7,5009%9%
$7,501 - $10,0002%2%
More than $10,0004%3%
Not applicable14%12%

In addition, survey results reveal more than half (51%) of the respondents reported average MRR growth of 6% to 15% over the past three years. This indicates MSPs are experiencing consistent growth in customer base as well as profitability.

Average MRR growth over the past 3 years20222021
Less than 0%4%6%
0% - 5%17%17%
6% - 10%32%28%
11% - 15%20%20%
16% - 20%13%13%
More than 20%15%16%

About 30% of MSP respondents have a gross margin between 11% and 20% for cloud services they offer. The percentage of respondents with a cloud services gross margin above 30% has increased slightly from 19% to 22%.

Gross margin range for cloud services20222021
Less than 5%5%7%
6% - 10%13%20%
11% - 20%29%25%
21% - 30%21%20%
31% - 40%9%9%
40% - 50%6%5%
More than 50%7%5%
We do not offer cloud services at this time9%10%

07. Price for profitability and increase revenue with Kaseya

When it comes to MSP profitability, pricing plays a critical role. Pricing your services right and charging your clients appropriately can help you not only stay competitive in the market, but also boost your profits and drive growth.

Kaseya's revolutionary solutions help MSPs cater to the evolving service needs of their customers to stay relevant. With Kaseya's solutions, you not only simplify, streamline and secure your clients' IT environments, but also gain a competitive edge over your peers and expand your customer base.

Discover how much you can save in money and time by deploying a Kaseya solution with our ROI calculator.

For a more in-depth understanding of today's MSP landscape and the latest trends for profitability growth, Download the 2022 MSP Global Benchmark Survey Report.