Common Business Models

MSPs typically adopt one or more of the following business models

• Break/Fix Model: MSPs provide IT services on an as-needed basis, charging clients for individual services or incidents. This model is less predictable and offers limited recurring revenue. While companies who are living exclusively in this model wouldn’t be classified as a “Managed” Service Provider, many MSPs do still have an element of Break/Fix incorporated into their offering, especially if they are of a lower maturity

• Subscription Model: MSPs offer a range of IT services for a fixed monthly fee. This model provides a predictable revenue stream and encourages long-term client relationships.

• Tiered Service Model: MSPs offer different levels of service (e.g., basic, premium, enterprise) at varying price points. Clients can choose the level that best meets their needs and budget.

• Value-based Model: MSPs charge clients based on the value delivered or the outcomes achieved, rather than the specific services provided. This model aligns the MSP's interests with the client's and encourages long-term collaboration.