Cloud Services Will Kill MSP Per Device Pricing Model

Cloud computing and hosted services are killing or squeezing per-device pricing models for managed services providers (MSPs). The big theme is per-user pricing among MSPs at an HTG Peer Group meeting.

Joe Panettieri, Former Editorial Director

August 14, 2013

1 Min Read
Cloud Services Will Kill MSP Per Device Pricing Model

Perhaps the headline overstates the situation. But during a few casual conversations today at HTG Peer Group meetings today in Omaha, I heard a clear trend: The vast majority of managed services providers (MSPs) are charting a course to per-user pricing. The reason: Cloud computing in some cases is killing the classic per-device pricing model.

My belief: The trend toward per-user pricing will further accelerate because:

  • Desktop as a service (DaaS) is finally taking root with some MSPs, thanks to solutions like independenceIT, among others.

  • Each end-user now has multiple devices — desktop, notebook, smartphone, tablet. Charging a dollar here and there for each device is no longer manageable.

  • Cloud computing is starting to deeply pressure server sales and on-premises server management. And the cloud also spreads information access to all sorts of devices — not just desktop PCs.

  • Some MSPs here are charging a top-line fee — say, $3,000 for up to 30 users. The fee remains $3,000 per month even if the customer has only 20 or 25 users. The fee doesn't change until the customer pushes beyond 30 employees.

  • Charging a base, dedicaeted fee for mobile device management has not really taken off among many MSPs. Hence, MSPs are bundling the mobile management charge into a monthly per-user cost.

Will per-device pricing stick around in many niches? Absolutely. A lot of MSPs here say they can continue to generate healthy per-server management fees. But overall, the cloud's impact on pricing models is a key topic here. And the march toward per-user pricing seems clear.

Read more about:


About the Author(s)

Joe Panettieri

Former Editorial Director, Nine Lives Media, a division of Penton Media

Free Newsletters for the Channel
Register for Your Free Newsletter Now

You May Also Like