When you’re looking for outsourced IT solutions for your business, there are really only two options for you: break/fix IT services and managed IT services.
For a long time, almost all outsourced IT was break/fix, but recently, managed IT services have become the dominant format when businesses are looking to offload their internal operations to people with more expertise in the highly technical arena of IT.
The main reason for this change is cost – with managed services becoming more and more affordable, they simply offer so much more value to most organizations than a break/fix model.
Let’s take a look at both models and see what they offer – so you can understand the pros and cons of both as you look to outsource your IT to an external vendor.
Break/Fix and Managed IT Services: A Brief History
Where did the break/fix and managed IT methodologies appear? How has technology shaped our need for IT services? To answer that question we have to go back, way back, to the magical era of the early 1990s!
Origins of Break/Fix
The break/fix support system has its roots in the early days of IT support. As technology began to play a more integral role in businesses, there was a need for professionals who could address and fix IT issues as they arose. This reactive model was simple: when something broke, you called someone to fix it.
Popularity in the 90s and Early 2000s
During the internet and PC boom of the 90s and early 2000s, IT support services were predominantly break/fix. This era was madness in the world of IT – many businesses were beginning to adopt IT and internet systems en masse for the very first time, and chaos reigned in the world of IT solutions.
The common practice at this time was for companies to hire IT professionals to set up their systems, and then call upon them again if and when issues occurred. This model was straightforward and seemed cost-effective for the technological load of this era.
The world wasn’t nearly as reliant on 24/7, always-on, everything-in-the-cloud technology, as businesses only paid for services when they needed them, and as is the case throughout human history, good enough is good enough…until it isn’t.
The Growth of Managed IT Services
Early Beginnings
While the break/fix model was dominant in the early days of the internet, the seeds of managed IT services were being sown. A natural shift from a reactive approach to a more proactive one began to occur, driven by the new demand for 24/7 IT operations for businesses of all kinds.
Companies across the world saw the obvious: instead of waiting for problems to occur, why not prevent them in the first place? And maybe we can even save money while doing it? A novel idea indeed.
Evolution in the Late 2000s
By the late 2000s, technology had become even more ingrained in business operations and it certainly wasn’t a trend that was going to reverse itself anytime soon. Once the iPhone dropped in late 2007, everything went into technological hyperdrive.
The increasing complexity of IT infrastructures meant that waiting for things to break was no longer viable. Downtimes began to result in significant losses, and the unpredictability of the break/fix model became a concern.
Managed IT services began to offer a solution.
Businesses could now have their IT infrastructures monitored and maintained continuously, something that became even more important as smartphones, tablets, and various new devices became a part of companies’ IT ecosystem. Managed IT services not only reduced downtimes but also allowed for better budgeting, as companies paid a fixed monthly fee for services.
The Current State of Affairs: A Move Towards Managed IT
There has been a noticeable and steady migration away from the break/fix model towards managed services over the past decade or so – and you see it in the numbers.
Manage Engine reports that as of 2023, 59% of IT services have adopted the managed service contract model over the traditional break/fix model. Marconet also reports that about 45% of organizations plan to partner with a managed security service provider.
A survey conducted by NinjaOne with over 400 IT service providers worldwide revealed that 71% reported offering a combination of managed services and break/fix support. This data suggests that while the break/fix model isn’t entirely obsolete, it’s clear where the industry is headed.
The Break/Fix Model: A Reactive Approach
The break/fix model, as the name suggests, is a reactive approach to IT support. Here’s how it typically works:
- An IT issue arises.
- The company calls in an external technician or IT support team.
- The technician resolves the issue on-site.
- The company is billed for the time and materials used.
Sounds straightforward, right? But here’s the catch: this model is inherently reactive. It waits for problems to occur and then addresses them. While it might seem cost-effective in the short run, it can lead to unpredictable expenses and potential downtimes.
The break/fix model is quickly becoming a relic from a bygone era. Gartner’s analysis of downtime found that it costs businesses $5,600 PER MINUTE that part or all of their IT systems are down – and that report came out almost TEN YEARS AGO! Imagine how much it costs businesses now, in our digitally-addicted world.
Managed Services: A Proactive Methodology
Managed services offer a more holistic, proactive approach to IT support than the knee-jerk methodology of break/fix. At its core, managed services follow this pathway:
- The IT service provider continually monitors and maintains the company’s IT infrastructure.
- Potential issues are identified and addressed before they escalate.
- The company pays a fixed monthly fee, ensuring predictable costs.
In this system, managed services providers (MSPs) are incentivized to prevent problems, automatically aligning the MSP’s goals and activities with those of the client. This model not only ensures better IT health, around the clock but also offers budget clarity with its subscription-based pricing and ability to scale up or down, depending on your needs.
The Benefits of Managed IT Services
Predictable Costs
One of the most significant advantages of the managed services model is its predictable cost structure, and this is probably the most significant reason you see businesses switching over. In the highly unpredictable environment we live in these days, managers, accountants, and financial experts need to be able to effectively predict and manage costs.
Switching from break/fix to managed IT services is a no-brainer from a cost perspective – it’s more coverage at a price that can be predicted, budgeted, and controlled. It’s a financial controller’s dream, really.
Unlike the break/fix model, where expenses can vary widely based on the severity and frequency of IT issues, managed services offer a fixed monthly fee. This subscription-based pricing provides companies with budget clarity and helps them avoid unexpected IT expenses.
Minimizing The Costs of IT Downtime
As we outlined at the beginning of the article, downtime can absolutely wreck businesses of any size.
The reactive nature of the break/fix model means that companies might have to deal with the fallout from IT problems while waiting for a technician to address the issue – something that can cost businesses millions of dollars per hour!
The whole point of managed services is that the provider can quickly respond to and/or prevent potential system failures, protecting your business from the extreme costs of IT downtime. In addition to just monitoring, they’re usually preventing the problems in the first place with their expert knowledge of an entire organization’s IT systems.
Leverage Expertise and Knowledge
Managed services providers (MSPs) – like us! – often have teams of highly skilled engineers who can address complex IT problems. We know we’re essentially your external IT team, and any good IT team is chock full of IT experts who pool their knowledge together to provide both broad and specific skillsets applicable to any organization.
This expertise is a significant advantage over the break/fix model, where the quality of service might vary based on the technician’s individual skills. With MSPs, businesses have access to a pool of experts who can provide solutions tailored to their specific needs.
An Equal Partner
The break/fix model can sometimes lead to short-sighted decisions. Since work is billed hourly, clients might opt for quick fixes over more comprehensive solutions that might take longer but offer long-term benefits.
Since MSPs are essentially “on retainer”, they are disincentivized to put in quick fixes – because they’re also the ones who have to fix the problem when it inevitably breaks again! Since their salaries aren’t tied to the hours they put in, MSPs are instead incentivized to create robust plans that operate seamlessly 24/7 – because it means less time they have to spend performing surgery on the guts of the server room or tediously digging through lines of code.
In addition to this “in this together” attitude and their technical expertise and craft, MSPs also operate as IT consultants, helping you make the right IT choices for your business. Since they are invested in your business’s success, it’s in their best interest to leverage their knowledge and experience to optimize your IT systems across the board.
Break/Fix Vs. Managed IT Services: The Pros and Cons
Break/Fix Model
Pros:
- Pay-as-you-go: Companies only pay for services when they need them, which makes sense for short-term costs for cash-strapped small businesses.
- No Monthly Commitments: There’s no need for monthly service agreements or contracts.
- Flexibility: Companies can choose which technician or service provider they want to work with each time.
Cons:
Unpredictable Costs: Since you only pay when something breaks, costs can vary widely from month to month, and BIG costs can appear suddenly, with no way to properly budget for them.
Reactive Approach: The model waits for problems to occur before addressing them, which can lead to longer downtimes.
Potential For Short-Term Fixes, Long-Term Problems: Technicians might opt for quick fixes that don’t address the root cause of the problem. Since they’re paid when something breaks and they have to fix it, there’s the potential for technicians to opt for short-term fixes that will then only break down again later…leading to more work for the contractors.
No Continuous Monitoring: Without ongoing monitoring, potential issues might go unnoticed until they escalate to issues that can cost you thousands or millions of dollars.
Managed IT Services
Pros:
- Predictable Costs: Companies pay a fixed monthly fee, making budgeting more straightforward.
- Proactive Approach: MSPs monitor and maintain IT infrastructures continuously, preventing potential issues before they become problems.
- Access to Expertise: Companies benefit from a team of IT experts who are up-to-date with the latest industry knowledge and best practices.
- Enhanced Security: Regular updates, patches, and monitoring ensure that businesses are protected from potential threats.
- Scalability: As a business grows, managed services can be scaled to meet increasing IT demands.
- Less Work From You: With comprehensive coverage of your IT systems, working with an MSP simply requires less work from you and your team. They handle most of the heavy lifting, allowing you to fill your time in more productive ways.
Cons:
- Monthly Fees: Even if no issues arise in a particular month, companies still pay the fixed monthly fee. It’s a bit like insurance…only more active!
- Locked into Contracts: Some MSPs might require businesses to commit to long-term contracts.
- Potential for Overprovisioning: There’s a risk that companies might end up paying for more services than they actually need. That’s where flexible, scalable pricing plans come in.
Why the Shift from Break/Fix to Managed Services?
Several factors are driving businesses away from the break/fix model and towards managed services:
- Misaligned Incentives: In the break/fix model, service providers only get paid when problems arise, creating a potential conflict of interest.
- Unpredictable Costs: With break/fix, costs can vary widely, making budgeting a challenge.
- Reactive vs. Proactive: Managed services aim to prevent issues, while break/fix addresses them after they occur.
- Comprehensive IT Support: MSPs offer a more robust IT environment, managing various aspects like network performance, security, and backups, as well as providing expert advice and strategic planning.
Parting Thoughts
It’s clear that managed IT services is not only a smart decision for most businesses when you compare it to break/fix, it’s readily apparent that the death of break/fix as a model is coming soon.
When you take into consideration just how costly going offline is these days – and how expensive IT infrastructure is in general – you’d be mad not to hire an MSP. The cost/benefit of hiring an MSP continues to make more and more sense relative to the costs of break/fix or internal IT teams.
As we continue to trek into the future, the reality is that break/fix is going to die out. There’s no stopping our reliance on always-available, 24/7 internet access. In the face of this demand, there’s no question that a simple break/fix IT solution is quickly becoming an obsolete model for businesses of all sizes.
If you need a reliable, experienced MSP partner for your business – give us a call today!