Goodbye IT Guy, Hello IT Staff: Managed IT Services vs. Hourly Rates

As a business owner, you’re always looking for the best service from your partners while reducing costs and increasing your price margin.

When dealing with an IT contractor, it may be tempting to only call them when problems arise and pay an hourly rate for however long it takes to fix the issue. But, paying an hourly rate can actually increase your costs and cut into your profit margin.

How exactly can switching from an hourly rate system to managed IT services save you money?

Maximize IT Service

First, managed IT services allows you to maximize the amount of service you receive without increasing your costs. Providers typically charge a monthly flat rate fee and in return your IT contractor fixes any problems that arise during your contract. Your IT contractor can address a range of technological issues, regardless of the size.

However, with an hourly rate system, you have to pay your IT contractor every time a problem arises. While an hourly rate system may seem to be advantageous if you only need IT services a few times a year, most businesses need more support than this. Every time an issue occurs, your costs increase when they could have stayed at a flat rate with managed IT services.

To prove how switching to managed IT services saves money, Resource One, Inc. calculated the annual IT costs of companies who switched from an hourly rate to managed IT services. According to Resource One Inc. companies who switched to managed IT services found significant savings.

  • 13 percent cut annual IT costs by an incredible 50 percent or more
  • 46 percent cut annual IT costs by 25 percent or more
  • 50 percent cut annual IT costs costs between 1-24 percent

With almost half of all companies who switch to a managed IT service saving a phenomenal quarter of their IT costs each year, managed IT services is the obvious choice if you want to reduce costs and increase profit margin.

Increase IT Efficiency

Second, managed IT services increase the efficiency of your IT contractor. Obviously, your IT contractor wants to maximize their earning potential, but this desire can either work for or against your business.

With an hourly rate system, the desire of your IT contractor to maximize their services naturally encourages them to take as long as possible to complete a project. By increasing the number of hours they work, they increase how much they are getting paid. While the IT contractor may be satisfied by this arrangement, hourly rates end up costing your business more money and cause longer delays.

With managed IT services, you’re only paying a flat rate so your IT contractor works as efficiently as possible to increase their earning potential. By reducing the amount of time that they spend on your issues, they in essence increase how much they make because they can take on more work and therefore more clients who each pay them a flat rate.

With managed IT services, the IT contractor is able to make more money because they have more clients, while you, the client, are able to pay less for their services. Both parties walk away happier with a managed IT arrangement.


Decrease Downtime Due to Repairs

Thirdly, managed IT services decrease downtime due to technical repairs. Decreasing downtime due to technical repairs is vital to any business because downtime costs more than just the bill you receive from your IT consultant.

Downtime also costs the lost productivity of your employees who can’t work during the downtime as well as significantly damaging the reputation of your company. After factoring in the lost productivity, reputation, and other losses, Evolven calculated that for every hour a business loses to downtime, that business loses between $84,000 and $108,000.

Losing $84,000 is enough motivation for any business to strive to decrease downtime.

So, how do managed IT services decrease downtime for businesses?

As mentioned above, you are more likely to call your IT contractor whenever issues arise because your costs won’t increase. This increases the number of times you work with your IT contractor, which increases your IT contractor’s familiarity with your system. When your IT contractor is familiar with your system, they are better able to quickly identify and repair technological problems, decreasing downtime.

In addition, by addressing all of your technological issues, your IT contractor also has more opportunities to correct small errors before they turn into major problems. As Bill Gates once explained, “Treatment without prevention is simply unsustainable.” By avoiding major problems with preventative measures, downtime due to technical repairs significantly decreases.

While hourly rates may initially seem like a better deal, managed IT services decreases your spending when you actually calculate the costs, it can maximize your return on your IT costs and encourage your contractor to work faster, reducing your overall costs.

Switch to a managed IT service if you want more cost effective service, increased efficiency and decreased downtime.

Microsoft adds new cloud-based tools and machine learning features to Office apps

Microsoft announced that it was updating a host of its Office 365 applications with cloud-based intelligent services that it says will “save you time and produce better results.” Microsoft Word, Outlook, and PowerPoint are all getting updates that could help make users more productive.

The new features, some of which rely on technology like machine learning and natural language processing, will be released in July. Here’s how each application is getting a boost.


Microsoft Word is getting two new services: Researcher and Editor. Researcher is a service that Microsoft said “helps you find and incorporate reliable sources and content for your paper in fewer steps.” By clicking on the feature in the toolbar, users get access to relevant content in a vertical window on the right side of the screen.

From there, they can click to add related material into their Word document. Students and academics will be happy to learn that Researcher will add the properly-formatted citation as well. Researcher gets content from the web through Bing Knowledge Graph, Microsoft will be adding additional encyclopedias and databases. Office 365 subscribers using Word 2016 on Windows desktops can use Researcher now, and it will be coming to mobile devices soon.

Editor is a cloud-based service that adds additional proofreading and editing to your Word document. According to Microsoft, it uses machine learning, natural language processing, and additional input from their linguist team, to help improve a user’s writing.

Users will see the similar colored underlining that currently denotes misspelled words, but they can now use a “Wordiness and Redundancy” option to reduce “the majority of” to “most,” for example. Or, it could show if a user maybe chose the wrong form of effect or affect. Microsoft said Editor will “get better with time,” eventually explaining why certain words might be the wrong choice.


In Outlook, the Focused Inbox feature that was previously available on iOS and Android is coming to Outlook on Windows, Mac, and the web. For those unfamiliar with the tool, it splits your inbox in two, separating your most important emails into your “Focused” tab, while everything else lands in “Other.” As you move emails back and forth, the tool learns what is important and applies it going forward.

Outlook on Windows and Mac for Office 365 users are also getting @mentions to bring certain emails to your attention or “flag actions for others.” According to a blog post announcing the features: “To flag someone, just type the @ symbol in the body of the email and pick the desired person. Their name will automatically be highlighted in the email and their email address automatically added to the To: line.”

The goal of @mentions is to make it easier to sort and filter your emails. Outlook 2016 users on Windows, Mac, and the web have access now, and the feature will be coming to mobile users soon.


The new feature coming to PowerPoint is called Zoom, and Microsoft said it will help users “create interactive, non-linear presentations.” Basically, instead of moving through slides simply from left to right, users will set up a summary slide and be able to “zoom” in and out of each section, in whatever order they see fit.

So, if a user wants to jump back to a sales chart from a previous slide, he or she can now do that without exiting the presentation altogether. This feature could also help in the classroom, as a free form discussion may take the presenter to a later point before he or she planned.