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Three Types of I.T. Companies

Choosing an IT vendor is a big business decision. You need to be able to partner with your IT provider and have common goals with them. There are three service models in the IT market today, and each of them offers different benefits. However, we believe that only one model can truly be aligned with your business goals.

Your Technology Should Just Work

Most business owners we talk to have two main technology goals:

Technology should work and work well. At the end of the day, you want to focus on your customers and running your business. You don’t want to deal with technology problems all day. Your service provider’s primary mission should be keeping you up and running.

When you need help, you need help now. We all know things can’t be perfect all the time. When something isn’t going right, you need help now so that you can get back to your primary mission.

Of course, your goals go deeper than that. For example, we’ve heard time and time again that unpredictable costs and surprise upchrages plague their relationship with their current IT provider.

Let’s evaluate the three types of technology companies you’ll meet, and how they align with these core goals.

The Break-Fix Model

This is the first model that emerged in outsourced IT support. It’s a simple relationship. You negotiate an hourly fee, and call them when you need them. If something breaks, you give them a ring and they get it fixed, billing you for the time you consume.

Before technology was complicated, this model made sense. However, as technology evolves and becomes ever more-involved in business procsses, this model quickly falls apart.


Issues with Break-Fix

Under this model, your provider only gets paid when something goes awry. If you want your technology to work, why reward your service provider every time it breaks? The cost of this model is also completely unpredictable.

Who takes the risk?

You do. When your provider relies on hourly income and things to go wrong, there’s little incentive to make sure things are going right. You’re totally dependent on the speed of their response and your cost is dependent on how long it takes them to get you going again. 

The Managed Service Model

This model emerged in order to “fix” the problems of the break-fix model. A managed service model typically means that you pay your provider a flat fee for the services normally rendered under break-fix. Sometimes you’ll be offered different “tiers” of service. One may include remote support, but no on-site support. Some may include “monitoring” but no labor. 

When talking to a provider who delivers service in exchange for a monthly fee, always ask what’s out-of-scope.

Issues with Managed Service

While the flat-fee for break-fix may seem attractive, there’s a catch. There are often many things “out-of-scope” that are billed by – you guessed it – the hour. This means that things as simple as moving a computer around might not be covered by your monthly fee. As a result, your cost is just as unpredictable as the break-fix model.

Who takes the risk?

You do. While some of your services are covered by a monthly flat fee, it’s hard to know when something is going to be out-of-scope. This means that you might end up with unexpected labor bills or quotes for labor you thought would be covered by your monthly fee. This creates incredible friction in the relationship. 

Managed IT Department

A Managed IT Department (MID) is designed to function exactly as if we’re your internal IT team. We provide 100% of our labor and services for a truly flat monthly fee. Our Stellar IT service has no out-of-scope fees. No project up charges. No hidden fees. Ever. You know exactly what you’ll pay and how it will scale up and down with your business. The only other thing you’ll ever buy from us is hardware and software. An hour of our time is not on the menu.

Benefits of a MID

Our Stellar IT Managed IT Department service is all-inclusive. Period. You’ll never pay extra for our labor. You never have to worry about something being “out-of-scope” when you pick up the phone and call us!

Who takes the risk?

We do. Under this model, our goals and your goals are aligned. We measure our success (and our margins) based on how reliable your network is and the quality of our work.