by The Computing Australia Group | 
Most business owners ask two questions about managed IT. What will it cost, and what do we get back? The short answer is that managed IT services cost a predictable monthly fee, while the return comes from fewer outages, leaner licensing and smaller security incidents.
However, the real numbers depend on your business. This guide explains how pricing works, where the savings usually come from and how to test the return with three simple models. As a result, you can compare a proposal against what IT really costs you today.
Updated 30 October 2026
What’s changed in IT costs for 2026
- Microsoft 365 prices rose on 1 July 2026. Business Basic went up about 17% and Business Standard 12%, while Business Premium stayed flat. Existing customers pay the new price at their next renewal.
- Windows 10 security updates got dearer. The first paid year of Extended Security Updates ended on 13 October 2026, and each later year costs double.
- The $20,000 instant asset write-off is now permanent. From 1 July 2026, small businesses with turnover under $10 million can deduct eligible assets under $20,000 straight away.
- Cyber incidents cost more. ASD’s 2024–25 report puts the average small-business loss at $56,600 per report, up 14%.
What managed IT services cost and what’s included
Most providers charge a monthly fee per user or per device. In return, they take responsibility for keeping your technology running, secure and up to date. Fees vary with the number of people, the complexity of your systems and the level of security you need.
A typical managed IT service covers help desk support, monitoring, patching, backups, security tools, vendor management and regular planning. By contrast, hardware, software licences and larger projects are usually quoted separately. Always ask for an itemised proposal, so you can see exactly what is in and out.
Per user
One fee for each staff member, covering all their devices. Simple to budget as your team grows or shrinks.
Per device
A fee for each laptop, server or network device. Suits sites with shared or specialised equipment.
Co-managed
Your internal IT team keeps day-to-day tasks, while the provider adds monitoring, security and after-hours cover.
Where managed IT services cut costs
Savings rarely come from one big change. Instead, they build up across several areas, each of which is easy to overlook when IT is run reactively.
Predictable spend
A fixed monthly fee replaces surprise repair bills, so budgets hold through the year.
Less downtime
Monitoring and patching catch problems early, before they stop people working.
Right-sized licensing
Unused or over-specced licences are removed, and plans match what people actually use.
Planned refreshes
Devices are replaced on a schedule, rather than in a rush when they fail.
Fewer call-outs
Remote support resolves most issues quickly, without paying for a site visit.
Lower security risk
Layered protection reduces the chance and the cost of a cyber incident.
From unpredictable bills to a fixed fee
Under a break-fix arrangement, you pay when something goes wrong. That model has an awkward side effect. Your provider earns more when your systems fail, so there is little reason to prevent problems.
Managed IT reverses that incentive. Because the fee is fixed, your provider benefits when things run smoothly. In practice, that means more time on prevention, such as patching, monitoring and tidy configuration, and less time on emergencies. Our help desk then handles the day-to-day requests that still come up.
For example, a failed server might cost thousands in after-hours labour under break-fix, on top of lost work. With managed IT, early warning signs are usually spotted first, and the repair is planned rather than rushed.
Licensing: often the quickest saving
Microsoft 365 is now one of the biggest line items in many IT budgets. After the July 2026 price rise, Business Basic and Business Standard both cost more at renewal, while Business Premium stayed the same.
That shift makes a licence review worthwhile. In many businesses, departed staff still hold licences, or people pay for features they never use. On the other hand, some teams on Business Standard buy separate security tools that Business Premium already includes. Because the price gap has narrowed, upgrading and dropping those extras can sometimes cost less overall.
Our Microsoft 365 services start with exactly this kind of review. Similarly, if you are considering Copilot, we check who would genuinely benefit before you buy licences for everyone.
Plan hardware refreshes instead of reacting
Old devices are expensive to keep. They break more often, run slower and can fall out of security support. For instance, Windows 10 reached end of support in October 2025. Businesses can still buy Extended Security Updates, but the price doubles each year, so delaying an upgrade gets steadily dearer.
A managed IT provider keeps a register of your devices and plans replacements over several years. As a result, spending is spread evenly and nothing is left running past its safe life. Our IT audits and consulting service can build that roadmap for you.
Timing purchases can also help cash flow. The $20,000 instant asset write-off is now permanent for small businesses with turnover under $10 million, so eligible devices may be deductible in the year you buy them. Of course, check how this applies to you with your accountant.
Downtime and security: the hidden costs
Some of the biggest IT costs never appear on an invoice. When systems go down, staff wait, customers go elsewhere and deadlines slip. Similarly, a cyber incident can mean recovery costs, lost revenue and damage to your reputation.
In fact, ASD’s latest threat report found that the average reported cost of cybercrime for a small business rose 14% to $56,600 in 2024–25. Prevention is far cheaper. That is why cyber security and tested disaster recovery are part of a managed service, not optional extras. For more on this, read how managed IT strengthens your cyber defences.
How to measure the return on managed IT services cost
You do not need a complex spreadsheet to test the value. Instead, three simple models cover most of the benefit. Then compare the total with the annual managed IT fee.
Downtime avoided
Hours of downtime avoided each year × staff affected × hourly staff cost. Add any lost revenue.
Licence savings
Unused or over-specced licences removed × monthly price × 12.
Time recovered
Support tickets per month × minutes saved per ticket × hourly staff cost × 12.
A worked example (illustrative only)
Imagine a 25-person business where staff cost $60 an hour. These figures are hypothetical, so swap in your own.
- Downtime avoided: 20 hours × 25 staff × $60 = $30,000 a year.
- Licence savings: 6 licences × $25 × 12 = $1,800 a year.
- Time recovered: 40 tickets × 15 minutes × $60 = $600 a month, or $7,200 a year.
Total benefit: $39,000. If the managed IT fee were $26,000 a year, the return would be ($39,000 − $26,000) ÷ $26,000 = 50%.
Get the most value from day one
The return also depends on how you start. These steps help you see results sooner:
- Agree clear goals, such as fewer outages, lower licence spend or faster support.
- Record a baseline of current costs, downtime and ticket volumes before you start.
- Review licences and devices in the first month, then remove what you do not need.
- Set a three-year hardware and software roadmap with your provider.
- Ask for a short monthly report on tickets, risks and spending.
- Meet each quarter to review progress and adjust priorities.
Weighing the options? Our guides to in-house vs managed IT and how outsourcing IT saves money go further.
Using AI to reduce IT and admin costs
AI can take repetitive work off your team’s plate. At CAG, we are training models on more than 200,000 historic service tickets to classify, summarise and route requests faster, and our own teams use AI tools every day.
- Workflow automation. We automate slow admin steps such as data entry, approvals and reporting, with staff checking what matters.
- AI assistants. We build assistants that answer common questions and draft routine documents.
- Microsoft 365 Copilot. We have rolled out Copilot for clients, starting with a permissions review so it only surfaces what each person should see.
Our pilots start with one repeated task and are designed to show results within weeks. Explore our AI services →
Talk to our Perth team
Find out what managed IT would cost your business
We will review your current IT spend, licences and risks, then give you a clear proposal with the numbers behind it.
Managed IT services cost: frequently asked questions
How much do managed IT services cost?
It depends on the number of users and devices, the complexity of your systems and the level of security you need. Most providers charge a monthly fee per user or per device, so ask for an itemised proposal to compare like with like.
Is managed IT cheaper than hiring an IT person?
Often, for small and mid-sized businesses. One salary buys one person’s skills and hours, whereas a provider gives you a team, specialist tools and after-hours cover. Some businesses combine both in a co-managed model.
What is not included in a managed IT fee?
Usually hardware, software licences and larger projects, such as a cloud migration or office move. These are quoted separately, so check the scope before you sign.
Can we claim new IT equipment under the instant asset write-off?
Possibly. From 1 July 2026, small businesses with turnover under $10 million can immediately deduct eligible assets costing less than $20,000 each. Check the details with your accountant.
How soon will we see a return?
Some savings, like removing unused licences, can appear quickly. Others, such as fewer outages and incidents, build over the first year as problems are prevented.
Should we upgrade to Microsoft 365 Business Premium?
It is worth modelling. After the July 2026 price changes, the gap between Business Standard and Premium is smaller, and Premium includes security and device management that can replace separate tools.
Sources and further reading
- Microsoft Tech Community — Microsoft 365 pricing and packaging updates (December 2025)
- Microsoft Learn — Extended Security Updates program for Windows 10
- Australian Taxation Office — $20,000 instant asset write-off
- Australian Signals Directorate — Annual Cyber Threat Report 2024–25
This guide is general information, not financial or tax advice. Prices quoted by Microsoft are US list prices; Australian prices differ. Last reviewed 30 October 2026.
About the author
Chris Karapetcoff
Director (Client Growth and Success), The Computing Australia Group
Chris has worked with The Computing Australia Group for over 20 years and looks after its client relationships. He helps organisations get outstanding value from their IT spend, with plain-English advice and a complete IT solution they can build on. As he tells every client: your IT system should just work.
