Managed Services vs In-House IT
Compare outsourced managed services with building an internal IT team. Find the right approach based on your budget, needs, and growth plans.
Head-to-Head Comparison
Key factors to consider when choosing between managed services and in-house IT
| Factor | Managed Services | In-House IT | Advantage |
|---|---|---|---|
| Upfront Costs | Low - monthly subscription | High - salaries, benefits, training | MSP |
| Predictable Expenses | Fixed monthly fee | Variable (turnover, training, tools) | MSP |
| Expertise Breadth | Wide - diverse team specializations | Limited - depends on team size | MSP |
| 24/7 Coverage | Included in most plans | Expensive - requires shifts/on-call | MSP |
| Scalability | Instant - adjust service level | Slow - hiring takes months | MSP |
| Institutional Knowledge | Documented, transferable | Deep but at-risk if staff leave | Depends |
| Response Time | SLA-guaranteed | Immediate for on-site issues | Depends |
| Cultural Fit | External partnership | Embedded in company culture | In-House |
| Control & Oversight | Contractual governance | Direct management | In-House |
| Physical Presence | Remote-first, on-site optional | On-site available | In-House |
True Cost Comparison
Understanding the full cost picture beyond just salaries vs. fees
In-House IT Team
4-person team example
Managed Services
100 users example
Potential Savings: $200K-500K/year
* Costs vary by region, complexity, and specific requirements. Contact us for a personalized assessment.
Three Approaches Explained
From fully outsourced to fully in-house, find the model that fits your organization
Fully Managed Services
Complete IT outsourcing
Outsource all IT operations to a managed service provider. Best for companies that want to focus entirely on core business.
Typical Cost Range
$5K-25K/month
Advantages
- Lowest total cost of ownership
- Access to diverse expertise
- 24/7 monitoring and support
- Predictable monthly expenses
- No recruitment or training burden
Challenges
- Less direct control
- Potential communication overhead
- Dependency on external provider
- May not understand business nuances initially
Ideal For
Best when: IT is not a core competency and you want predictable costs
Co-Managed IT
Hybrid partnership model
Combine internal IT staff with managed services for specialized functions. Best for extending capabilities without full outsourcing.
Typical Cost Range
$8K-40K/month + internal staff
Advantages
- Keeps institutional knowledge in-house
- Fills skill gaps without hiring
- Maintains direct control over strategy
- Flexible resource allocation
- Best of both worlds approach
Challenges
- Requires clear role definitions
- Potential for overlap or gaps
- More complex vendor management
- Higher cost than pure outsourcing
Ideal For
Best when: You have IT staff but need specialized expertise or coverage
Fully In-House IT
Complete internal team
Build and maintain a complete internal IT department. Best for organizations where IT is a strategic differentiator.
Typical Cost Range
$150K-500K+/year per FTE (fully loaded)
Advantages
- Complete control and oversight
- Deep institutional knowledge
- Immediate physical presence
- Cultural alignment
- Direct accountability
Challenges
- Highest total cost (salaries, benefits, training)
- Limited expertise breadth
- Recruitment challenges
- Single points of failure if staff leave
- Difficult to scale quickly
Ideal For
Best when: IT is a strategic differentiator and you have budget for a full team
Key Decision Factors
Consider these factors when deciding between managed services and in-house IT
Budget Constraints
Managed Services
Lower upfront costs, predictable monthly fees
In-House IT
Higher investment but potentially lower long-term costs at scale
Growth Plans
Managed Services
Scales instantly with your needs
In-House IT
Requires planning and hiring lead time
Security Requirements
Managed Services
Access to security specialists and 24/7 SOC
In-House IT
Direct control but expensive to build security team
Response Time Needs
Managed Services
SLA-guaranteed, often 15-minute response
In-House IT
Depends on staff availability and on-call setup
Company Size
Managed Services
Most cost-effective under 500 employees
In-House IT
Becomes viable at 200+ employees with complex needs
Technology Complexity
Managed Services
Broad expertise across technologies
In-House IT
Deep expertise in specific tech stack
Signs You Need a Change
Warning signs that your current IT approach may not be working
Signs You Need Managed Services
- IT staff is overwhelmed or burning out
- Security incidents are increasing
- Compliance audits are failing
- Technology decisions are reactive, not strategic
- Key IT person leaving would be catastrophic
- Struggling to attract or retain IT talent
- 24/7 coverage is needed but unaffordable
- Projects are constantly delayed due to support tickets
Signs You Might Need In-House IT
- MSP response times are too slow for your needs
- Unique technology requires deep specialization
- IT is a competitive differentiator
- Regulatory requirements mandate internal control
- Budget allows for full team with benefits
- Need constant on-site physical presence
- Communication with MSP is consistently problematic
- Business is large enough to justify full team
Not Sure? Consider Co-Managed IT
Many organizations find the hybrid approach offers the best of both worlds. Keep strategic control in-house while leveraging MSP expertise for specialized functions, 24/7 coverage, and scalable support.
Find the Right Model for Your Business
Not sure whether managed services, in-house, or a hybrid approach is right for you? Get a free assessment with a custom cost comparison tailored to your situation.
What you'll receive
No commitment required. Custom analysis delivered within 48 hours.
We Help You Decide
Our assessment covers every angle of the build-vs-buy decision
Cost Analysis
In-house vs. managed TCO
Security Coverage
Gap identification
Infrastructure
Current state audit
Compliance
Framework readiness