The MSP Pricing Showdown: Per-User vs Per-Device vs All-Inclusive

October 25, 2025

Your pricing model might be costing you money without you realizing it.

That probably stings a little, but most MSP owners have that nagging feeling it's true. You've been running the same pricing structure for years—maybe since day one—and while revenue has grown, margins feel tighter than ever. Your techs are burning out. Some clients eat up way more resources than they pay for. Every time you put together a quote, there's that voice asking whether you're leaving money on the table or scaring off prospects.

Here's the uncomfortable reality: best-in-class MSPs are hitting 50%+ service gross margins according to Service Leadership benchmarks. If you're falling short of those numbers, your pricing model is probably the culprit. The managed services market is projected to reach $640-730 billion by 2030, but that growth only rewards MSPs who have figured out how to price for profitability.

This article breaks down the three dominant MSP pricing models with no sugarcoating. No theoretical nonsense. You'll get real calculations, specific scenarios, and a decision framework you can use this week to figure out if your current approach is building your business or slowly killing it.

What Are the Three Main MSP Pricing Models?

The three primary MSP pricing models are per-device pricing (charging per managed endpoint), per-user pricing (charging per supported employee regardless of device count), and all-you-can-eat or AYCE pricing (flat monthly fee for unlimited support within defined boundaries). Each model has distinct advantages depending on your target market, operational maturity, and client work patterns. Per-user pricing now leads adoption at 42% of MSPs, surpassing per-device as hybrid work transforms how businesses operate.

The MSP Pricing Landscape in 2025

Before we get into the models themselves, let's look at where the industry stands. The managed services market hit around $330-390 billion in 2025 and keeps growing at 10-15% annually, headed toward projections exceeding $640 billion by 2030.

Recent survey data shows 54% of MSPs now blend value-based and cost-plus pricing strategies. The primary model breakdown has shifted big time: per-user pricing is now used by 42% of MSPs, surpassing per-device pricing which has dropped to roughly 13% of MSPs as their primary model.

But those numbers hide something important. Per-device pricing fell from 17% just two years ago. Meanwhile, more than 40% of MSPs have moved to hybrid or combination approaches, accepting that no single model fits every client.

This shift reflects how businesses actually work now. With 52% of remote-capable employees working hybrid schedules and 79% working either hybrid or fully remote, managing discrete devices in fixed locations feels pretty outdated. Your pricing model needs to reflect this reality.

Why Are MSPs Moving Away From Per-Device Pricing?

The decline of per-device pricing stems from fundamental changes in workplace technology patterns. When employees routinely use three to five devices across multiple locations, tracking and billing individual endpoints creates administrative nightmares and billing disputes. Per-user pricing eliminates these friction points by covering all devices a person uses under one fee.

Model One: Per-Device Pricing

Per-device pricing charges a flat monthly rate for each supported endpoint. This model provides straightforward billing tied directly to tangible assets clients can see and count.

How Much Do MSPs Charge Per Device in 2025?

Typical 2025 per-device rates run around $30-50 per month for desktops and laptops, $100-175 per month for servers, and $25-40 for network devices like printers and firewalls. These rates vary based on geographic market, service scope, and competitive positioning.

How Per-Device Pricing Works

The math looks simple enough. A client with 20 workstations, 2 servers, and 5 network devices might come out to:

Device Type	Quantity	Rate	Monthly Total
Workstations	20	$40	$800
Servers	2	$150	$300
Network Devices	5	$35	$175
Total	27	-	$1,275

Count the devices, multiply by your rates, send the invoice. Straightforward.

What Are the Advantages of Per-Device Pricing?

Per-device pricing offers several benefits for the right situations:

Tangible value proposition: Clients get that they are paying to manage specific, physical things. No confusion about what the fee covers because they can point to the devices on the invoice.
Predictable scaling: When a client adds equipment, your revenue goes up proportionally. Every new server or workstation automatically brings more recurring revenue without having to renegotiate contracts.
Works well for stable environments: If you serve industries with fixed infrastructure, think manufacturing floors, medical practices with dedicated workstations, or accounting firms with standardized setups, per-device pricing lines up costs with the actual management workload.
Low barrier to entry: For MSPs just getting started, per-device pricing does not require complicated cost analysis. You can set rates and start quoting pretty quickly without building detailed financial models.

What Are the Disadvantages of Per-Device Pricing?

Per-device pricing struggles in modern work environments for several reasons:

Hybrid work has wrecked this model: When employees bounce between home, the coffee shop, and the office, figuring out which devices are "yours" turns into a nightmare. Personal devices hitting company data, rotating hardware, and BYOD policies create constant billing disputes and administrative headaches.
Clients learn to game the system: You'll see clients delay hardware refreshes, run equipment until it dies, and avoid adding devices to managed coverage because each one bumps up their bill. This runs directly against your goal of keeping environments healthy and standardized.
Device proliferation without matching support needs: A client adding 10 tablets for occasional field use doesn't create 10x the support burden of adding one complex server, but your pricing treats them the same. Either the client gets overcharged or you eat the margin hit.
Market adoption is declining rapidly: Only 13% of MSPs now use per-device as their primary model, down from 17% just two years ago. The industry is moving on.

When Does Per-Device Pricing Still Make Sense?

Per-device pricing can still work if you target traditional businesses with stable, on-premises infrastructure. Manufacturing companies, healthcare practices with dedicated clinical workstations, or professional services firms that supply all employee equipment and ban BYOD remain good candidates.

If you are a newer MSP without sophisticated cost modeling, per-device also gives you an easy starting point that you can refine as you grow.

Model Two: Per-User Pricing

Per-user pricing charges a flat monthly fee per supported employee, no matter how many devices that person uses. This model has become the most popular approach, now used by 42% of MSPs.

How Much Do MSPs Charge Per User in 2025?

Current market rates for per-user pricing fall between $100 and $250 per user per month, with most MSPs landing around $150 to $200 for comprehensive managed services. Basic monitoring and maintenance starts around $50 per user monthly, while advanced packages including cybersecurity, cloud management, and 24/7 support can exceed $250-300 per user.

How Per-User Pricing Works

Using a similar client size as the per-device example, but counting people instead of machines:

Users	Rate	Monthly Total
25	$175	$4,375

That single number covers every device each user touches, whether it is a desktop at the office, a laptop at home, a tablet for travel, or a smartphone for email.

What Are the Advantages of Per-User Pricing?

Per-user pricing aligns with modern work patterns and simplifies operations:

Aligned with how people actually work: When employees use three, four, or five devices across multiple locations, per-user pricing captures what it takes to support that person without line-item arguments. You support the human and their tech needs, period.
Sales gets way simpler: Your sales team can quote based on headcount alone. "You have 40 employees? Your monthly investment is $7,000." No equipment inventories, no device classification debates, no waiting for asset lists that show up incomplete.
Predictable client budgeting: Clients like knowing exactly what they'll pay. HR adds five people? Add $875 to the IT budget. Someone leaves? Subtract it. This predictability builds trust and cuts down on billing friction.
Fewer billing disputes: Per-user pricing generates way less nickel-and-diming from clients. Nobody calls demanding you remove their desk phone from billing or arguing about whether that printer counts as a "network device."
Natural scaling with business growth: As your clients hire, your revenue grows in direct proportion without renegotiation. This is account expansion in its simplest form.

What Are the Disadvantages of Per-User Pricing?

Per-user pricing has limitations in certain scenarios:

Can overprice device-light environments: If a client has 50 employees but they all share a handful of workstations in shifts, per-user pricing charges for support intensity that is not there. Manufacturing or retail environments sometimes fit this pattern.
Requires understanding actual support costs per user: Not all users are equal. Your executive team generates more support tickets than your warehouse staff. Price without accounting for these differences and you might underprice demanding users or overprice low-touch ones.
Power users create hidden costs: Some users run complex software stacks, manage specialized equipment, or need elevated support. Per-user pricing either needs tiers to handle this or accepts that certain users will always cost more than others.
Clients may push back on the value: When a client has employees who barely touch technology, they might question paying the same rate for their part-time receptionist as their full-time accountant.

When Does Per-User Pricing Work Best?

Per-user pricing works best for knowledge-worker-heavy businesses: professional services, financial firms, marketing agencies, technology companies, and any organization where people work across multiple devices and locations.

If you serve SMBs with 25-250 employees and hybrid work is standard, per-user pricing wipes out entire categories of billing complexity while better reflecting actual support costs.

Model Three: All-Inclusive (AYCE) Pricing

All-You-Can-Eat pricing gives unlimited support within defined service boundaries for a single flat monthly rate. This model works like a buffet: clients pay one fee for access to your full range of IT services within agreed parameters.

How Much Do MSPs Charge for All-Inclusive Pricing?

AYCE pricing typically runs from $2,500 to $7,000 per month for small businesses, scaling with organization size and service scope. Some MSPs quote all-inclusive packages at $100 to $250 per user per month, effectively blending per-user structure with AYCE service delivery.

How AYCE Pricing Works

Instead of counting devices or users, you assess the whole environment and quote one comprehensive monthly fee:

Service Package	Monthly Total
Full managed services for 30-person company	$5,500

That covers helpdesk support, monitoring, maintenance, basic projects, and everything else within your defined scope. The client never sees per-ticket charges, hourly bills, or surprise invoices.

What Are the Advantages of AYCE Pricing?

All-inclusive pricing offers significant benefits when executed properly:

Maximum predictability for both sides: Clients can budget down to the dollar. You can forecast revenue confidently. Neither party worries about monthly swings or unexpected costs.
Proactive work makes financial sense: Since your income is fixed, you have a direct financial reason to reduce reactive tickets through better maintenance, documentation, and standardization. This creates a positive cycle where better service delivery improves your margins.
Premium positioning: Flat-rate comprehensive services command premium pricing because they remove risk for the client. Businesses happily pay more for certainty, especially if they have been burned by surprise bills from previous providers.
Simpler operations: Your technicians stop obsessing over tracking every minute and just focus on solving problems. This cuts administrative burden and often improves both employee satisfaction and service quality.
Potential for strongest profitability: When priced right using actual cost data, AYCE models can deliver gross margins exceeding 60% because you control how efficiently you deliver services.

What Are the Risks of AYCE Pricing?

AYCE pricing carries meaningful risks that require operational discipline:

Dangerous if you underprice: AYCE amplifies pricing mistakes. Get the number wrong and every month digs a deeper hole. Unlike per-user or per-device where problem clients show up as high ticket counts, an underpriced AYCE client can quietly drain your profitability for the whole contract term.
Scope creep is a real threat: "All-inclusive" invites clients to push boundaries. Without crystal clear service definitions, you'll end up absorbing work that should be billable projects. That law firm calling their managed services provider to help migrate their case management system? They expect you to handle it because "everything is included." Creating an ironclad scope of work becomes essential with AYCE pricing.
Demands sophisticated cost analysis: You can't quote AYCE without understanding your cost of goods sold, fully-loaded technician costs, and historical service patterns. This model punishes MSPs who lack financial discipline.
Client overconsumption: Some clients will treat unlimited support as permission to submit tickets for everything. Without guardrails, these clients can consume resources way beyond their fees while staying technically within contract bounds.
Advanced services don't fit: Security offerings, specialized projects, and strategic consulting sit poorly with AYCE. The unpredictable costs of deploying new technology, expanding SOC capacity, or running complex migrations make fixed pricing risky for these services.

When Does AYCE Pricing Make Sense?

AYCE pricing fits best when you have mature operations with documented costs, serve small to mid-sized businesses with predictable support needs, and have the discipline to define clear service boundaries.

It works particularly well when you have standardized your client environments and tech stacks, cutting down on the variability that creates cost surprises. If your operations are messy or your cost data is shaky, AYCE will expose those weaknesses fast.

How to Calculate MSP Profitability by Pricing Model

Comparing models in the abstract means nothing without understanding the numbers behind your business. Let's walk through real calculations using current 2025 compensation data. If you want a deeper dive into calculating client profitability, we've got you covered.

How Do You Calculate Fully-Loaded Technician Cost?

Before pricing anything, you need to know what it actually costs when a technician works on a client. This isn't their salary. It's their fully-loaded cost: salary plus benefits plus taxes plus overhead plus tools plus training.

The average MSP technician earns approximately $65,600 annually or $32 per hour in 2025. Here's a realistic fully-loaded calculation:

Cost Category	Annual Amount
Base salary	$66,000
Benefits (health, retirement, etc.)	$13,200 (20%)
Payroll taxes	$5,050 (7.65%)
Tools, training, certifications	$4,000
Allocated overhead (space, management, admin)	$9,000
Total Loaded Cost	$97,250

With 2,080 working hours per year and realistic utilization of 65% on billable work:

Billable hours: 1,352
Fully-loaded hourly cost: $71.93

Round to $72 per hour. That is your baseline. Every hour of technician time on a client costs you $72 whether you bill for it or not.

How Do You Calculate Effective Hourly Rate?

Now measure what clients actually pay per hour of your time. This Effective Hourly Rate (EHR) tells you whether your pricing model is working.

Per-device example:

Client pays $1,275/month. Your team logs 14 hours of support monthly.

EHR: $1,275 / 14 hours = $91.07 per hour
Your cost: $72 per hour
Gross margin: 20.9%

That falls below the 50% minimum target and signals serious underpricing.

Per-user example:

Client pays $4,375/month for 25 users. Your team logs 26 hours monthly.

EHR: $4,375 / 26 hours = $168.27 per hour
Your cost: $72 per hour
Gross margin: 57.2%

Healthy territory. This client adds to your profitability.

AYCE example done right:

Client pays $5,500/month. Your team logs 28 hours monthly.

EHR: $5,500 / 28 hours = $196.43 per hour
Your cost: $72 per hour
Gross margin: 63.3%

Strong performance. This shows what AYCE can do when priced correctly.

AYCE example gone wrong:

Same $5,500/month client, but a "squeaky wheel" eating up 60 hours monthly.

EHR: $5,500 / 60 hours = $91.67 per hour
Your cost: $72 per hour
Gross margin: 21.5%

Still technically positive, but uncomfortably close to unprofitable. One bad month with an outage or major issue pushes this client into the red. This is exactly the kind of situation where you need to seriously consider whether the relationship is worth keeping—learn more about identifying and handling unprofitable clients.

What Gross Margins Should MSPs Target by Pricing Model?

Based on Service Leadership benchmarks and operational requirements, here are target margins by model:

Pricing Model	Minimum Target	Best-in-Class
Per-device	40-50%	55%+
Per-user	50-60%	65%+
AYCE	55-65%	70%+

Note that AYCE targets run higher because the risk is concentrated. According to Taylor Business Group, MSPs should aim for at least 65% gross margin on each managed services agreement. Service Leadership data shows average managed service gross margins at 46.2%, with only 25% of MSPs qualifying as best-in-class with margins over 50%.

If you're not hitting these numbers, your pricing needs adjustment or your operations need work. Probably both.

How to Choose the Right MSP Pricing Model

Picking a pricing model isn't about chasing industry trends. It's about matching your model to your operations, target market, and how mature your business is. Research indicates 43% of MSPs struggle with determining the correct pricing model, so you're not alone if this decision feels difficult.

Step One: Assess Your Operational Maturity

Can you accurately calculate client-level profitability today?

If not, start with per-device or per-user. These models forgive cost estimation mistakes more easily because each client represents only incremental risk.

If yes, you can look at AYCE or hybrid approaches because you have the data foundation to price accurately.

Do you have standardized service delivery?

If your technicians handle every client differently, per-device or per-user provides clearer boundaries. AYCE needs operational consistency because variability creates cost surprises you can't recover from.

Step Two: Evaluate Your Target Market

How do your clients work?

Hybrid and remote workforces point toward per-user pricing. With 52% of remote-capable employees working hybrid schedules and 83% of employees preferring hybrid arrangements, this work pattern will only expand. Fixed-location businesses with stable infrastructure can work with per-device. Clients who value predictability above all else respond well to AYCE.

What is the typical device-to-user ratio?

If clients average 3+ devices per user, per-user pricing almost always wins economically. If it is closer to 1:1, per-device may be competitive.

How sophisticated are your buyers?

Smaller businesses often prefer simple, predictable pricing (AYCE or per-user). Larger clients with IT leadership may be comfortable with more complex models including hybrid setups.

Step Three: Evaluate Your Risk Tolerance

How much variability can you absorb?

Per-device and per-user have natural caps on exposure. Each client is priced by countable units, limiting downside risk on any single agreement.

AYCE concentrates risk. A correctly priced AYCE client is very profitable, but an underpriced one is a recurring wound that bleeds every month.

Step Four: Consider Hybrid Pricing Approaches

More than 40% of MSPs now use combination approaches that blend models based on service category and client needs:

Per-user base rate covering standard support and security
Per-device premiums for servers and network infrastructure
Project-based pricing for migrations, implementations, and consulting
AYCE within tiers (Bronze/Silver/Gold packages at flat rates per user)

This recognizes that forcing every client into one model creates outcomes that aren't ideal for anyone. If you're considering this approach, check out our guide on designing tiered service packages that actually sell.

MSP Pricing Transition Checklist

Changing your pricing model is a big deal. Use this checklist to get it right:

Pre-Transition Analysis

Calculate fully-loaded costs for each technician role
Pull 12 months of ticket and time data by client
Compute current EHR and gross margin for every client
Find clients where current pricing underperforms targets
Model new pricing against historical service delivery patterns

Model Design

Define exactly what each pricing tier includes
Document exclusions clearly (projects, advanced security, consulting)
Set minimum monthly thresholds where it makes sense
Build in annual price adjustment mechanisms (3-5% minimum)
Create client-facing pricing sheets and comparison tools

Client Communication

Develop messaging explaining the change and what it means for them
Identify at-risk clients who may see big increases
Plan phased rollouts, starting with new clients
Prepare for existing client renegotiations at renewal
Train sales and account management on new pricing conversations

Operational Alignment

Update PSA quoting and billing configurations
Modify service agreements and MSA templates
Set up tracking for new pricing model metrics
Create monthly reporting on model performance
Schedule quarterly review dates to evaluate and adjust pricing

Common MSP Pricing Mistakes to Avoid

Pricing based on competitor rates instead of your costs. Your competitor might have better technician utilization, lower overhead, or be losing money on purpose to grab market share. Know your own numbers.

Failing to account for scope creep. Every pricing model needs clear boundaries. Document what's included and what triggers extra charges. Review these boundaries with every client at onboarding and QBRs.

Ignoring client profitability until renewal. By renewal time, you've already absorbed 12 months of losses on underpriced clients. Monitor EHR monthly and deal with problems right away.

Not raising prices annually. Your costs go up every year—salaries, tools, insurance, all of it. If prices stay flat, margins shrink automatically. Build 3-5% annual increases into every agreement.

Treating all clients the same. A 10-person client and a 100-person client behave differently even under identical pricing models. Larger clients often justify volume discounts; smaller clients need minimum commitments to be profitable.

The Path Forward for MSP Pricing

Your pricing model isn't just how you bill. It's a strategic decision that shapes your client relationships, where you focus operationally, and ultimately how profitable you are.

Here's what to do next:

This week: Calculate your fully-loaded technician cost using the formula above. If you don't know this number precisely, nothing else matters.
This month: Compute EHR and gross margin for your top 10 clients by revenue. Figure out which relationships are actually profitable.
This quarter: Decide whether your current model serves your target market. If not, design your transition plan.
Ongoing: Review pricing model performance monthly. Adjust as you learn.

The MSPs doing well in 2025 aren't the ones with the fanciest tools or biggest client lists. They're the ones who have nailed the basics of pricing for profitability. They know their costs, price accordingly, and protect their margins without compromise.

Your pricing model can be a competitive edge or a slow-motion financial drain. The only way to know which is to do the math. Start today.

Frequently Asked Questions

Which MSP pricing model is most profitable?

Per-user pricing tends to deliver the strongest margins when executed correctly, with top-performing MSPs achieving 50-70% gross margins. According to Service Leadership data, only 25% of MSPs qualify as best-in-class with service gross margins over 50%. Your actual profitability depends on understanding fully-loaded costs and delivering services efficiently, not just the model you choose.

What is the average per-user price for MSP services in 2025?

MSP per-user pricing in 2025 ranges from $100 to $250 per user per month for comprehensive managed services. Basic monitoring and maintenance starts around $50 per user monthly, while advanced packages with cybersecurity, cloud management, and 24/7 support can exceed $250-300 per user. The industry sweet spot for standard managed IT services sits between $150 and $200 per user.

Is per-device pricing still viable in 2025?

Per-device pricing has declined significantly due to hybrid work adoption. With 52% of remote-capable employees now working hybrid schedules and 79% working either hybrid or fully remote, managing discrete devices in fixed locations has become problematic. Per-user pricing has surpassed per-device adoption, now used by 42% of MSPs. Per-device can still work for industries with stable on-premises infrastructure like manufacturing or healthcare facilities.

What gross margin should MSPs target?

MSPs should target a minimum 50% gross margin on services. Best-in-class MSPs achieve service gross margins exceeding 50%, with top performers reaching 65-75%. According to recent Service Leadership Index data, average managed service gross margins reached 46.2%, the highest in over a year. Taylor Business Group recommends targeting at least 65% gross margin on each managed services agreement.

How much does an MSP technician cost fully loaded?

The average MSP technician earns $65,602 annually or roughly $32 per hour in 2025. However, fully-loaded cost including benefits, payroll taxes, tools, training, and overhead typically reaches $90,000-$100,000 per year. At 65% billable utilization, this translates to approximately $65-75 per hour of actual client work, which becomes your true cost baseline for pricing calculations.

What percentage of MSPs use hybrid pricing models?

Over 40% of MSPs now use combination or hybrid pricing approaches, recognizing that no single model fits every client situation. Common hybrid setups include per-user base rates for standard support with per-device premiums for servers and infrastructure, plus project-based pricing for implementations and migrations.