A two-hour outage stops sales and support. Who fixes it, how fast, and at what cost depends on your service model. This guide compares managed and co-managed IT so you can choose the best ROI for your business.
What “ROI” Really Means In IT Services?
ROI is bigger than the monthly invoice. You should total direct, indirect, and risk costs. Direct costs include salaries, licenses, tools, projects, and vendor fees. Indirect costs cover downtime, lost productivity, and user frustration. Risk costs include breaches, fines, legal fees, and brand damage.
Downtime is expensive. Recent studies show most firms now lose over $300,000 per outage hour; some report $1–5 million.
Security risk is rising. The average breach reached $4.88 million in 2024, with higher costs in finance. Ransomware appeared in 44% of breaches tracked in 2025, up from 32% the year before.
A simple formula:
ROI = (Financial Benefits – Total Costs) ÷ Total Costs.
You will plug in examples later.
Fully Managed IT Services
What You Actually Get?
A managed service provider (MSP) operates as your outsourced IT department. Typical scope includes 24/7 help desk, device and network management, cloud administration, backups, disaster recovery, security stack, compliance support, vendor management, and vCIO planning. The model offers predictable spend and standardized operations. Market growth reflects this demand.
Where Fully Managed IT Wins On ROI?
Fully managed shines when you lack internal IT depth. You avoid recruiting, on-call coverage, and training overhead. You also gain mature tooling on day one. In the case of multi-site or 24/7 operation, the expense of always-on support can outbid the cost of creating your own staff. Quick response to incidents minimizes downtime and facilitates productivity with minimal time lost safeguarding revenue.
Limitations And Hidden Trade-Offs
If you already have capable staff, fully managed may overbuy coverage. Some leaders feel less control and fear vendor lock-in. Misaligned scopes can create gaps around line-of-business apps. If the MSP runs a ticket mill without strategic planning, long-term value suffers. Use clear SLAs and regular roadmap sessions to avoid these pitfalls.
Co-Managed IT Services
How Co-Managed IT Is Structured
Co-managed blends your internal IT with an MSP partner. You keep ownership of strategy and key relationships; the MSP augments capacity and skills. Common splits include help-desk overflow, EDR and SOC services, cloud projects, compliance tasks, and after-hours coverage. The approach scales up or down as needs change.
Where Co-Managed IT Wins On ROI
You avoid paying twice for strengths you already have. The MSP fills specific gaps and brings advanced tools, without replacing your team. Mid-market firms benefit most: internal IT focuses on the business, while the MSP handles heavy lifting and 24/7 monitoring. This reduces burnout, accelerates projects, and tightens security coverage.
Pitfalls That Erode ROI
Role confusion causes finger-pointing and slow fixes. Poor runbooks, unclear ownership, or missing escalation paths let tickets stall. If leadership underfunds security controls, the model cannot save ROI. Successful co-managed programs define RACI, share dashboards, and meet monthly to review SLAs, risks, and upcoming changes.
Side-By-Side ROI Comparison: Managed vs. Co-Managed
Cost Models
- Fully Managed: One subscription covers people, tools, and processes. It can replace multiple salaries and licenses.
- Co-Managed: Lower fee than fully managed, but you still carry internal salaries and some tools.
- Fully managed with 24/7 support and security.
- Co-managed with internal IT lead, MSP for SOC, backups, and overflow. If internal IT is strong, co-managed often wins on raw spend. If staffing is thin or turnover is high, fully managed can be cheaper than piecing together coverage. Use your true salary burden, tool stack, and after-hours needs to model it.
Impact On Downtime, Productivity, And Security
The best model is the one that prevents incidents and resolves them fast. Many firms report six-figure hourly downtime costs; even small cuts matter. If a contract reduces outages by a few hours a quarter, the benefit can surpass the fee difference. Ransomware is more active; response maturity and 24/7 monitoring reduce losses and recovery time.
Strategic Value
Strategic ROI includes scalability, innovation speed, and leadership focus. Fully managed frees executives from running IT and speeds standardization. Co-managed lifts internal IT into higher-value work while delivering depth on security and cloud. Either model should include a quarterly roadmap tied to business goals.
Decision Framework: Which Model Delivers Better ROI For You?
Key Questions To Ask Internally
- Do you have enough IT staff to cover 24/7 essentials?
- What is your real downtime cost per hour?
- Which skills are missing today: security, cloud, or compliance?
- Do you need faster projects or steadier operations?
- What growth, mergers, or audits are coming this year?
Red Flags When Evaluating Providers
- Vague SLAs and no response or resolution targets.
- Tool lock-in without data access or exit plans.
- No monthly reporting on patching, alerts, or tickets.
- Limited security stack or weak backup testing.
- No roadmap sessions with measurable outcomes.
Hybrid Possibilities And Migration Paths
You can move between models as you grow. Many firms start co-managed, then shift functions as needs change. Others begin fully managed, hire a small internal team, and keep the MSP for SOC and after-hours. Review the model every 12 months using cost, risk, and project velocity.
Ready To Eliminate Downtime And Take Control Of Your It Future?
Pick the model that best reduces downtime, breach risk, and busywork. Do a quick ROI check with your real costs, then run a pilot. Want help with math and SLAs? Request a no-pressure IT/ROI assessment today!
FAQs
What is the biggest ROI driver, managed or co-managed?
The biggest driver is reduced downtime and faster fixes. Six-figure hourly outage costs make even small improvements impactful.
Are breach costs really that high for mid-market firms?
Yes. The global average hit $4.88 million in 2024, with higher costs in regulated sectors.
Is co-managed just staff augmentation?
No. Co-managed products should include shared tools, clear RACI, and joint planning. That is how it protects ROI.
Which model scales best during rapid growth?
Both scales. Fully managed adds consistent coverage quickly. Co-managed scales by pairing your team with MSP specialists. Choose based on staffing and change pace.
Where can I learn security basics to frame requirements?
Start with the NIST Cybersecurity Framework, then map controls to contracts and SLAs. It improves outcomes in any model.
