managed IT

4 ways managed services can lower capital expenditures

With a managed services provider (MSP), you can streamline your IT infrastructure, improve IT uptime, and minimize operational inefficiencies all while reducing your capital expenditures (CapEX). Here’s why. 

How managed services work 

With managed services, you’re effectively outsourcing your IT needs to an external service provider. You can customize the service package to whatever you require, but typically, managed services providers offer: 

  • Threat and vulnerability detection, and 24/7 network monitoring
  • Cloud-based storage solutions
  • 24/7 access to offsite expertise 
  • Flexible payment schedules based on what you use – in other words, you don’t pay for the services you don’t need

Clearly, then, partnering with an MSP can reduce your operational expenditure (OpEX) by streamlining your internal processes and reducing cybersecurity challenges. But, can it also reduce your CapEX? The simple answer is yes, and here’s why it matters. 

Why you should care about reducing CapEX

According to Gartner, roughly 25 percent of a company’s IT budget is spent on capital – a sizable chunk of the overall budget – but there’s always room for reducing this expenditure and either removing it completely or shifting it to operational expenditure. The good news is that, according to Computer Economics’ 2019/20 survey, strategic outsourcing is one of the most effective ways to reduce IT expenditure across the board, including capital expenses.

4 ways that MSPs can reduce your CapEX 

Although employing the use of managed services can provide numerous benefits to any business, here are the top four ways that managed services reduce your capital expenditures.

1: Hidden cost elimination

When you’re responsible for setting up your own infrastructure, such as new hardware, there are numerous hidden costs involved, including expensive setup fees and costs. Partnering with an MSP eliminates these hidden costs by turning them into clear, upfront operating expenses – you always know exactly what you’re paying for.

2: Upfront expenditure reduction

Speaking of hidden cost reduction, MSPs will also help you reduce your overall capital expenditure from the outset. Since your MSP provides much of the hardware you’ll need to succeed offsite, you’re no longer paying hefty upfront costs for expensive infrastructure. 

3: Comprehensive disaster planning

Disaster planning is critical, and it affects your capital expenditure. The average cyber attack costs SMBs nearly $55,000 in costs, ranging from downtime to infrastructure upgrades. These costs can include unexpected capital expenses for new equipment. With an MSP, you’ll minimize these unexpected costs and turn them simply into operational expenses if they do arise. 

4: Improved uptime

If your hardware breaks, it’s up to your in-house personnel to fix it, and the costs associated with new hardware in this scenario can be extremely steep. MSPs don’t just improve your uptime by taking care of these problems for you – they’re reducing your overall capital outlay every step of the way. 

An MSP provides for you the expertise, the uninterrupted performance, and the expenditure reduction you need to grow. 

Find a partner today

Partnering with a managed services provider is a straightforward option for any company looking to reduce its overall capital expenditures while improving service delivery and IT efficiency. For more information on managed services and how they could help reduce capital expenditures for your business, contact us today.