Guide
4 min read
By MSP Margin Editorial
Pricing models usually get debated as a sales question: which one is easier to explain, which one wins deals. The finance side gets less attention. The unit you price by decides what you have to count every month, what can drift out of sync, and whether you can tell which clients make money.
There are three common approaches, and plenty of MSPs run a mix.
What each model counts
Per-device pricing charges for each endpoint under management: workstations, servers, sometimes network gear and mobile devices, often at different rates by device type. The count comes from your RMM or asset inventory.
Per-user pricing charges for each person supported, regardless of how many devices they use. The count usually comes from the client's directory or email tenant, or from a roster the client provides.
Tiered or bundled pricing packages a set of services into levels, often priced per user or per device inside each tier. The client picks a tier, and the tier decides which tools and response terms are included.
| Model | What you count | Where the count usually comes from | Common billing friction |
|---|---|---|---|
| Per device | Endpoints by type | RMM or asset inventory | Stale devices, mixed rates by type |
| Per user | Supported people | Directory, tenant or client roster | Shared mailboxes, service accounts, departed staff |
| Tiered | Users or devices within a tier | Same as above, plus tier assignment | Clients on custom tiers, add-ons outside the bundle |
What each model does to margin tracking
Your costs mostly arrive per device or per seat. Endpoint security, RMM agents and backup are often priced by the device. Productivity suites and identity tools are often priced by the user. Labor tends to follow users more than devices, because people open tickets.
Per-device pricing lines up well with device-based tool costs. If you know what each workstation costs you in tools, you can see gross margin per device fairly directly. It lines up less well with labor, since a client with many devices and few users may generate little ticket volume.
Per-user pricing lines up better with labor and with user-based licenses, but device-based tool costs become a variable inside the price. A client whose users each carry several devices costs you more in tools than one whose users share machines.
Tiered pricing makes the invoice simple and the margin analysis harder. Every tier is a bundle of costs, so you need a cost build for each tier and a way to keep it current when a vendor changes pricing. Without that, tiers tend to drift into a price that made sense when it was designed and no longer does.
The same client priced two ways
Here is an illustrative example with round numbers. A client has 50 users, 60 workstations and 4 servers.
Under a per-user model at $100 per user, the monthly charge is 50 × $100 = $5,000.
Under a per-device model at $60 per workstation and $200 per server, the charge is (60 × $60) + (4 × $200) = $3,600 + $800 = $4,400.
Neither number is right or wrong by itself. What matters is what each costs to deliver. If your device-based tools run $20 per workstation and $50 per server, tool cost is (60 × $20) + (4 × $50) = $1,200 + $200 = $1,400 under either model. The per-user price leaves $3,600 after tools; the per-device price leaves $3,000. Labor then has to come out of that remainder, and labor is where you need ticket and time data by client to finish the picture.
Now suppose the client adds 10 workstations for a lab with no new staff. Per-device revenue rises by $600 and tool cost by $200. Per-user revenue stays at $5,000 while tool cost still rises by $200. That is the kind of quiet margin shift per-user pricing can hide.
Keeping invoicing manageable
Whatever you choose, a few practices reduce month-end work:
- Pick one system as the source of truth for counts and document it per agreement.
- Define what counts. Spell out whether shared mailboxes, service accounts, virtual machines or spare devices are billable.
- Pull counts on the same day each month so changes are comparable.
- Keep your PSA product catalog small. A separate item for every client-specific variation makes reporting by service line very difficult.
- Map each billable item to a revenue account and each tool to a cost account, so margin can be read by service line in the books.
Mixed models are common and workable, for example per-user for support with per-device add-ons for servers. They just need clear definitions in the agreement and in the PSA so billing and contract say the same thing.
This guide is general information, not accounting or tax advice. How you structure, record and report pricing depends on your circumstances, so confirm the details with your CPA.