At some point every growing business asks the same question: do we hire an IT person, or do we pay a provider? Most of the articles answering it are written by managed service providers, and it shows. So let us be upfront: we are one. We also think the honest math still favors different answers for different businesses, and we would rather tell you the truth than win a bad-fit contract.
What an in-house hire actually costs
The salary is the visible part. A capable IT generalist in Texas runs roughly $65,000 to $95,000 a year, and a genuine security-plus-infrastructure engineer well north of that. Add 20 to 30 percent for benefits and employer costs, and you are at $80,000 to $125,000 before they touch a keyboard.
Then come the costs nobody budgets:
- Tooling. Monitoring, endpoint protection, backup licensing, a ticket system. Easily $5,000 to $15,000 a year done properly.
- Coverage. One person works about 40 hours of the week's 168. They also take vacations, get sick, and eventually resign, usually with most of the company's operational knowledge in their head.
- Depth. No single person is strong across networking, servers, security, backups, and end-user support. Whatever their weak area is, that is where your risk quietly accumulates.
- Escalation. When something exceeds their depth, you are paying emergency consulting rates on top of the salary.
What managed IT actually includes
A serious managed IT engagement covers the same ground as a hire, with the depth of a team instead of an individual: server and network management, patching, monitoring, backups and disaster recovery, security posture, and support. Pricing models vary, but small-business engagements commonly land between $1,000 and $5,000 a month depending on scope, which is $12,000 to $60,000 a year.
The catch is that "managed IT" is an unregulated phrase. It covers everything from a genuine operations team to a reseller who marks up licenses and forwards your tickets to the actual vendor. The questions at the end of this post are how you tell them apart.
The comparison, side by side
| In-house hire | Managed IT | |
|---|---|---|
| Annual cost | $80k to $125k+ loaded, plus tooling | $12k to $60k for most small businesses |
| Coverage | 40 hours a week, one time zone, one person | Team coverage with 24/7 monitoring |
| Depth | One person's strengths and gaps | Specialists across security, infra, and web |
| Knowledge risk | Walks out the door with the employee | Documented, shared across a team |
| Physical presence | On-site every day | Remote-first, on-site as contracted |
| Best when | Daily hands-on needs, hardware-heavy office | Systems must stay up, budget must stay sane |
When in-house is genuinely the right call
We told you we would be honest. Hire in-house when:
- You have daily physical needs: a warehouse of devices, a shop floor, constant hands-on user support.
- You are large enough that a managed contract covering everything would cost more than a team, usually well past 100 employees.
- IT is your product, and you need builders, not maintainers.
The pattern that works surprisingly well past a certain size is hybrid: one in-house coordinator who owns the relationship and the day-to-day, backed by a managed partner for infrastructure, security, and after-hours coverage.
A plain decision framework
- Under 10 staff: managed, almost always. A hire at this size is a luxury that concentrates risk in one person.
- 10 to 50 staff: managed for infrastructure and security, and consider a junior in-house or office champion for daily desk-side needs.
- 50 to 150 staff: hybrid. In-house coordination, managed depth.
- 150+: build the team, and still consider managed coverage for overnight monitoring and disaster recovery.
You are not really choosing between a person and a provider. You are choosing where the accountability for uptime lives. Pick the option that gives you one accountable owner for the whole stack, whichever that is.
The costs nobody puts in the comparison
Two more line items belong in the math, whichever direction you lean:
The cost of the gap. An in-house hire takes two to four months to find and onboard, and when they leave, the clock starts again with your systems undocumented in between. Managed providers have their own version of this risk: if the provider is a one-man band wearing a company logo, you have hired a single point of failure with extra steps. Ask how many people actually touch your account.
The cost of getting out. Lock-in is the quiet tax of bad managed IT. Proprietary tooling, hostage DNS, backups in a format only they can read, domain registrations in the provider's name. None of it shows up in the monthly price, all of it shows up when you try to leave. Before signing anything, ask to see the offboarding terms in writing. A provider confident in their work makes leaving easy, because nobody good needs hostages.
A worked example makes the shape clear. A 20-person professional services firm we would consider typical spends roughly $2,500 a month managed, about $30,000 a year, for infrastructure, monitoring, backups, security posture, and support. The in-house equivalent is a $90,000 loaded salary, plus $10,000 in tooling, minus vacation coverage, minus overnight monitoring, minus a second opinion on anything. The managed option is a third of the cost with more coverage. Flip the numbers for a 200-person company with a warehouse and daily hands-on needs, and the answer flips with them. The math is not ideological, it is situational.
Questions to ask any provider, including us
- Do you own the infrastructure you host on? Most resell someone else's. We run our own three data centers, which is why we can fix problems at the source instead of opening tickets upstream. It is also the fastest way to gauge how deep a provider's team really goes. More on that in our infrastructure guide.
- What exactly is monitored, and by what? Ask to see the monitoring, not a screenshot in a brochure.
- When did you last restore a client from backup? The good ones have a recent, specific answer.
- Who answers at 2 a.m., and what is the escalation path?
- What happens when we leave? Clean handover terms are the mark of a provider betting on quality, not lock-in.
If you want those answers from us for your specific setup, the math conversation takes about half an hour. See what a managed engagement covers, or open a channel below.