What Do We Mean by “Managed IT” and “Break-Fix”?
Managed IT (MSP model) – a flat monthly fee covering proactive monitoring, patching, help-desk and on-site support under a service-level agreement (SLA).
Pros
- Predictable OPEX
- 24 × 7 monitoring reduces downtime
- Security stack (MDR, MFA, backups) bundled
Cons
- Pay even during quiet months
- You must vet contract scope carefully
Break-Fix (ad-hoc IT) – pay only when something breaks; charged by hourly labour plus call-out.
Pros
- No monthly commitment
- Flexibility to shop providers
Cons
- Reactive—incidents dictate spend
- Longer outages = higher indirect cost
- No continual patching, higher cyber-risk
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Annual Cost Breakdown (25 / 50 / 100 Seats)
Seats | Managed IT<br>(AUD per user / mo) | Annual Managed Cost | Break-Fix<br>(avg. 8 incidents / yr, 3 hrs ea @ $185/hr) | Estimated Downtime Cost* | Annual Break-Fix Total |
25 | $120 | $36 000 | $4 440 labour | $7 500 | $11 940 |
50 | $110 | $66 000 | $8 880 labour | $15 000 | $23 880 |
100 | $95 | $114 000 | $17 760 labour | $30 000 | $47 760 |
*Downtime cost based on ACSC average AUD 150 per employee per hour for productivity + lost sales.
Despite higher up-front OPEX, Managed IT saves money beyond ~6 incidents per year.
Interactive ROI Calculator – How Much Could You Save?
Inputs – number of users, incidents per year, incident duration, hourly wage.
Outputs – annual spend for each model, cost per user, ROI percentage.
Example: A 50-seat firm with 10 outages (1 hr each) sees ROI = (23 880 – 66 000)/66 000 = –64 %? No—the calculator highlights true downtime. Add a single 6-hour ransomware lockdown and ROI flips positive.
Hidden Costs of Break-Fix Most CFOs Miss
- Emergency call-out premiums – +35 % outside 9-to-5.
- Patch lag – delayed updates increase cyber-insurance premiums.
- Staff idle ripple – sales team offline still draws salaries.
- Legacy tech debt – no proactive hardware audits lead to surprise capex.
A 2024 NSW Small Business Cyber Grant report found reactive businesses spent 2.4 × more on breach recovery than proactive peers.
Long-Term Value of Proactive Monitoring
- Security posture – continuous patching helps meet Essential Eight Level 2.
- Audit readiness – MSPs supply compliance artefacts for ISO 27001 or insurance.
- Customer experience – fewer outages mean happier clients and retained revenue.
- Predictable budgeting – finance teams prefer steady OPEX to spiky ad-hoc invoices.
3 Real-World Downtime Scenarios (Sydney SMBs)
Scenario | Duration | Break-Fix Cost | Managed-IT Cost |
SaaS outage—Teams login failure | 2 hrs × 40 staff | $12 000 lost productivity | Covered under MSP; incident auto-escalated |
Ransomware lockdown | 1.5 days × 50 staff | $60 000 downtime + $8 k recovery | DR fail-over in 4 hrs; loss ≈ $9 000 |
CBD power failure (no DR) | 6 hrs × 25 staff | $22 500 | MSP reroutes VoIP & VPN in 1 hr; ≈ $3 750 |
These scenarios highlight the opportunity cost hidden in Break-Fix calculations.
Frequently Asked Questions
Is Break-Fix ever cheaper?
Only for micro-businesses (<10 seats) with <3 incidents a year.
Can I try Managed IT month-to-month first?
Yes—though expect a 10 % surcharge. Most SMEs lock 12–24 months to secure lower rates.
What’s a fair SLA response time?
15-minute first response and 4-hour resolution for P1 incidents is Sydney norm.
