What each model actually costs, where each one breaks, and the third option most mid-market companies end up choosing.
Security & compliance gaps — plus the IT issues that create them
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Last updated: September 2026
As of September 2026: For most organizations under ~80 users, a full-stack MSP is usually cheaper than hiring even one loaded in-house IT generalist — once you count salary, benefits, tools, after-hours coverage, and turnover risk. A common planning band is $125–$195 per user/month for managed IT versus roughly $110K–$150K+ loaded cost for one internal hire (before a second hire). Around 60–100 users the decision gets situational; above ~150 users, co-managed (internal IT + MSP specialists) often beats pure in-house or pure outsource. The biggest miss in most comparisons: security/compliance labor and 24/7 coverage.
Ohio and mid-market planning bands. Your numbers move with compliance scope, infrastructure, and on-site expectations.
| Model | Typical annual cost | What you usually get | Main failure mode |
|---|---|---|---|
| In-house (2 blended IT salaries) | $150,000–$260,000 | Business-hours coverage, institutional knowledge | Vacations/turnover gaps; security/compliance slips |
| Full MSP | $75,000–$117,000 ($125–$195/user/mo) | 24/7 monitoring, tooling, specialist bench | Weak if provider lacks compliance depth |
| Co-managed | 1 internal salary + $39,000–$66,000 ($65–$110/user/mo) | Keep control + specialist backup | Needs clear RACI / documentation ownership |
Planning-grade math. Ticket volume and compliance scope shift the line, but headcount is the fastest way to see where the models cross.
| Users | MSP annual (illustrative @ ~$150/user/mo) | In-house equivalent | Usually cheaper |
|---|---|---|---|
| 10 | ~$18,000 | 1 loaded hire ($110K–$150K) | MSP |
| 25 | ~$45,000 | 1 loaded hire | MSP |
| 50 | ~$90,000 | 1–2 hires ($150K–$260K) | MSP / co-managed |
| 75 | ~$135,000 | ~2 hires | MSP or co-managed |
| 100 | ~$180,000 | 2–3 hires | Situational / co-managed |
| 150 | ~$270,000 | 3+ hires / hybrid | Co-managed |
| 250 | ~$450,000 | Internal core + specialists | Co-managed / internal core |
MSP rate assumes tooling/security stack included; project work and major transformations are often extra. In-house figures are loaded employment cost, not base salary alone.
| Factor | In-house IT | Managed IT (MSP) | Co-managed |
|---|---|---|---|
| Coverage | Business hours only. Vacations, illness, and turnover create real gaps. | 24/7 monitoring with an on-call escalation path and no single point of failure. | Your team owns the day; after-hours, weekends, and holidays are covered. |
| Depth of skills | Generalists. Security, cloud architecture, and compliance usually get contracted out anyway. | Specialists on tap: security operations, network, M365/Azure, and compliance. | Your generalist plus specialists behind them for the work they shouldn't own alone. |
| Security tooling | Purchased separately — EDR, SIEM, email security, and backup licensing add up quickly. | Bundled into the per-user rate and managed by the people who deployed it. | Bundled, and your team keeps administrative visibility. |
| Institutional knowledge | Strong — until the person leaves and takes undocumented context with them. | Held in documentation and a team, not one head. Ask for documentation ownership in writing. | Shared, with documentation maintained as part of the agreement. |
| Compliance work | Usually the first thing to slip. Evidence collection is continuous, not annual. | Control mapping, SSP/POA&M maintenance, and evidence handled as recurring service. | Framework and audit support layered over your internal operations. |
| Scaling | Step-function: each new hire is a 3–6 month search and a fixed cost. | Linear: cost moves with seat count, up or down. | Linear on the outsourced portion, fixed on the internal portion. |
Most comparisons stop at salary versus monthly invoice. These six lines are where the real difference shows up.
A 3–6 month search, agency fees where used, and 60–90 days before a new hire is genuinely productive in your environment. That gap is real cost, not a rounding error.
One person cannot cover 168 hours a week. Either you pay overtime and on-call premiums, or incidents wait until morning — which is its own cost.
EDR, SIEM/log retention, email security, MFA/identity, and backup licensing are normally bundled into an MSP rate and purchased line-by-line when you staff internally.
Undocumented environments cost money at every transition. Put documentation, tenant ownership, DNS, and admin credential handover in the agreement — with an internal team, budget the time to maintain them.
CMMC, HIPAA, and FTC Safeguards need continuous evidence, not an annual scramble. This is recurring labor that rarely appears in an in-house salary comparison.
Ask any provider what sits outside the monthly rate — migrations, on-site visits, after-hours project work, and onboarding fees are the usual gaps.
Dig deeper: managed IT pricing, co-managed IT, CMMC certification cost, or start with a 14-day IT health check.
Best when scale and specificity justify fixed headcount.
Best when you need coverage and depth for a predictable price.
Best when you have internal IT that needs backup, not replacement.
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