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IT Service Contracts Pose Big Question for Smaller Companies


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  1. IT Service Contracts Pose Big Question for Smaller Companies
  2. Break-Fix Model Is Unprofitable

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IT Service Contracts Pose Big Question for Smaller Companies
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When is an office large enough to consider contract IT service or a staff?

Chances are that a company of any significant size has an IT staff to handle day-to-day issues and an IT service contract that provides fast help for virtually any technology problem that befalls it.

But what if a company has 50 or 75 employees—large enough to have an IT presence on-site, but perhaps not large enough to justify spending the amount of money it takes to keep a major service contract afloat?


Or what about a company of only 15 or 20 people—or even a five-person branch office of a much larger company. In these cases, does it make financial or practical sense to sign a contract with an IT service provider to handle technological needs, or should these companies simply call a tech specialist when the need arises?

The answer isn't clear-cut. The decision depends on many factors, including the number of technically adept employees at each location, the relative cost of each option and the importance of 24/7 uptime.

In general, experts seem to agree that formal IT service contracts make the most sense for companies with 100 or more employees in a single location, while opting for one-off break-fix services from either a local tech support firm or a nationwide franchise such as Geeks On Call, Geek Squad or OnForce makes sense for smaller companies with little on-site IT expertise or for small branch offices of larger companies.

"If equipment doesn't break very often and the staff is relatively small, it can be less expensive to go with the break-fix option than having all equipment under a maintenance agreement where they are paying monthly without seeing any tangible benefit most of the time," said Michael Speyer, a senior analyst at Forrester Research. "Basically, these kinds of companies are great for ad hoc kinds of break-fix occurrences but not necessarily for ongoing care and feeding of your IT infrastructure."



 
 
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