Two ways to buy IT support: pay when it breaks, or pay a fixed monthly fee for it not to. Here is a direct comparison including where break-fix is genuinely the better answer.
What is break-fix IT support?
Break-fix means paying per incident or per hour when something goes wrong. Between calls, nobody is monitoring, patching or maintaining anything. Australian hourly rates typically run $120 to $220 per hour, often with a minimum call-out.
What is managed IT?
Managed IT is a fixed monthly fee covering support, 24/7 monitoring, patching, backups, security and strategy. The provider carries the cost of things going wrong, which aligns their incentives with yours.
Direct comparison
| Break-fix | Managed IT | |
|---|---|---|
| Cost model | Per hour or per incident | Fixed monthly fee |
| Predictability | Poor. A bad month is expensive. | High. Same every month. |
| Monitoring | None between calls | Continuous |
| Patching | Only when requested | Scheduled |
| Backups | Set up once, rarely verified | Monitored and restore-tested |
| Provider incentive | Earns more when things break | Earns more when things work |
| Response | Queued behind contract clients | Committed response times |
| Strategy | None | Planning and budgeting included |
How the costs actually compare
Consider a fifteen-person professional services firm. Under break-fix, a realistic year might involve a dozen support incidents averaging three hours at $160 per hour, giving roughly $5,760, plus one significant failure requiring twenty hours at $3,200. That is around $8,960 in invoices.
That figure, though, excludes the expensive part. Two days of disruption from that major failure, with fifteen staff at an average $45 per hour, costs about $10,800 in idle wages alone. Total impact is closer to $19,000.
The same firm on managed IT at $1,800 per month pays $21,600 across the year. On paper that looks similar. The difference is that the managed scenario includes monitoring likely to have caught the major failure early, patching that closes vulnerabilities, tested backups, and no unplanned two-day outage. It is a slightly higher predictable cost in exchange for materially lower variance.
The honest summary: managed IT is not always cheaper in raw invoices. It is more predictable, and it substantially reduces the chance of the expensive event. If your business can absorb two days offline without serious consequence, that trade may not be worth it to you.
When break-fix is genuinely the right answer
- Very small teams, roughly under ten users, with simple needs
- Businesses with minimal technology dependence, where a day offline is an inconvenience rather than a crisis
- Organisations with capable internal IT that only need occasional specialist input
When managed IT makes sense
- Businesses whose teams cannot work when systems are down
- Any business handling client data with compliance obligations
- Businesses needing to answer security questions from insurers or tenders
- Anyone who has already had one expensive outage and does not want another
The third option: co-managed
Once a business has its own internal IT person, usually from around 30 staff, a hybrid often works best. That person handles daily requests and knows the business intimately, while an external provider covers security, infrastructure, after-hours monitoring and strategy. This also removes the single-point-of-failure risk of one internal person holding all the knowledge and then resigning.
Xen IT offers managed and co-managed IT month to month, with no multi-year lock-in and a three month notice period.
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