An honest three-year cost comparison of managed IT and break/fix for Australian small business, with a clear verdict on which works out cheaper.
Verdict: for most Australian small businesses over about five staff, managed IT works out cheaper than break/fix within 18 to 24 months, once downtime and prevention are counted. Break/fix only wins for very small, low-risk businesses that rarely need help.
On paper, break/fix looks cheaper because you only pay when something breaks. The catch is everything you do not see on the invoice: the downtime, the lost work, and the problems prevention would have stopped. Here is the honest three-year picture.
Note: The cheapest year and the most expensive year of break/fix can be thousands of dollars apart, which makes budgeting almost impossible.
What is break/fix?
Break/fix is pay-as-you-go IT support: you call someone when something goes wrong and pay by the hour to fix it. There is no ongoing monitoring, prevention or planning between jobs.
It suits businesses with very simple needs, few staff, and a high tolerance for the occasional day offline. The appeal is obvious, no monthly commitment, but so is the risk.
Warning: With break/fix nobody is watching your systems between jobs, so a small fault can grow into a serious outage before anyone notices.
What is managed IT?
Managed IT is a fixed monthly fee for a partner who runs and protects your technology continuously, preventing problems rather than just fixing them. It bundles support, security, backups, monitoring and planning.
You pay in quiet months when nothing breaks, which feels like a cost, but that is precisely the point: the quiet months are quiet because the work is being done. See the full scope in the complete guide to managed IT and what is managed IT.
Best practice: When you review a managed invoice in a quiet month, remember you are paying for the problems that did not happen.
The real 3-year cost compared
Break/fix usually starts cheaper and ends dearer, because a single serious incident, ransomware, a failed server or days of downtime, can cost more than a year of managed IT. Here is an illustrative comparison for a ten-person business.
| Factor | Managed IT | Break/fix |
|---|---|---|
| Monthly cost | Fixed, roughly $1,500 to $2,500 | $0 until something breaks |
| Typical 3-year spend | Predictable and budgeted | Unpredictable, often higher after one bad event |
| Downtime | Minimised by prevention | Whatever it takes to fix |
| Security | Managed continuously | Only when you ask |
| Planning | Included | None |
| Cost of a major incident | Largely prevented | Borne in full |
The figures move with your business, but the shape holds: break/fix is cheaper in a good year and far more expensive in a bad one. The Australian Cyber Security Centre reports that cyber incidents routinely cost small businesses tens of thousands of dollars, which is the risk break/fix leaves on your shoulders.
Example: A ten-person business that loses two full days to a server failure can spend more in that single week than a whole year of managed fees.
Which should you choose?
Choose managed IT if you have more than about five staff, hold client data, or lose real money when systems go down. Choose break/fix only if you are tiny, low-risk, and can genuinely afford to be offline.
Tip: If you cannot say how long your business could run with its systems down, assume the answer is not long and plan accordingly.
- Fewer than 5 staff, simple tools, no sensitive data: break/fix may be enough for now.
- 5 to 50 staff, client data, growth plans: managed IT almost always wins.
- Cannot afford downtime: managed IT, without question.
If you are weighing an internal hire instead, read in-house IT vs outsourced IT. For pricing detail, see IT support cost.
Frequently asked questions
Is break/fix ever cheaper than managed IT?
Yes, in a quiet year for a very small, low-risk business, break/fix can cost less. The risk is that a single serious incident can wipe out those savings and then some.
How quickly does managed IT pay for itself?
For most businesses over five staff, managed IT pays for itself within 18 to 24 months, largely through avoided downtime and prevented incidents.
Can I mix break/fix and managed IT?
Some providers offer a middle ground, such as managed security with pay-as-you-go project work. Full managed IT still gives the strongest prevention and predictability.
What hidden costs does break/fix have?
The hidden costs are downtime, lost productivity, unplanned bills, and the incidents that prevention would have avoided. These rarely show on an invoice but hit the bottom line.
Want a straight answer for your business? See our managed technology service, then book a free cost review with Ryan.