You’ve heard the phrase: You get what you pay for. This is especially true in the world of IT.

At first glance, opting for a low-cost managed IT service might seem like a smart move—lower monthly fees, basic support, and perhaps some cybersecurity features included. However, beneath the surface, hidden fees, limited coverage, and critical exclusions often lurk, ultimately costing your business far more over time. According to CompTIA’s 2024 IT Industry Outlook, 64% of SMBs now rely on managed service providers as their primary IT resource — but the quality gap between providers can mean the difference between preventing a breach and paying for one.

After years of analyzing IT contracts for professional services firms across the Bay Area — from San Jose and Los Gatos to Palo Alto and San Francisco — we’ve identified recurring pitfalls. Here are five common ways budget MSPs cut corners—and how those shortcuts can lead to expensive problems for your company.

1. Insufficient or Missing Cybersecurity Measures

Basic antivirus software alone does NOT constitute true cybersecurity.

Yet many budget IT providers stop there—no two-factor authentication, no advanced endpoint detection, no employee cybersecurity training, and no backup defenses if threats bypass initial protections.

Why is this critical? Cyber insurance companies now require robust cybersecurity protocols before issuing policies. Without these in place, your insurance claim could be denied after a cyberattack.

We’ve witnessed businesses lose tens of thousands of dollars because their MSP failed to implement the required protections. This isn’t just poor service—it’s negligence. Coalition’s 2024 Cyber Claims Report found that organizations without EDR experienced 3x longer recovery times after a ransomware attack compared to those with managed endpoint protection.

2. Incomplete Backup Solutions That Risk Your Data

Many business owners mistakenly believe platforms like Microsoft 365 or Google Workspace automatically back up all their data.

In reality, these services offer only basic backup capabilities and are not designed for comprehensive disaster recovery or long-term data retention.

Lower-cost or inexperienced IT providers often neglect backups for cloud applications, CRMs, and third-party tools, leaving vital information vulnerable. Even worse, many fail to provide immutable backups, now a mandatory requirement for many cyber insurance policies.

Think your backups are secure? Verify with your current provider exactly what data is protected—and what isn’t.

3. Unexpected Charges for On-Site and After-Hours Support

A common tactic: advertise a low monthly rate, then add extra fees whenever you require support outside standard business hours or need an in-person visit.

We advocate for transparent, flat-rate pricing. Unfortunately, many providers exclude on-site visits, after-hours assistance, and emergency support from their base plans to charge you more later.

The outcome? You hesitate to call for help, and your team delays reporting issues, which leads to longer downtimes and higher costs.

4. Lack of Support for Vendors and Third-Party Devices

Experiencing problems with your phones, internet, or security cameras? Some IT companies will simply say, “That’s outside our scope.”

They may even charge you hourly just to coordinate with other vendors. And if a device like your printer isn’t on their “approved” list, they might refuse to assist altogether.

Our approach includes comprehensive vendor management and full network support for all technology connected to your business, because issues can arise from any source.

5. Unqualified Technicians and No Dedicated Account Management

A major warning sign is a “one-person operation” or a provider relying on entry-level contractors without a clear support strategy.

With budget MSPs, you might receive technical help, but rarely strategic guidance.

What you deserve is:

● A dedicated account manager who crafts a tailored technology roadmap

● Regular, proactive assessments of your cybersecurity, compliance, and backup integrity

● Budget planning and upgrade strategies

● A trusted advisor focused on your business needs—not just a ticketing system

Bottom Line: If It Seems Too Good To Be True, It Probably Is.

Many small businesses remain unaware of their vulnerabilities until disaster strikes—whether it’s a ransomware attack, server failure, or costly compliance penalty.

By then, the damage is often irreversible.

To truly safeguard your business, look beyond the price tag. Ask tough questions, demand clear answers, and avoid contracts that leave you exposed.

If you want a thorough review of your IT setup, we’re here to help.

Click here or call us at 408-335-0353 to schedule your FREE Discovery Call.

Frequently Asked Questions

What are the risks of choosing a low-cost managed IT service?

Opting for a budget managed IT service may lead to inadequate cybersecurity measures, limited support, and unexpected fees. These providers often cut corners, which can result in costly problems down the line, such as data loss or insufficient disaster recovery solutions.

How can I ensure my business has effective cybersecurity measures in place?

To maintain robust cybersecurity, it’s essential to go beyond basic antivirus software. Implement multi-factor authentication, regular employee training, and advanced detection systems to meet both your business needs and the requirements of cyber insurance policies.

What should I know about backup solutions for my business data?

Many businesses mistakenly believe that services like Microsoft 365 provide complete data backup. In reality, these platforms offer limited backup features. It’s crucial to verify what data is protected and consider implementing comprehensive, immutable backup solutions to ensure your information is secure.

Are there hidden costs associated with IT support services that I should be aware of?

Yes, many IT providers advertise low monthly rates but charge extra for on-site visits or after-hours support. It’s important to look for transparent pricing structures to avoid unexpected fees, which can cause delays in addressing IT issues and lead to higher operational costs. One82 offers clear pricing plans that help businesses avoid these pitfalls.