IT outsourcing means paying an outside company to handle technology work your business would otherwise do in-house. That can be everything (a managed service provider running all of IT), one function (an outsourced help desk), a project (a cloud migration), or extra hands (staff augmentation). Companies outsource IT for three reasons: it costs less than building the capability internally, it’s faster than hiring, and it gives them access to specialists a small business could never staff. Done right, it also improves security, because the provider’s whole business depends on getting it right.
In this guide
- The main IT outsourcing models
- What businesses outsource most
- What IT outsourcing costs
- Pros and cons
- Onshore vs. offshore
- How to outsource IT without regret
- How Sixwatch handles outsourced IT
- FAQ
The main IT outsourcing models
| Model | What it is | Pricing | Best for |
|---|---|---|---|
| Managed IT services | A provider takes ongoing responsibility for monitoring, support, security, and maintenance under an SLA | Flat monthly fee, usually per user | Businesses with 10 – 250 employees that want IT handled, not managed |
| Co-managed IT | The provider supplements your internal IT team with specific functions | Per user, reduced scope | 75 – 500 employees with internal IT |
| Project-based outsourcing | A defined project with a start, end, and deliverable: migration, network build, software rollout | Fixed price or time and materials | Any size, for work that’s outside normal operations |
| Staff augmentation | Contract technicians or engineers working under your management | Hourly or monthly per person | Companies that need capacity, not a service |
| Outsourced help desk | A third party answers user support tickets | Per user or per ticket | Companies with internal infrastructure teams but overflowing support queues |
| Managed security (MSSP) | Outsourced security monitoring, detection, and response | Per user or per device | Businesses with IT staff but no security operations |
| Cloud and infrastructure management | Outsourced administration of servers, cloud environments, and networks | Monthly, based on environment size | Companies with complex or hybrid infrastructure |
| Software development outsourcing | External teams build or maintain applications | Project or dedicated team | Companies building custom software |
For most small and mid-size businesses, “IT outsourcing” in practice means managed IT services from an MSP. The other models layer on top or replace it as the company grows.
What businesses outsource most
In rough order of how often small and mid-size businesses hand it off:
- Cybersecurity (monitoring, detection, response): nearly impossible to staff 24/7 internally
- Help desk and technical support
- Infrastructure management (servers, network, cloud)
- Backup and disaster recovery
- Cloud migration and Microsoft 365 management
- Compliance (HIPAA, CMMC, SOC 2)
- IT strategy and planning (vCIO or vCISO services)
- Projects: office moves, phone systems, hardware refreshes
What businesses keep in-house, when they keep anything: line-of-business application ownership, vendor relationships that are tied to operations, and the person who knows why the warehouse system works the way it does.
What IT outsourcing costs
| Outsourced function | Typical cost |
|---|---|
| Fully managed IT (all functions) | $75 – $300 / user / month |
| Co-managed IT | $40 – $180 / user / month |
| Outsourced help desk only | $20 – $50 / user / month |
| Managed security (MSSP) | $50 – $150 / user / month |
| Staff augmentation (contract engineer) | $100 – $200 / hour, or $12,000 – $25,000 / month |
| Project work | $150 – $250 / hour, or fixed price |
| vCISO / vCIO | $2,000 – $15,000 / month |
For a 40-person company, fully managed IT at $160 per user is about $6,400 a month, or $77,000 a year. One in-house IT hire costs $90,000 to $125,000 fully loaded, covers business hours only, and brings one person’s skill set. See managed IT services pricing for the full breakdown.
Pros and cons of IT outsourcing
Advantages
- Cost efficiency. Predictable monthly fees instead of salaries, benefits, training, and tools. Cost savings of 25% to 40% versus equivalent in-house capability are typical for companies under 150 employees.
- Access to specialists. A security engineer, a cloud architect, and a compliance expert, without hiring three people.
- 24/7 coverage. Monitoring and response outside business hours, which no small internal team can sustain.
- Faster scaling. Add users, locations, or capabilities in weeks, not the months it takes to hire.
- Better security. Providers that serve dozens of clients see attacks earlier and standardize defenses.
- Focus. Leadership spends time on the business, not on why the email server is down.
Disadvantages
- Less direct control. You manage a relationship and an SLA, not a person.
- Dependency. A bad provider is painful to leave; make sure documentation and credentials stay yours.
- Generic service. Some providers apply the same playbook to everyone. Look for industry experience.
- Data security concerns. Your provider has admin access to everything. Its security posture is now yours. Ask about its own controls, insurance, and compliance.
- Time zones and communication if the provider is offshore (more below).
- Hidden costs. Onboarding, projects, hardware, and after-hours fees can add 30% or more to the headline rate.
Onshore vs. offshore IT outsourcing
| Onshore (U.S.-based) | Nearshore (Latin America) | Offshore (India, Philippines, Eastern Europe) | |
|---|---|---|---|
| Cost | Highest | 30 – 50% less | 50 – 70% less |
| Time zones | Aligned | 0 – 3 hours off | 8 – 12 hours off |
| Onsite support | Available | No | No |
| Compliance fit | Best for HIPAA, CMMC, financial data | Case by case | Often excluded by CUI and data residency rules |
| Best for | Managed IT, security, anything touching regulated data or physical infrastructure | Software development, overflow help desk | Software development, back-office IT for large companies |
For managed IT and security, onshore providers dominate because someone has to show up when a server room floods, and because most compliance frameworks restrict where regulated data can be accessed from. Offshore outsourcing works well for software development and large-scale help desk operations at companies with the management capacity to run them.
How to outsource IT without regret
- Decide what you’re outsourcing and why. “Everything, because we have nobody” and “security, because our IT manager can’t cover it” lead to different providers.
- Write down your requirements: headcount, locations, compliance obligations, hours of coverage, current pain points.
- Get the SLA and exclusions in writing before you compare prices.
- Ask about the provider’s own security. Insurance, certifications, background checks on technicians, MFA on their tools.
- Check industry experience and references from businesses your size.
- Plan the transition. Documentation from your current setup, admin credentials, a cutover date, and a communication plan for employees.
- Define how you’ll measure success: ticket response times, uptime, security incidents, employee satisfaction.
- Read the exit clause. You should be able to leave with your documentation, credentials, and data intact.
How Sixwatch handles outsourced IT
Sixwatch has been the outsourced IT department for businesses in Tampa Bay and Cincinnati for over two decades. Whether you need fully managed IT, a co-managed arrangement alongside your internal team, or a specific function like security or help desk, we scope the engagement around what you’re actually trying to solve.
Every arrangement includes managed cybersecurity, a 30-minute emergency remote response, and same-day onsite support. Founder John Owens brings 25+ years of IT and security experience, and our 5.0 Google rating comes from businesses that outsourced IT to us and stopped thinking about it.
Tampa businesses can start at our IT outsourcing in Tampa page. Everyone else: book a 15-minute call or request a proposal.
Frequently asked questions
What is IT outsourcing? Paying an outside provider to handle technology functions your business would otherwise staff internally: support, infrastructure, security, projects, or all of IT.
What is the difference between IT outsourcing and managed IT services? Managed IT services are one type of IT outsourcing: ongoing, proactive management of all or most of your IT under a monthly fee. IT outsourcing also includes project work, staff augmentation, and single-function arrangements like an outsourced help desk.
How much does IT outsourcing cost? Fully managed IT runs $75 to $300 per user per month. Single functions, projects, and staff augmentation are priced separately. Most small and mid-size businesses save 25% to 40% compared to equivalent in-house staffing.
Is IT outsourcing safe? It can be safer than in-house IT, because providers standardize security across many clients and monitor 24/7. The risk is in choosing a provider with weak controls of its own. Ask about their insurance, certifications, and how they secure their access to your systems.
Should I outsource IT or hire in-house? Under about 150 employees, outsourcing is almost always more cost-effective and provides better coverage. Above that, a hybrid model with internal IT leadership and an outsourced provider for security, monitoring, and after-hours support is common.
What should I look for in an IT outsourcing company? A clear SLA, security included in the base service, industry experience, named technicians, onsite capability, good references from companies your size, and clean exit terms.
Thinking about outsourcing some or all of your IT? Book a 15-minute call · Request a proposal