Most small and mid-sized businesses hit a point where managing their own cloud infrastructure stops being “we’ll figure it out” and starts actively costing money. Maybe your Azure bill doubled without anyone noticing. Maybe a misconfigured S3 bucket sat open for three weeks. Maybe your one IT person quit, and nobody knows the admin password to anything.
That is usually when cloud managed services start looking attractive. But the term gets thrown around loosely, and every MSP defines it differently. Here is what cloud managed services actually include, what they cost, and how to figure out whether they are worth it for your business.
What Cloud Managed Services Actually Cover
At its core, a cloud managed services agreement means an external provider takes responsibility for keeping your cloud infrastructure running, secure, and optimized. But the specifics vary widely between providers. Here is what a solid engagement should include:
Monitoring and Alerting
Your provider should be watching your cloud environment 24/7 — not just checking if servers are online, but tracking performance metrics, resource utilization, and anomalous behavior. Tools like Datadog, Azure Monitor, or AWS CloudWatch should be feeding into a centralized dashboard with defined alert thresholds.
If something goes sideways at 2 AM, your MSP should be the one getting the page, not you.
Patch Management and Updates
Operating system patches, security updates, application updates — all of this needs to happen on a regular cadence without breaking things. A good managed services provider maintains a patch schedule, tests updates in staging environments where possible, and has rollback plans when patches cause issues.
This alone saves most SMBs significant headaches. The 2017 WannaCry ransomware attack exploited a Windows vulnerability that Microsoft had patched two months prior. Organizations that fell behind on patching got hit hardest.
Security Management
This goes beyond just running antivirus. Cloud security management should include firewall configuration, identity and access management (IAM) policy reviews, vulnerability scanning, and log analysis. Your provider should be reviewing security group rules, ensuring least-privilege access, and flagging misconfigurations before they become incidents.
For organizations on Azure, this means proper configuration of Azure Security Center (now Microsoft Defender for Cloud) and conditional access policies. On AWS, it means Security Hub, GuardDuty, and IAM best practices.
Backup and Disaster Recovery
Your managed services agreement should define what gets backed up, how frequently, and what the recovery time objectives (RTO) and recovery point objectives (RPO) are. If your provider cannot tell you how long it would take to restore your environment after a total failure, that is a red flag.
A solid backup strategy follows the 3-2-1 rule: three copies of your data, on two different types of media, with one copy stored offsite. Cloud-native backup solutions like Azure Backup, AWS Backup, or Veeam for hybrid environments are standard tools here.
Cost Optimization
One of the most overlooked components. A good MSP should be reviewing your cloud spend monthly and identifying waste — oversized VMs, idle resources, unattached storage volumes, reserved instance opportunities. AWS estimates that the average company wastes about 35% of its cloud spend. Azure environments tend to be similar.
Your provider should be right-sizing instances, setting up auto-scaling policies, and recommending reserved or savings plans where your usage is predictable.
Cloud Managed Services Pricing Models
Pricing is where things get confusing. MSPs use several different models, and the right one depends on the size and complexity of your environment.
Per-Device Pricing
You pay a fixed monthly fee for each server, workstation, or network device under management. This model is straightforward and works well for smaller environments. Expect to pay anywhere from $100 to $300 per server per month and $50 to $150 per workstation per month for basic management, depending on your region and the scope of services included.
Per-User Pricing
A flat monthly fee per employee, regardless of how many devices they use. This model has gained popularity because it aligns costs with headcount and simplifies budgeting. Typical per-user pricing for cloud managed services ranges from $125 to $300 per user per month, though this varies significantly based on the services included.
Flat-Rate or All-Inclusive Pricing
Some MSPs offer a single monthly fee for your entire environment. This is the most predictable model for budgeting, but it requires the provider to accurately scope your environment upfront. If your infrastructure grows significantly, expect a renegotiation.
Tiered Pricing
Many providers offer bronze, silver, and gold tiers with different service levels. The base tier might include monitoring and alerting only, while the top tier adds proactive optimization, dedicated account management, and guaranteed response times.
Regardless of the model, make sure you understand what is and is not included. The most common gotcha is project work. Most managed services agreements cover day-to-day operations, but migrations, new deployments, and major changes are usually billed separately.
How to Evaluate a Cloud Managed Services Provider
Not all MSPs are created equal, and the selection process matters. Here is what to look for:
Technical Certifications
For Azure environments, your provider should hold Microsoft Solutions Partner designations. For AWS, look for AWS Partner Network membership with relevant competency certifications. These are not just badges — they require demonstrated expertise and verified customer outcomes.
Industry Experience
If you are in healthcare, your MSP needs to understand HIPAA. If you are in finance, they need to understand SOC 2 and PCI DSS. Compliance requirements affect how your cloud environment must be architected, monitored, and documented. An MSP without experience in your industry’s regulations is going to cost you more in the long run.
Defined SLAs
Service Level Agreements should spell out response times, resolution times, and uptime guarantees. “Best effort” is not an SLA. Look for specific commitments: critical issues acknowledged within 15 minutes, resolved within 4 hours. Ask what happens if they miss those targets — there should be service credits or other remedies.
Transparent Reporting
Your provider should be giving you monthly reports that you can actually read and act on — not a 40-page PDF full of green checkmarks. Good reports include uptime metrics, ticket volume and resolution times, security incident summaries, and cost trends.
Local Presence
While cloud management can technically be done from anywhere, having a provider with local staff matters more than most businesses expect. When you need on-site support for hybrid environments, or when you want a face-to-face strategic review, proximity counts.
The ROI Case for Cloud Managed Services
The math on managed services usually works out for businesses with 25 to 500 employees. Here is why:
A full-time cloud engineer in Nashville costs between $90,000 and $130,000 per year in salary alone. Add benefits, training, tools, and the reality that one person cannot provide 24/7 coverage, and you are looking at $150,000 or more per year for a single person who still takes vacations and might leave.
A managed services engagement for a comparable environment typically runs $5,000 to $15,000 per month, which gives you a team of specialists, 24/7 coverage, established tooling, and no single point of failure.
Beyond direct cost comparison, managed services reduce downtime. The average cost of IT downtime for small businesses ranges from $8,000 to $25,000 per hour depending on the industry. If your MSP prevents even one significant outage per year, the engagement likely pays for itself.
Cloud Managed Services for Nashville Businesses
Nashville’s business landscape has specific characteristics that make cloud managed services particularly relevant. The healthcare sector is massive here — HCA Healthcare is headquartered in town, and hundreds of smaller practices and health-tech companies operate in the region. These organizations need HIPAA-compliant cloud environments with proper documentation and audit trails.
The city’s growth in tech, entertainment, and professional services means many businesses are scaling rapidly and need infrastructure that can keep up without building a large internal IT team. And Nashville’s talent market for cloud engineers is competitive — managed services let smaller companies access expertise they might not be able to recruit directly.
Getting Started with Cloud Managed Services
If you are considering managed services for your cloud environment, start with an honest assessment of where things stand today. Document your current infrastructure, identify your pain points, and get clear on what “better” looks like for your organization.
Then talk to a few providers. Ask them to walk through their onboarding process, show you sample reports, and explain exactly what is and is not included in their pricing. The best MSPs will also do a free or low-cost assessment of your current environment to identify quick wins and potential risks.
Exodata provides managed cloud services for businesses across Nashville and the Southeast, with deep expertise in Azure and AWS environments. If you want to talk through what managed services could look like for your organization, or if you need help with your cloud infrastructure, reach out to our team for a no-obligation conversation about your environment.