Real TCO Math for 10, 25, 50, 100, and 200-Employee Texas Businesses

MSP vs In-House IT — Total Cost of Ownership

The "MSP vs in-house IT" debate is usually framed wrong. The honest comparison is total cost of IT (loaded salaries + tools + workspace + training + downtime + hidden opportunity cost) versus equivalent MSP coverage at the same scope. When you do that math honestly, MSPs win for businesses under 25 employees, co-managed IT wins for 50-500 employee businesses, and internal IT with MSP augmentation wins for 500+ employee businesses with industry-specific specialization needs. This guide gives you the per-employee-tier breakdown for Texas in 2026, the loaded salary ranges that don't appear on most comparison spreadsheets, and the operational realities (coverage hours, skill breadth, compliance, security operations) that determine which model actually fits.

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In-House IT — The Real Loaded Cost

A junior IT technician in Houston: $65K-$95K loaded (salary + benefits + payroll tax + tools + training + workspace). Senior sysadmin or engineer: $110K-$165K loaded. CIO or CISO: $250K-$400K+ loaded. To get 24/7 coverage and full skill breadth (help desk + network + security + cloud + compliance) you need 4-7 people minimum. Most SMBs cannot justify that headcount.

MSP Cost — Per-User Pricing

Texas market 2026: $125-$275 per user per month for full managed IT including 24/7 coverage, full security stack (EDR, PAM, MFA, SIEM/SOC), Microsoft 365 or Google Workspace licensing, vCIO services, and compliance support. Co-managed IT (you keep an internal IT lead): $75-$140 per user per month.

Coverage Hours — The Hidden Variable

One internal IT person covers ~40 hours per week. After hours, weekends, vacations, sick days, and family emergencies are uncovered (or covered by a panicked phone call to that person at 2 AM). MSPs cover 24/7/365 by definition. Most ransomware attacks land outside business hours specifically because internal IT is asleep.

Skill Breadth — One Person Cannot Cover Everything

Modern IT requires depth in: Microsoft 365 admin, identity (Entra ID, Active Directory), networking, firewall management, EDR, PAM, cloud (Azure/AWS), backup, compliance frameworks (HIPAA/SOC 2/CMMC/FTC Safeguards), incident response. No single person is deep in all of these. MSPs spread these specializations across a team.

Compliance & Security Operations Cost

Running a real security operations program (24/7 SOC, threat hunting, incident response) requires 4-6 dedicated security analysts at $90K-$150K each. That is a $400K-$900K annual security operations cost before tools. MSPs share this cost across hundreds of clients — you pay a fraction.

The Hybrid Reality (Co-Managed IT)

For 50-500 employee Texas firms, co-managed IT typically wins on TCO: keep your internal IT person for daily user support and institutional knowledge; add an MSP for 24/7 coverage, security operations, vCIO, and compliance leadership. The combined cost is usually less than either pure model and the coverage is dramatically better.

Why Choose LayerLogix?

Serving businesses throughout the Greater Houston area including Houston, The Woodlands, Sugar Land, Spring, Conroe, Dallas, Fort Worth, Austin, San Antonio.

Lower Cyber Insurance Premiums

Carriers materially prefer documented MSP coverage with PAM, MFA, immutable backup, and incident response capability. Documented MSP engagement frequently reduces premium quotes 10-30% on renewal — often more than the MSP fee differential vs in-house IT.

No Hiring Risk, No Severance Risk, No Retention Risk

An IT hire is a 6-month search and a major commitment. The wrong hire is catastrophic. An IT lead who quits at the wrong moment leaves you exposed for months. MSP engagements are month-to-month or annual — adjust scope as the business evolves without HR drama.

Predictable Monthly Spend

Internal IT costs spike on emergency projects, certifications, vendor escalations, and burnout-driven turnover. MSPs deliver predictable monthly spend that finance teams can budget against. Over a 3-year period, MSP TCO is typically 40-70% less than equivalent internal coverage with comparable skill breadth.

Senior Strategic Leadership Without Senior Salary

vCIO and vCISO services bundled into managed IT engagements give you C-suite-grade strategic leadership at a fraction of the cost of full-time hires. A vCIO engagement is typically $4K-$15K per month versus $250K-$400K plus benefits for a full-time CIO.

Compliance Built-In, Not Bolted On

HIPAA, FTC Safeguards Rule, CMMC, PCI-DSS, SOC 2 requirements get baked into operations from day one when handled by an MSP with the relevant expertise. Internal IT teams typically discover compliance requirements during the audit cycle and scramble — usually expensively.

Our Process

10 employees: in-house IT does NOT pencil out. One IT person costs $65K-$95K loaded; full managed IT runs $1,250-$2,750/month ($15K-$33K/year). MSP wins by 60-80% on TCO with broader skill coverage and 24/7 reach.

25 employees: still strongly MSP territory. Full managed IT runs $3,125-$6,875/month ($37K-$83K/year) versus $65K-$140K loaded for one internal IT person who cannot cover 24/7, security operations, or vCIO function alone.

50 employees: the breakeven zone where co-managed IT becomes the dominant model. Internal IT person handles daily ops ($85K-$120K loaded); MSP handles 24/7, security operations, vCIO ($3,750-$7,000/month). Combined TCO ~$130K-$210K/year — less than two internal IT hires with dramatically better coverage.

100 employees: co-managed IT almost always wins. Internal IT team of 1-2 people handles daily ops; MSP handles 24/7, SOC, vCIO, compliance ($7,500-$14,000/month). Combined TCO ~$220K-$370K/year versus $400K-$700K for an equivalent internal-only team.

200 employees: co-managed IT with an internal team of 2-5 people. MSP owns specific functions where in-house cannot match scale (security operations, after-hours, compliance, M&A integration). Combined TCO scales to $400K-$800K/year — still meaningfully less than equivalent internal-only coverage.

500+ employees: typically internal IT director with co-managed MSP for specialized functions. The economics increasingly favor internal IT depth, but specialized functions (24/7 SOC, compliance, vCISO) remain MSP-economical even at this scale.

When to insource: when your IT team becomes a competitive advantage in your industry (e.g., financial services with proprietary trading systems, healthcare with custom clinical platforms), the strategic case for internal depth eventually overrides the cost case for MSP delivery.

Frequently Asked Questions

Is an MSP really cheaper than hiring my own IT person?▼

For businesses under 25 employees, almost always yes. A single junior IT hire costs $65K-$95K loaded; full managed IT for 25 users runs $37K-$83K/year — and you get 24/7 coverage, security operations, and vCIO services that one IT person cannot deliver. For 50-100 employee businesses, co-managed IT (one internal lead + MSP) usually beats either pure model. For 200+ employees, the math gets more nuanced and depends on industry-specific requirements.

What about institutional knowledge — does an MSP know our business?▼

This is the legitimate concern with full managed IT for established businesses. The mitigations: (1) co-managed IT preserves the internal lead's institutional knowledge while augmenting with MSP scale, (2) good MSPs invest in onboarding (60-90 days documenting your environment, applications, vendors, processes) so knowledge persists across staff turnover at the MSP, (3) institutional knowledge is documented in tickets, runbooks, and knowledge bases — not just in one person's head. The risk of losing institutional knowledge when a single internal IT person leaves is often higher than with an MSP.

How do MSPs handle on-site emergencies?▼

Texas-headquartered MSPs (like LayerLogix) deliver same-day on-site response across the markets we serve (Houston, DFW, Austin, San Antonio, etc.). Documented SLAs typically guarantee 2-4 hour on-site response for critical issues. National MSPs that subcontract on-site work usually have looser SLAs and slower response. Always verify on-site response capability and SLA before signing.

What happens if our MSP relationship goes badly?▼

Plan for it from day one. Insist on: (1) documented IT environment, runbooks, and credentials retained by you (not the MSP), (2) data ownership and retention clauses, (3) reasonable termination clauses (typically 30-90 days with documentation handoff), (4) credentials rotation procedures for offboarding. A bad MSP relationship is recoverable if the documentation is yours; if the MSP holds all the knowledge in their heads, switching becomes painful regardless of model.

Can we use an MSP just for security and keep IT internal?▼

Yes — this is a common variant of co-managed IT. The MSP delivers 24/7 SOC, EDR/PAM management, incident response, vCISO, and compliance support; your internal team handles all daily IT operations. Pricing typically runs $40-$120 per user per month for the security-only scope, depending on SOC depth and tooling. This works well for businesses that have strong internal IT but limited security operations capability.

How do we calculate our actual current IT cost for comparison?▼

Add: internal IT salaries (loaded with benefits + payroll tax + tools + training + workspace), software/SaaS licensing for IT tools (RMM, EDR, backup, SIEM), hardware refresh budget, vendor management overhead, downtime cost (use our Downtime Cost Calculator), and the hidden cost of opportunity loss when your IT person is overloaded. Most businesses dramatically under-count their actual IT spend by 30-50% — making the MSP comparison look worse than it actually is.

Ready to Get Started?

Contact LayerLogix today for a free consultation. We serve businesses throughout Houston, The Woodlands, Sugar Land, and the surrounding Greater Houston area.

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