Co-managed IT is a service model where a managed IT provider works alongside your existing internal IT staff — filling gaps in coverage, expertise, or capacity without replacing your team. It sits between fully managed IT (where an MSP handles everything) and fully in-house IT (where your internal team handles everything). For businesses that already have an IT person or small IT team but need more depth, co-managed IT is often a better fit than either extreme.
The Three Models, Side by Side
| Factor | In-House IT Only | Co-Managed IT | Fully Managed IT |
|---|---|---|---|
| Who handles IT | Your internal staff | Your staff + MSP together | MSP handles everything |
| Best for | Businesses with a capable, fully-staffed IT team | Businesses with 1–3 IT staff who need backup or specialized support | Businesses with no internal IT staff |
| Coverage | Business hours only | 24/7 monitoring + business hours staff | 24/7 monitoring and support |
| Cost structure | Full-time salary + benefits | Internal salary + lower MSP fee | Flat monthly MSP fee |
| Depth of expertise | One person's skill set | Internal knowledge + MSP specialists | Full MSP team across all disciplines |
| Scalability | Hire more staff to scale | Add MSP services as needed | Adjust plan as you grow |
| Cybersecurity | Depends on internal skills | MSP layer adds monitoring and tools | Fully handled by MSP |
| Strategic IT planning | If your IT person has time | Shared between staff and MSP vCIO | MSP vCIO handles planning |
What Co-Managed IT Actually Looks Like Day to Day
In a co-managed arrangement, your internal IT person or team keeps doing what they do well — managing users, handling day-to-day tickets, overseeing hardware, maintaining the institutional knowledge of your specific environment. The MSP layers on top of that with what your internal team can’t reasonably cover on their own.
That typically means:
24/7 remote monitoring and alerting. Your internal IT person goes home at 5pm. A co-managed IT provider monitors your servers, endpoints, and network around the clock and handles alerts before they become crises.
Specialized expertise on demand. Your IT generalist knows your environment well but may not be a cybersecurity specialist, cloud architect, or compliance expert. Co-managed IT gives you access to those specialists when you need them without putting them on payroll.
Backup and overflow support. When your IT person is out sick, on vacation, or dealing with a major project, the MSP covers the gap. No coverage lapses, no tickets piling up.
Toolset and platform access. MSPs invest in enterprise-grade monitoring, documentation, security, and management platforms. In a co-managed model, your internal team gains access to those tools — often significantly upgrading what they can do without adding budget for individual licenses.
Strategic IT planning. Many co-managed plans include vCIO involvement — someone thinking about your technology roadmap, vendor contracts, and long-term infrastructure decisions alongside your internal team, not instead of them.
When Co-Managed IT Makes More Sense Than Fully Managed IT
Co-managed IT is the right model when one or more of these apply:
You already have an IT person or small team you want to keep. Your internal IT staff have institutional knowledge, vendor relationships, and user trust that takes years to build. Replacing them with a fully managed model loses that. Co-managed preserves it.
Your internal team is capable but stretched thin. One IT person supporting 50 users cannot also maintain 24/7 monitoring, run a vulnerability management program, handle a cybersecurity incident, manage a cloud migration, and keep up with daily tickets. Co-managed IT removes the capacity ceiling without adding headcount.
You need specialized expertise your team doesn’t have. Cybersecurity, compliance (HIPAA, CMMC), Microsoft 365 governance, and cloud architecture require deep specialization. Co-managed IT gives you that depth without hiring specialists at $90,000–$130,000 per year each.
You’re in a regulated industry. HIPAA, CMMC, and PCI-DSS all require controls and documentation that most small IT teams can’t maintain alone. A co-managed IT provider handles the compliance layer while your internal team handles day-to-day operations.
Your team needs a safety net, not a replacement. Co-managed IT is the answer to “what happens when our IT person leaves, gets sick, or is overwhelmed?” — without making the organizational change of fully outsourcing.
When Fully Managed IT Makes More Sense
Fully managed IT is the right model when:
- You have no internal IT staff and don't plan to hire any
- Your business is too small to justify a dedicated IT hire (typically under 15–20 employees)
- You want a single point of accountability for all technology — one contract, one team, one number to call
- You've tried managing IT internally and found it too costly or inconsistent
For most businesses under 30 employees without existing IT staff, fully managed IT is the more practical and cost-effective model.
Co-Managed IT Pricing vs. Fully Managed IT Pricing
Co-managed IT plans are typically priced lower than fully managed plans because the MSP is supplementing rather than replacing an internal function. You’re paying for the monitoring, tools, specialist access, and overflow coverage — not for someone to handle every ticket.
A co-managed IT plan for a business with one internal IT person and 40–75 users typically runs $1,500–$4,000 per month, compared to $4,000–$8,000 per month for a fully managed plan at the same size.
The total cost model is different though. Co-managed IT means you’re also paying a full-time IT salary. Fully managed IT replaces that salary entirely. For businesses where the math works out roughly even, the decision comes down to whether you want to keep the institutional knowledge and control of an internal team — or prefer the simplicity and depth of full outsourcing.
How BSGtech Delivers Co-Managed IT in Chicago
BSGtech has worked alongside internal IT teams at Chicago-area businesses since 2009. Our co-managed IT model is built around your team’s existing strengths — we identify where the gaps are and fill them specifically, without stepping on the work your IT person does well.
Every co-managed engagement starts with a free IT assessment that maps your current environment, your internal team’s capabilities, and where coverage or expertise gaps exist. From there we build a plan that complements your team — not one that competes with it.
Frequently Asked Questions
What is co-managed IT?
Co-managed IT is a service model where a managed IT provider works alongside a business’s internal IT staff rather than replacing them. The MSP provides 24/7 monitoring, specialized expertise, backup coverage, and enterprise-grade tools while the internal team maintains day-to-day operations and institutional knowledge of the business environment.
How does co-managed IT work?
In a co-managed IT arrangement, responsibilities are divided between your internal IT team and the MSP based on each party’s strengths and your business’s needs. Typically the internal team handles daily user support and on-site work while the MSP handles monitoring, security, compliance, specialized projects, and overflow. The exact division is defined in the service agreement.
Is co-managed IT cheaper than fully managed IT?
Co-managed IT plans are typically lower in monthly cost than fully managed plans because the MSP is supplementing rather than replacing your IT function. However, co-managed IT also means you’re still paying an internal IT salary, so total cost depends on your headcount and needs. For businesses with an existing IT person they want to retain, co-managed IT is almost always more cost-effective than replacing that person with a fully managed plan.
What is the difference between managed IT and co-managed IT?
Fully managed IT means an MSP handles all of a business’s IT needs — there is no internal IT staff. Co-managed IT means the MSP works alongside an existing internal IT team, supplementing their capacity and expertise rather than replacing them. Co-managed IT is designed for businesses that already have IT staff and want to extend what those staff can do.
Who should consider co-managed IT services?
Co-managed IT is the right fit for businesses that have one or more internal IT staff members but need 24/7 monitoring coverage, specialized expertise in areas like cybersecurity or compliance, backup coverage during absences, or access to enterprise-grade tools their team can’t afford to license independently. It’s particularly common at mid-market businesses with 30–200 employees and a small IT department.
