How Midmarket CIOs Can Reduce MSP Pricing Surprises

Preventing MSP pricing ‘gotchas’ is not about mistrusting providers; it’s about applying due diligence to contracts and hidden costs.

MSPs are still key to critical IT enablement for many midmarket organizations. According to MES Computing’s IT Leaders Spending Intent survey, 55.8 percent of midmarket IT leaders are still allocating budgets for MSPs in 2026.

When midmarket CIOs sign managed services contracts, the expectation is usually straightforward: pay a monthly fee, sign a contract, outsource complexities and, hopefully, encounter very few surprises.

However, as MSPs continue to bundle expanded support tiers, AI‑enabled services and usage‑based pricing into contracts, many midmarket IT leaders are discovering that the gap between the quoted rate and the true total cost of ownership is widening—often well after the contract is signed.

One example: Info-Tech Research Group reported earlier this month that Microsoft Enterprise Agreement pricing has “increased significantly” in 2026 after discount tiers were cut and double-digit SKU-level price adjustments were implemented. Organizations at B, C and D tiers face price hikes between 6 percent and 12 percent, according to Info-Tech.

In a statement from a spokesperson to MES Computing, Microsoft said: “As part of our ongoing commitment to simplify our pricing experience, we are standardizing our Online Services products pricing structure within our volume licensing programs. This action allows us to deliver more consistent and transparent pricing and better enable clear, informed decision making for customers and partners,” and referred to its online guidance.

[RELATED: What AI Is Actually Changing About Managed Services And What It Isn’t]

In addition to expanded services and offering AI capabilities, acquisitions can force MSPs to pass price hikes on to their customers, and there is probably no greater example of the havoc that can wreak with IT budgets than Broadcom’s acquisition of VMware.

One of the biggest issues that IT midmarket leaders are still facing is fallout from Broadcom’s acquisition of VMware, MES Computing’s State of the Midmarket Fall 2025 report prepared in collaboration with research firm Gartner found. Some VMware customers face 10X price jumps, according to reports.

Some MSPs say they are aware of customers’ price pain points and have attempted to address them with new offerings and services.

Recently, NWN, an AI-enabled MSP, unveiled new features in its Intelligent Cloud service including automated, centralized monitoring; analytics; and workflow insight for Microsoft Azure, Amazon Web Services and on-premises environments.

“As AI workloads continue to scale, IT leaders are facing increasing budget pressure, not just from higher consumption, but from the unpredictability that comes with it,” Dean Fernandes, CTO of NWN, an AI-driven MSP, said in an emailed statement to MES Computing.

NWN’s platform “is designed to bring control and clarity back to IT spending,” he said. The key to that are FinOps principles embedded in the platform, Fernandes said.

“By embedding FinOps principles directly into our platform and operating model, we enable organizations to align financial accountability with engineering and operations,” he said.

Jake Madders, co-founder and director of Hyve Managed Hosting, a VMware cloud service provider, said that after fallout from the Broadcom acquisition, Hyve strategized to help customers who were potentially threatened with significant price increases for their VMware infrastructure.

"We looked at each customer individually and tried to get their bill back to where it was. We changed their servers to accommodate cheaper licensing," Madders told MES Computing in a 2024 interview.

[RELATED: 5 Midmarket Alternatives To Broadcom-VMware Licensing Price Hikes]

Despite MSPs that may strive to help customers reduce costs, for midmarket organizations with strict IT budgets, the overarching issue remains: how to spot red flags for potential hidden charges and price spikes when dealing with MSPs.

4 Ways To Reduce MSP Pricing Surprises

Many MSP contracts evolve over time through usage adjustments, expanded service tiers and periodic pricing revisions. MES Computing reporting shows that IT leaders who fail to revisit contract terms annually are more likely to absorb unplanned increases tied to support levels, response times or newly bundled services.

Contract renewal periods are ideal times to negotiate and drill down on contract terms.

Managed service billing surprises rarely appear as single-line items on a bill. Rather, they are often subtle adjustments to how services are metered and delivered. Some MSPs can charge 1.5 to 2 times their advertised rate for out-of-scope work: after-hours/holiday support, hardware updates, emergency response, etc.

Some MSP customers have been surprised by per-device charges that extend beyond laptops and servers to printers, thin clients, switches and other hardware, according to tech consulting firm Teal.

CIOs should also check for basic billing errors and duplicate invoices, which can compound costs in long‑term contracts.

An analysis by UnderDefense points to even more granular traps within SOC-as-a-Service (SOCaaS) models. A common oversight is the variable cost of data ingestion and log retention.

Some SOCaaS providers even charge separately for the actual remediation of a threat, meaning the organization pays once for the alert and a second time for the solution.

Preventing MSP pricing “gotchas” is not about mistrusting providers; it’s about applying the same due diligence to even the most trusted MSPs that IT leaders already apply to cloud spending, software licensing, and other investments.

The service provider industry is becoming increasingly complex. In an AI-frenzied world, MSPs are piling AI services and security offerings on top of their current platforms. In 2026 and beyond, the most successful midmarket IT leaders will have firm oversight on provider contracts and costs and avoid providing reasons to CFOs and boards for IT overspend.