What's the difference between break-fix, managed IT, and co-managed IT support?
Three IT support models dominate the New Zealand SMB market: break-fix (pay-per-incident), managed IT (fixed monthly subscription), and co-managed IT (a hybrid model where an external provider works alongside your internal IT staff). The right model depends on three things: how many staff your business has, whether you already employ internal IT, and how much unplanned downtime your operations can absorb. This guide defines all three models, compares them side by side with NZ industry pricing benchmarks, and ends with a decision framework for choosing the right one.
Not sure which IT support model suits your business? Here’s a direct comparison of the three most common approaches used by New Zealand SMBs, based on industry data from a survey of over 750 IT services firms.
What is break-fix IT support?
Break-fix IT support is an hourly, pay-per-incident model where a business calls an IT provider only when something breaks. There is no proactive monitoring, no scheduled maintenance, and no ongoing relationship between incidents.
In New Zealand, break-fix typically bills at $120 to $240 per hour with a one-hour minimum charge per call-out. Some providers offer block-of-hours discounts of 5 to 20% if the business pre-purchases a set number of hours.
Break-fix suits very small businesses (1 to 5 staff) with simple IT setups and a high tolerance for downtime, or larger businesses with a competent internal IT person who only need occasional specialist help (such as cloud migrations or security implementations). It is rarely cost-effective for general day-to-day IT support in any organisation with more than five staff.
The structural weakness of break-fix is the misaligned incentive: the provider earns revenue when systems fail, so they have no commercial reason to prevent failure.
What is managed IT support?
Managed IT support is a subscription model where a business pays a fixed monthly fee for a defined scope of services including 24/7 proactive monitoring, automated patching, helpdesk access, security tooling, and strategic IT planning. The provider is paid the same amount regardless of how many issues arise, so the commercial incentive is to prevent problems rather than respond to them.
In New Zealand, managed IT pricing typically follows one of two structures:
- Per-user fixed monthly fee: $75 to $180 per user per month (OxygenIT’s pricing model, and the most common SMB structure)
- Per-device fixed monthly fee: $240 to $480 per server, $80 to $120 per desktop, approximately $10 per mobile device (NZ industry averages, common in asset-heavy environments)
Managed IT suits SMBs with 10 or more staff who need a fully outsourced IT department covering helpdesk, on-site support, cybersecurity, backup, and strategic planning. Hiring a single internal IT person typically becomes more cost-effective than managed IT only once an organisation reaches approximately 100 employees, because below that threshold a single hire cannot reasonably cover the full skill range required.
What is co-managed IT support?
Co-managed IT support is a hybrid model where an external IT provider works alongside a business’s existing internal IT staff rather than replacing them. The internal team handles routine, business-specific work; the external provider fills gaps in capacity, expertise, or after-hours coverage.
In New Zealand, co-managed pricing is hybrid: a fixed monthly fee scoped to the specific services the internal team needs help with, typically lower than a full managed rate. Common scopes include after-hours and weekend support, escalated network or security issues, infrastructure project delivery, vCIO or vCSO advisory, and access to enterprise-grade monitoring and ticketing tools.
Co-managed suits businesses with 1 to 5 internal IT staff who need specialist backup or coverage their in-house team cannot reasonably maintain alone. The most common reasons NZ businesses adopt co-managed are 24/7 incident coverage, cybersecurity expertise (particularly ISO 27001 or SMB1001 alignment), and cloud architecture for projects beyond their internal team’s day-to-day work.
The figures below are New Zealand industry averages from a survey of over 750 IT services firms (Service Leadership 2024 SMB IT Pricing Index). OxygenIT’s own pricing follows the per-user managed IT structure described above ($75 to $180 per user per month). The table also includes co-managed IT for direct comparison.
| Service Model | Response Time | Cost Model | Proactive Monitoring | Strategic IT Planning | Best For |
|---|---|---|---|---|---|
| Break-Fix (Time & Materials) | No guarantee. Most firms offer 60-minute or 30-minute response during business hours only. No after-hours coverage unless separately arranged. | Per-incident. Billed hourly at $120-$240/hr with a one-hour minimum. Block-of-hours discounts of 5-20% may be available. Budgeting is unpredictable -- costs may be zero one month and thousands the next. | No -- the provider has no incentive to prevent problems, because they are paid when things break. | No -- no technology roadmap, no quarterly reviews, no alignment with business goals. | Businesses that already have a competent internal IT person and only need occasional specialist project work (e.g. cloud migration, cyber security implementation). Not recommended for general day-to-day IT support. |
| Managed IT Services | SLA-backed. OxygenIT guarantees 1 hour or less for normal problems and within 15 minutes for emergencies. After-hours support available any time, any day. | Fixed monthly fee per device: $240-$480/server, $80-$120/desktop, approx. $7.50/mobile device (NZ industry averages). Predictable, no surprise invoices. Includes helpdesk, monitoring, security, and backup. | Yes -- 24/7 remote monitoring watches for developing problems, security issues, and performance degradation before they become outages. | Yes -- quarterly technology review meetings covering IT budget, critical projects, compliance, cyber security, and recommendations for new equipment and upgrades. | SMBs with 10-100+ staff who need a fully outsourced IT department. Covers helpdesk, on-site support, cyber security, backup, and strategic planning. Not cost-effective to hire internally until you reach approximately 100 employees. |
| Co-Managed IT | SLA-backed for escalated issues. Your internal IT handles first response for routine tasks. OxygenIT responds within 15 minutes for escalations and emergencies. | Hybrid. Fixed monthly fee scoped to the specific services your internal team needs help with -- typically lower than a full managed rate. Fills gaps rather than replacing your IT staff. | Yes -- shared between your internal IT team and OxygenIT. Access to our monitoring toolset and ticketing system. | Yes -- collaborative with your IT manager. We provide specialist expertise, project support, and a second opinion on major technology decisions. | Businesses with 1-2 internal IT staff who need specialist backup for escalations, after-hours coverage, infrastructure projects, or expertise their in-house team doesn't have (e.g. cyber security, cloud architecture). |
Pricing figures are NZ industry averages based on a survey of over 750 IT services firms and do not reflect OxygenIT's specific pricing. Contact us for a tailored quote based on your environment.
Which IT support model is right for your business?
Use these three questions to identify the model that fits your business.
1. How many staff do you have?
| Staff size | Existing internal IT | Recommended model |
|---|---|---|
| Under 5 | None | Break-fix is acceptable |
| 5 to 100 | None | Managed IT |
| 5 to 100 | 1-2 internal IT staff | Co-managed IT |
| Over 100 | Internal IT department | Internal IT + managed or co-managed for specialist gaps |
2. What is the cost of one hour of unplanned downtime to your business?
If unplanned downtime measurably costs revenue, customer trust, or compliance standing, the proactive monitoring built into managed and co-managed IT pays for itself. Break-fix is only viable if downtime is genuinely tolerable.
3. Do you have compliance or security requirements?
| Requirement level | Recommended model |
|---|---|
| No formal requirements | Any model |
| Industry standards (SMB1001, Privacy Act 2020) | Managed or co-managed IT with cybersecurity included |
| Formal certifications (ISO 27001) | Managed IT delivered by an ISO-certified provider |
If two or more of the three answers point to managed or co-managed IT, break-fix is almost certainly costing you more than a fixed-fee model would.