In recent years, thought leaders such as Service Leadership and Gary Pica have strongly influenced the MSP community toward adopting the pure play model—offering only fixed-price contracts and moving away from any form of time-and-materials or hybrid engagements. Many MSPs have gone so far as to terminate clients unwilling to make the shift.
The logic behind this trend is clear: fixed-fee agreements create predictable revenue, simplify management, and encourage preventive operations. But as more providers embrace this model, an important question remains—is pure play truly the best approach for every MSP?
The Case for the Pure Play MSP Model
There are undeniable advantages to operating as a pure play MSP. The fixed-price model streamlines both operations and client relationships, creating a foundation for predictable profitability.
Support delivery becomes more efficient because the MSP is fully incented to stabilize client environments and minimize reactive work. The fewer support hours required, the higher the margin—naturally driving teams to standardize tools, eliminate variability, and focus on proactive maintenance.
Agreement management also becomes simpler. Managing multiple contract types can consume significant administrative bandwidth, especially for growing MSPs. A single pricing and service model reduces complexity and makes it easier to onboard new clients and staff consistently.
Client approvals are no longer an obstacle to preventive work. Under fixed-price arrangements, technicians can perform updates, patches, and maintenance without waiting for client authorization, eliminating a major friction point in account management.
Finally, client and provider incentives are fully aligned. Both sides benefit when the network is stable and reliable, and both share the pain when downtime occurs. This creates a true partnership dynamic where both parties are working toward the same outcome.
Not surprisingly, data from many industry analysts shows that MSPs operating purely under fixed-price agreements tend to report the highest profitability. The model is clean, efficient, and predictable—attributes any service organization values.
The Hidden Challenges of Going All-In on Fixed Price
Despite its appeal, the pure play model introduces tradeoffs that are often overlooked. For many MSPs, especially those in competitive or mixed-market regions, being too rigid in contract structure can limit sales opportunities and make it harder to win new business—particularly with co-managed IT clients or enterprise environments that require flexible engagement terms.
Operating exclusively under a fixed-price model also restricts the ability to tailor solutions for clients who are still evolving in maturity. Some organizations prefer to start with limited managed services, retain some internal IT control, or gradually move toward a fully outsourced model. For these clients, flexibility is a key differentiator—and MSPs who can offer it often have a strategic advantage.
However, this flexibility comes at a cost. Managing multiple agreement types adds operational complexity. It requires supporting two distinct delivery philosophies—one focused on proactive management and another on reactive or project-based work. Each model brings its own expectations, workflows, and billing structures. Without the right systems in place, the added complexity can quickly erode margins and create confusion within the team.
Even small administrative differences can have a major impact. For example, tracking and managing service credits in a per-diem or retainer environment is essential but becomes almost irrelevant in a fixed-fee structure. Handling both simultaneously requires precision, automation, and excellent visibility across systems.
The Competitive Advantage of Flexibility
While many MSPs strive to standardize everything, there is also opportunity in mastering complexity. Offering a mix of fixed-price and flexible agreements allows an MSP to engage a wider audience and stand out from competitors who offer only one rigid model.
Flexibility opens doors with clients who may be hesitant to commit to a fully managed approach. By providing retainer or variable labor agreements alongside managed services—such as security, backup and disaster recovery, or cloud solutions—a provider can earn trust, demonstrate value, and gradually transition clients to a fully managed relationship over time.
More importantly, the ability to execute this hybrid approach well becomes a competitive moat. Doing something difficult—efficiently managing two distinct operational models—creates a barrier to entry. Few competitors are willing to take on that challenge, which makes those who do stand out.
MSPs that succeed with this approach tend to experience stronger sales performance, broader market reach, and increased client retention. By offering choice, they appeal to both traditional SMB clients and sophisticated IT departments seeking collaboration rather than full outsourcing. The result is a business that grows faster and holds onto clients longer.
Making Flexibility Work Operationally
The key to making a flexible engagement strategy work is operational excellence. It requires the ability to identify and control the true drivers of quality and profitability across all service types. This means tracking utilization, response time, client experience, and margin in real time—while ensuring data flows seamlessly across sales, service, and finance.
Automation plays a central role. MSPs that use automation to unify their PSA, RMM, CX, and security systems can create the visibility and control needed to manage both fixed and variable contracts efficiently. When supported by strong processes and accurate data, even complex business models can run smoothly and profitably.
This is where tools like FITware deliver measurable impact. FITware overlays the PSA, RMM, and financial stack to provide actionable insights into performance, staffing, efficiency, and profitability—across all engagement types. It enables MSPs to handle the added complexity of mixed agreements without sacrificing accuracy, consistency, or scalability.
A Smarter Way to Compete in a Crowded Market
Both pure play and hybrid models can succeed, but the best choice depends on the MSP’s market, client mix, and operational maturity. Pure play models simplify management and drive predictable profitability, while flexible engagement strategies expand the addressable market and enhance differentiation.
The real key to success is not choosing one model over the other—it’s building the operational discipline to manage whichever model best aligns with your growth goals.
At FITware, we believe MSPs that combine strong process maturity with intelligent automation can outperform their peers regardless of contract type. Whether you’re refining your pure play model or expanding into more flexible agreements, FITware provides the visibility, structure, and data needed to scale profitably and compete more effectively in a crowded market.
