When a small business should hire internal IT instead of an MSP
There is a real crossover point. We would rather tell you where it is than sell past it.
We are a managed services provider, so the honest version of this article costs us business. But the crossover point is real, and pretending it is not is how MSPs end up with resentful clients who outgrew them two years ago. Here is where the line actually falls.
The three signals you have outgrown an MSP
One factor rarely decides it. Two or three of these together usually do:
- Headcount. Somewhere around 50–75 staff, the fully-loaded cost of a good internal hire starts to rival the MSP fee, and you get someone in the building full-time.
- On-site demand. If people need hands-on help several times a day, remote-first support with scheduled on-site visits stops fitting, however fast the response.
- Specialised systems. A bespoke line-of-business application, a regulated lab, a manufacturing floor, where deep institutional knowledge of one weird system is something a generalist MSP will always carry less of than a dedicated employee.
The question is not “MSP or hire.” It is which parts belong in the building and which parts you never want to staff for.
The hybrid most companies actually land on
The crossover is rarely clean. What works for most companies past the line is one internal generalist for the day-to-day, the person who knows where everything is and whom people walk up to, backed by an MSP or specialist firm for the things you should never hire full-time for: security monitoring, compliance audits, after-hours cover, and holiday backup. Your one hire is not on call at 3am and does not personally need to know SOC 2; the specialist carries that.
What an MSP still does better past the line
Even at 100 people, a few functions stay cheaper and safer outsourced. Twenty-four-hour security operations needs a rota no single hire can cover. Compliance work needs someone who runs a dozen audits a year, not one. And when your internal person is on holiday or leaves, the MSP is the continuity that stops the whole function walking out the door with them.
Our actual advice
If you are under about 40 people, an MSP is almost always the right call and hiring is premature. Between 40 and 75, plan the hybrid deliberately rather than drifting into it. Past 75 with on-site demand or specialised systems, make the internal hire and keep a specialist on retainer for the parts that never justify a salary. We would rather help you draw that line than quietly sell past it. The clients we keep longest are the ones we were straight with about when to grow beyond us.
Running into this in your own business? We’ll take a look for free and tell you exactly where you stand.