Fractional IT vs. Managed Service Providers: What's the Difference?
MSPs and fractional IT solve similar problems differently. Here's how to decide which model fits your remote team.
If you're shopping for IT help, you've probably come across two models: managed service providers (MSPs) and fractional IT contractors. They sound similar. They're not.
Understanding the difference matters because the wrong choice costs you money and, more importantly, doesn't actually solve your problems.
What an MSP does
A managed service provider is a company that manages IT infrastructure for multiple clients simultaneously. The traditional MSP model was built for businesses with physical offices, on-premise servers, and local networks.
MSPs typically operate on a per-device or per-user pricing model. They provide a ticket portal where your employees submit IT requests. A technician from the MSP's team picks up the ticket, works on it, and closes it out.
The model works. It's been the standard for decades. But it was designed for a world where "IT" meant keeping the office network running and the email server online.
What fractional IT does differently
A fractional IT contractor is a single dedicated professional (or a small team) who embeds directly in your company. They're not managing 50 clients through a ticket queue. They're managing your IT as if they were your in-house hire.
The difference is engagement model, not capability. A fractional IT contractor:
- Knows your stack inside out. They're not learning your environment every time they pick up a ticket. They set it up, they manage it, they know it.
- Works proactively, not reactively. Instead of waiting for tickets, they're monitoring your systems, running access reviews, and catching problems before your team notices.
- Communicates where your team communicates. Usually Slack or Teams, not a separate ticket portal. Your employees get help in the same tool they already use all day.
- Handles strategic IT work. Security posture, vendor evaluations, compliance questionnaires, tool consolidation. MSPs rarely touch this. It doesn't fit the ticket model.
Where MSPs still make sense
MSPs aren't bad. They're just built for a different use case. If your company has physical offices with on-premise infrastructure (servers, networking equipment, printers), an MSP is probably the right fit. They have the staffing and logistics to support that kind of environment.
They also make sense at larger scale. Once you're past 500 employees, you may need the bench depth that an MSP provides.
Where fractional IT wins
For remote-first companies between 10 and 200 employees, fractional IT is almost always the better choice. Here's why:
Cost. MSPs charge per device and per user, which adds up fast. A fractional IT retainer is a flat monthly fee that's typically 30 to 50% less than an MSP contract for the same headcount.
Fit. Remote teams don't need someone managing a server room. They need someone managing SaaS tools, identity providers, device compliance, and security policies. That's a different skill set.
Relationship. With a fractional contractor, you have a direct relationship with the person doing the work. With an MSP, you're submitting tickets to a rotating cast of technicians who may or may not understand your setup.
How to decide
Ask yourself three questions:
- Is your team primarily remote or in-office?
- Is your infrastructure primarily cloud-based or on-premise?
- Do you need more than 200 employee seats covered?
If your answers are remote, cloud, and no, then fractional IT is the better model. If you've got offices with physical infrastructure or you're at enterprise scale, an MSP might be the better fit.
The worst choice is no choice. Doing nothing about IT because you can't decide between models is how remote teams end up with security gaps, SaaS waste, and founders doing password resets at midnight.