If you are planning your 2026 IT budget, you are likely balancing three goals, reduce risk, control costs, and avoid lock‑in. The good news, you can do all three with a pragmatic plan that funds the essentials, leverages month to month services, and reserves capital for upgrades that genuinely move the needle. This guide lays out the key line items, typical Australian cost ranges, where proactive monitoring saves you money, and when to consider server upgrades or virtualisation alternatives to VMware.
What “managed services” really means
Managed services in IT means outsourcing the day to day management of your technology to a team that takes responsibility for monitoring, maintenance, support, and improvement. Instead of paying ad hoc break fix fees, you pay a predictable monthly fee for outcomes, healthy systems, fast support, and fewer incidents.
A managed IT services provider typically delivers:
- Unlimited helpdesk and remote support with clear SLAs
- Proactive monitoring, patching, and firmware updates across servers, endpoints, and network devices
- Backup and disaster recovery management with test restores
- Cyber security alignment to the Essential Eight, including MFA, hardening, and endpoint protection
- Asset and license management, onboarding and offboarding users, and documentation
- Quarterly reviews with transparent reporting on risks, tickets, patch status, and roadmap
Common managed services examples include Microsoft 365 management, managed endpoint protection, managed backups, managed network and Wi‑Fi, managed firewalls, and managed voice and mobile plans.
There are different types of managed services. Core IT support, cyber security services, backups and disaster recovery, cloud hosting services, network and telco, and even application management for tools like ERP or line of business software.
Core budget line items for 2026
Use these headings to structure your spreadsheet and keep approvals simple.
- Managed IT Services and support
- Typical range, $55 to $180 per user per month for SMEs depending on inclusions, locations, and hours. Some firms start lower for base monitoring then add options as you scale.
- Backups and disaster recovery
- Budget per workload and retention target. Cloud backup for Microsoft 365, $4 to $10 per user per month. Server image backups with onsite plus cloud copies, $150 to $400 per server per month depending on storage and RPO.
- Cyber security services
- Monitoring and policy management aligned to Essential Eight, from $15 + GST to $30 + GST per user per month for SMEs is common. Add phishing simulation and security awareness training, $3 to $6 per user per month.
- Endpoint protection and EDR
- Business AV or EDR such as ESET, $3 to $10 per endpoint per month. Include mobile devices in the count if they access business data.
- Cloud subscriptions
- Microsoft 365 Business Premium is roughly $30 to $40 per user per month. Add Azure resources, Cloud PBX, or specific SaaS tools as separate lines with usage notes.
- Telco, internet, SIP, and mobile
- Business NBN varies by speed tier. SIP phone lines are commonly $40 to $60 per line per month. A practical rule is one line per 3 to 4 staff. SIM only mobile plans from around $25 to $50 per month depending on data and international needs.
- Hardware replacement and lifecycle
- Laptops and desktops on a 3 to 4 year cycle. Budget $1,400 to $2,600 per device including setup. Servers on a 5 to 7 year cycle if still required. Networking gear, allow a small pool annually for switches, Wi‑Fi APs, and firewalls.
- Training and change enablement
- Security awareness training plus bite size Microsoft 365 skills sessions. A small monthly allocation per user pays for itself in fewer tickets and stronger security.
- Contingency
- Add 5 to 10 percent for the unexpected, vendor price rises, or compliance asks.
If you prefer transparent, month to month pricing, you can review it managed services, cyber security services, SIP lines, and SIM plans on the Screwloose site.
Why month to month plans protect cash flow
No lock in contracts let you right size quickly. If your team changes, you add or remove users and lines without penalties. This keeps OpEx aligned to headcount, and prevents sunk cost bias from trapping you in unsuitable services. It also encourages your provider to keep earning your business through results, fast support, and measurable risk reduction.
Proactive monitoring cuts tickets and downtime
Reactive support waits for problems. Proactive support finds and fixes issues early, which reduces the total number of tickets and the time your team spends waiting.
Practical examples:
- Patch and firmware schedules reduce the frequency of crashes and vulnerabilities
- Disk space and backup monitoring stops failures before they impact recovery
- Capacity alerts prevent slowdowns that waste staff time
- Standardised builds and automated onboarding reduce setup errors and rework
Over a year, that means fewer interruptions, faster calls, and more predictable weeks. It also means your IT budget funds prevention, not just clean up.
When to consider server upgrades or virtualisation
If you run on premises servers, 2026 is a good year to review age, warranty status, and licensing. Consider an upgrade if:
- Servers are over five years old or out of vendor support
- You see rising hardware incidents or long restore times
- You plan significant software upgrades that need more cores, RAM, or storage
- Your backup RTO and RPO targets are not being met
For virtualisation, you have strong options beyond VMware. Microsoft Hyper‑V remains a stable choice, especially if you are already licensed with Windows Server Datacenter. Xen based stacks with modern orchestration can be effective in cost controlled environments. If you are mostly cloud ready, a partial migration can reduce your on premises footprint, leaving only latency sensitive or legacy workloads on a small host pair.
Sample 2026 budgets
Below are indicative OpEx budgets for planning. Replace with your actual licenses, devices, and provider quotes. All figures are GST exclusive.
15 user business, hybrid work, one small server
- Managed IT Services, $55 per user, $825 per month
- Managed IT Services, $155 per server, $155 per month
- Cyber security services and training, $30 per user, $450 per month
- Microsoft 365 Business Premium, $37 per user, $555per month
- Microsoft 365 backup $7 per user, $105 per month
- Server onsite plus cloud backup $40 per month
- NBN $95 per month;
- 5 SIP lines at $50, $250 per month
- Mobile plans, 10 SIMs at $30, $300 per month
- Hardware lifecycle pool, $250 per month
- Estimated monthly total, $3,025
50 user business, two sites, virtualised hosts
- Managed IT Services, $55 per user, $2,750 per month
- Cyber security services and training, $30 per user, $1,500 per month
- Microsoft 365 Business Premium, $37 per user, $1,850 per month
- Microsoft 365 backup $6 per user, $300 per month;
- Two host image backups with cloud copy, $80 per month
- two NBN links $190 per month total;
- 15 SIP lines at $50, $750 per month
- Mobile plans, 30 SIMs at $35, $1,050 per month
- Hardware lifecycle pool, $700 per month
- Estimated monthly total, $9,170
Answering the big questions you asked
- What is meant by managed services in IT?
- it is a proactive, subscription based model where your provider operates, monitors, and improves your environment to deliver uptime and security at a predictable cost.
- What services do managed IT services provide?
- helpdesk, monitoring, patching, backups, security alignment, endpoint protection, license management, user administration, reporting, and strategy.
- What are managed services examples?
- managed Microsoft 365,
- managed backups
- managed endpoint protection
- managed firewalls
- managed Wi‑Fi
- managed voice and mobile
- managed cloud environments.
- What is the average cost of cyber security services, for SMEs in Australia?
- $30 per user per month for monitoring and management is common, with add ons like phishing simulation or advanced EDR increasing costs. Incident response or audits are quoted per engagement.
- What types of managed services are there?
- core IT support, cyber security, backup and DR, network and telco, cloud hosting and migration, and application management.
If you would like transparent, no lock in pricing, start with a quick look at managed it services and telco options on the Screwloose site. You can also speak with a managed it services provider for an assessment led plan that matches your risk tolerance and budget.
Summary
A strong 2026 IT budget funds the essentials, Managed IT Services, backups, cyber security, endpoint protection, cloud apps, and telco, then sets aside capital for the right upgrades. Month to month services protect cash flow and keep providers accountable. Proactive monitoring reduces tickets and downtime. When servers age out, consider a modest refresh or move select workloads to Hyper‑V or Xen to avoid licensing surprises. If you want a clear, line by line plan with transparent pricing and no lock in, the Screwloose team is ready to help.