Why Block Hours Almost Always Cost You More Than a Plan

Block-hour IT packages are a popular middle ground: prepay for 25, 50, or 100 hours of support and burn them down over the year. The pitch sounds reasonable. The math, in practice, almost always tilts toward a Managed plan instead. This post explains why.

The block-hour pitch

A vendor sells you a block of, say, 50 hours at a discount off their hourly rate. At our rates, 50 hours × $150/hr (block prepay rate) = $7,500 prepaid. You can pull from that block when you need work. Our block minimum is 10 hours, $1,500 — deliberately set low to keep the door open for small customers who only need us a few times a year.

It feels prudent. It looks cheaper than a Managed plan in the spreadsheet. It usually isn’t.

Why the math turns

1. The work that doesn’t get billed because it doesn’t fit

Block hours are billed in 15-minute or 30-minute increments. Real IT work is full of 3-minute interruptions: “is the WiFi down?” “did you get my email?” “I think my laptop is acting weird.” On a block, those calls either:

• Get billed at minimums and burn the block fast (10 small interruptions × 15min = 2.5 hours)
• Get ignored or deferred until the user gives up

Neither is good. On a Managed plan with unlimited remote support, the 3-minute interruptions are free. We answer them, fix them, move on. Your block stays for actual project work.

2. The “block customer” support tier

Most MSPs (us included, candidly) prioritize Managed plan customers in the queue. A block customer’s “urgent” sits behind the plan customers’ “urgent” because we have SLAs to honor for the latter.

This isn’t malicious — it’s how multi-tier support has always worked. But it means a block customer’s response time is structurally worse than a plan customer’s, even if the printed hourly rate is the same.

3. What the block doesn’t include

A typical block-hour engagement does NOT include:

• 24/7 monitoring. That’s a separate subscription on top.
• Endpoint protection licensing. Separate cost per seat.
• Patch management tooling. The labor to deploy patches uses the block; the tool is separate.
• Documentation maintenance. When you call about something, the engineer on the phone doesn’t have your environment in front of them; they’re rebuilding it from your description, which uses the block faster.
• Vendor management. Every minute on hold with AT&T burns the block.
• Reporting. No quarterly executive summary. No insight into where the hours actually went.

A Managed plan bundles all of these. The block customer pays for them à la carte and the total ends up higher than the plan would have been.

4. The end-of-year scramble

Block hours typically expire 12 months from purchase. If you bought 50 and used 38, you have either:

• 12 hours of “free” work in November-December that you scramble to find a use for (and rarely use well)
• A vendor pushing you to renew the block before it expires, which incentivizes them to find work to fill it

Either way, the actual value of the unused hours often goes to zero.

Real numbers for a 10-person office

Here’s the math we walk customers through. A 10-person office with one server, normal usage:

Block hour scenario (50 hrs/year at $150/hr block rate):

• Block of 50 hours: $7,500
• RMM monitoring (15 endpoints × $5): $900/year
• Endpoint protection (15 × $7): $1,260/year
• Backup (server + 10 endpoints): $1,800/year
• Email backup (10 users × $5/mo): $600/year
• Patch management tooling: $1,200/year
• Slow-fix labor for à la carte vendor calls: estimated 20 extra block hours = $3,000

Year-one block total: ~$16,260, plus the block runs out and you pay the next 20 hours at full rate.

Steel plan (10 users × $99 + 1 server × $125):

• $1,115/month × 12 = $13,380/year
• Includes: monitoring, endpoint protection, patching, backup, email backup, unlimited remote support, network management, training
• Project work bills at the plan rate of $150/hr for anything beyond the plan scope

Year-one Steel total: $13,380, with everything bundled, no surprise overruns, predictable cash flow.

The plan is cheaper, includes more, and produces faster response times. The block looks cheaper on the day you buy it because the bundled costs aren’t on the same line item.

When a block actually makes sense

There are scenarios where a block is the right answer:

• You have a defined project. Migrate from G Suite to M365. Build out a new office network. Deploy a custom application. Buy a block of engineering hours specifically for that scope, with clear deliverables.
• You have an internal IT person and just need overflow. Block hours from us are a sensible way to top up internal capacity without a full Managed relationship.
• You’re transitional. Block buys you 90 days to evaluate before moving to a plan.

For “general ongoing IT support for a business,” block hours rarely beat the plan math.

The simplest test

If you’ve spent more than $1,500 a month on hourly or block IT for a 10-person business in the past year, you’re paying more than a Steel plan would have cost — for less coverage and worse response times.

Free IT Blueprint Assessment is the easiest way to see your specific math. We walk your office, count what you actually have, and show you both paths over three years. You keep the numbers either way.