Fully Managed IT vs. Co-Managed IT Services – Which One Is Best for Your Business

Did you know that the IT outsourcing market is expected to grow at an annual CAGR of 6.51% from 2025 to 2030? Given the cost of in-house IT deployment, evolving threat landscape, and resource-intensive technologies, IT outsourcing has become a necessity to sustain. 

However, as organizations scale, they face a common dilemma of choosing between the two most prevalent IT outsourcing models – Fully managed IT and co-managed IT. This decision is crucial because the right IT strategy directly impacts productivity, cost control, and security posture.

Let’s discuss fully managed IT and co-managed IT in detail so you can choose the right one for your business.

Fully managed vs. Co-managed: Explained

To understand the core differences between fully managed and co-managed IT services, let us first understand each of them in detail.  

Fully Managed IT

Fully Managed IT is a service where a managed service provider (MSP) takes the complete responsibility of IT management, including deployment, setup, scalability, hardware replacement, and upgrade. 

Fully managed IT services minimize an organization’s in-house IT dependencies and the associated costs. Consequently, the managed IT services market is expected to grow from $365.33 billion in 2024 to $511.03 billion in 2029 at a CAGR of 6.9% 

Managed IT service providers offer a pay-as-you-go pricing plan, so you get charged for only the services you use. Moreover, some providers, such as Ace Cloud Hosting, offer industry-specific solutions tailored to meet an organization’s exact business requirements.

Managed IT services empower businesses to focus on their core operations rather than worrying about the underlying technologies and IT infrastructure. 

Co-Managed IT

Unlike fully managed IT services, co-managed IT is a service where the MSPs take responsibility for only specific IT tasks. The rest is handled by the in-house IT team. The services provided by co-managed services can include –

• Helpdesk Support
• Cybersecurity
• Network Monitoring
• Vendor Management
• IT Consulting
• Compliance Management
• Disaster Recovery

With co-managed services, you get the best of both worlds. Your IT team works closely with the IT professionals of a managed service provider.

It helps the IT team to take control of more critical operations while outsourcing the other part of their workload to a managed service provider. It not only increases operational efficiency but also the cost of deploying an extensive IT team. 

Fully Managed IT vs Co-managed IT: In-depth Comparison

Now that we have a fair idea about fully managed and co-managed IT, let’s compare them on some essential parameters. 

1. Control

In the case of fully managed IT services, companies have minimal to no control over IT management, infrastructure, and decision-making. The provider’s IT team designs the architecture to attain the best performance.  

However, in the case of co-managed services, an organization can control the overall IT functioning. The provider might help you with the services availed or assist in internal planning, but does not have any control. 

2. Infrastructure

In a fully managed IT service, the managed service provider owns the entire IT infrastructure. They generally create the IT setup in advanced data centers and give access to the IT resources over the internet. You can rent a part of their IT infrastructure to host business applications, data, and workloads. 

However, in co-managed services, you own the IT infrastructure. The service provider’s responsibility is to offer specific IT services, like IT monitoring, backup, or cloud migration.

3. Cost Considerations

Costs are often the defining factor of whether you can opt for a service or not. In terms of fully managed and co-managed IT services, we need to compare them with respect to operational and capital costs. 

The providers might charge you more for fully managed services because they offer a comprehensive IT solution. However, it also leads to minimal CAPEX as the provider owns the infrastructure.   

On the other hand, co-managed services might come with more budget-friendly plans. However, the business must invest in hardware procurement and setup.  

Therefore, you must prioritize ROI over costs before choosing the services. Evaluate the business impact they have on your service and the costs that go into IT running and recruitment.  

4. Data Security

Data security is a significant concern for all businesses, as the average cost of a data breach exceeds $4 million. In the case of fully managed IT, the provider has complete visibility over the IT setup as they own it.

Moreover, they ensure complete data protection with advanced features like threat hunting, vulnerability assessment, risk management, data encryption, Identity and Access Management, multi-factor authentication, gateway firewalls, IP filtering, and more.    

If you co-manage cybersecurity services with a managed security service provider (MSSP), you might get the same level of service as mentioned earlier. Otherwise, it is the business’s responsibility to deploy advanced security protocols in-house.   

5. Compliance 

The fully managed IT service providers ensure compliance with all major industry-specific and location-specific regulations, including HIPAA, GDPR, and GLBA. They have a dedicated compliance management team that tracks the latest developments in guidelines and procedures. These providers also offer accurate reports for audit and compliance.

With co-managed services, compliance is a shared responsibility. The provider can offer compliance assistance, but it is the internal team’s responsibility to deploy internal controls.   

6. Knowledge Retention

When you outsource the entire IT management to the managed service provider, the in-house IT expertise regarding troubleshooting and planning is reduced.     

However, a co-managed service only provides additional assistance to the internal team, preserving the organization’s internal IT knowledge. 

7. Customization

With fully managed services, organizations get fewer customization options as the service provider owns the infrastructure. 

With co-managed services, you are free to upgrade and modify the IT infrastructure as you own it. You can adopt the desired technologies as per the business requirements. 

8. Integration

Fully-managed IT services integrate seamlessly with existing tools and technologies, as it is a one-stop solution. 

However, in the case of co-managed IT, both the service provider and the internal team must collaborate effectively to ensure integration between on-premise and external tools.  

Which Model is Best For Your Business 

The service that will work best for you will depend on your business model. You can choose – 

Fully Managed IT 

Let’s say you are a small or medium-sized business with a limited IT team and do not intend to spend a significant budget on the same. Moreover, if you don’t want any unpredictable expenses and IT hassles, you can choose fully managed IT. 

For instance, for a healthcare institution with 100 employees that wants to concentrate its revenue on healthcare rather than expensive hardware and IT management, fully managed IT is the best option.

Co-managed IT 

Let’s say you are a medium or large enterprise with an already established IT infrastructure and team, but want expertise in a niche domain, such as cybersecurity, customer support, or disaster recovery. Moreover, if you want full control of your data, co-managed IT is well-suited.    

For instance, you are a large financial institution that works with critical client data and does not want to give control to a managed service provider. 

How To Select The Right IT Service Model 

Let’s check out some factors you must consider before selecting the right IT service model.

1. Analyze the Current IT Setup

Verify whether your IT team and infrastructure are capable of meeting both current and future IT needs. If the answer is yes, and you want only a specialized service in a specific domain, you can opt for co-managed IT services. Otherwise, fully managed IT is best for you. 

2. Consider Cost Restrictions

Do you intend to invest in hardware procurement, advanced tools, server upgrades, IT hiring, and training? If the answer is yes, you can choose co-managed IT. If not, go for fully managed IT.  

3. Review Compliance Requirements  

Can you handle compliance requirements in-house? Do you handle critical data that you want to have full control over? If the answer is yes, you can opt for a co-managed IT solution. Otherwise, fully managed IT is the way to go.

4. Plan for the Future

Do you plan to scale the business process in the near future? Are you willing to adopt advanced technologies that demand a high-performance environment? Then, fully managed IT is the solution for you. 

Unsure Which IT Model to Choose? 

Whether you choose a fully managed or co-managed IT setup depends on your business goals. What truly matters is selecting the right service provider who ensures reliability, security, and long-term cost efficiency. If you’re still evaluating your options, connect with our Solutions Expert today for a free consultation and personalized guidance.