Just curious how much you would charge to setup a Domain & Office 365 tenant from scratch?

thecomputerguy

thecomputerguy

Well-Known Member
Reaction score
1,430
I'm talking from ground ZERO.

Register account with registrar
Locate a suitable domain
Purchase domain
Protect Domain with MFA/Privacy
Create O365 tenant
Purchase 1x Business Premium Licenses
Configure Threat Policies & Security Settings
Configure Conditional Access/Shatter Glass account
Configure new email on several devices for a user with ZERO computer skills

I quoted $1000 and the client was like o_O
 
For something like this, it's charged based upon time taken, and ALL time taken (unless I recognize a deficiency in my own knowledge that a client should not be responsible for rectifying).

It would shock me if this was less than a 10 hour job, at a minimum, and probably more. Depending on what your hourly rate is where you serve, $1K is on the low side.
 
britechguy said:
t's charged based upon time taken, and ALL time taken
Click to expand...

Exactly this. We quote migrations & setups like this, too. There are so many potential delays & unforeseeable problem, we just can't quote a flat fee. I keep precise track of keyboard time and don't bill for time when I can multitask while waiting, but even so it adds up fast. For migrations, we start the discussion with an estimate of 1 hour per mailbox (minimum 4 hours), but clearly state that the invoice will be based on actual time spent. I've had 6 mailbox migrations that took longer than 25 mailbox migrations just because of the unpredictable stuff that comes up during the process. A setup from scratch with no previous data or email should be more straightforward, but unless you've done a bunch recently, I'd still leave it open so you don't get hosed.
 
HCHTech said:
There are so many potential delays & unforeseeable problem(s), we just can't quote a flat fee.
Click to expand...

Exactly this. And I extend that to virtually everything, but I know many do not. But something like this is virtually guaranteed to have multiple things "go pear shaped" as part of the process, and not through any fault of the person performing it. Bill for time taken, and if that's unacceptable to the client, then they need to find another service provider (who's foolish enough to quote either a flat rate or grossly underestimate the likely time taken, then hit them with a huge bill and the acrimony that goes with doing just that).
 
You're not off with a 1K price to setup from scratch....domain registration, 365 tenant, DNS records, and then the bigger time consumption....tweaking the 365 tenant to your standards. I know many IT people just...setup the tenant...leave it default, or...do minimal configuration. But to be honest, to "wear an IT hat"...there's a lot...LOT...of settings to configure in there to do the client justice.

Tools like...365 tenant management tools...can save YOU lots of time for this. Create your templates/baselines in the tool...and apply to multiple tenants with a few clicks of the mouse. But even then, there's still some settings to do.

But that doesn't (shouldn't) lower what you charge...even if you spend less time thanks to a MSP tool. Because that's what helps pay for that tool!

You should charge based on "What you create...how well it's done". As you grow your skills...what you do...SHOULD cost more to the client. Because you're doing a better job than most others. Thus the finished product is WORTH MORE.

IMO...it's not billing "just time spent". Think about that for a minute. Seriously. What if you're a newbie...and it takes you a freaking week to...register a domain, figure out how to manage DNS records, stand up a 365 tenant...figure out how to fiddle with the settings to make it better...figure out how to configure client workstations, MFA, etc. If you charged for your time...the client may as well have bought a new car. How is the right?

Now...let's look at the flip side. I can register a domain, manage DNS records, stand up a virgin 365 tenant...configure settings waaaay above what 99% of other IT people can do...all in the blink of an eye, with 1x hand tied beyind my back, in record low time...probably 1/10th of what it would take an average IT person. For a tenant for 1x person...I could literally probably get that done in under 4 hours top to bottom. Why should I make LESS money...because I groomed my skills and pay for good tool sets?

You've heard of the story of the old marine engine mechanic that was called to fix a freighters engine? Many other mechanics had looked at the engine and could not fix it. They heard of this experienced old man mechanic..asked him to come. He quoted "OK, I can come...if you will pay mr $10,000.00". They agreed. He shows up the next day, walks up to the engine...looks at it, touches it, sniffs it, has them turn it over...he listens to the noise as it turns over but doesn't start. He says "OK, wait..hold on"...reaches into his tool bag, grabs a hammer, walks up to the engine and gives it a good whack with the hammer in a certain spot. He says "OK...try it now". They do and it starts right up and runs good. He puts his hammer back in the bag, reaches out his hand...for the $10,000.00. The ships captain says "What, $10K? But you were only here for 5 minutes...and you only hit it with a hammer!, You're going to charge me $10k to hit the engine once with a hammer?!" The old man says "Oh, no...hitting the engine with a hammer was just $10.00....but KNOWING WHERE to hit the engine with the hammer...$9,990.00!"

Learning to quote takes time too...and experience. You've got to know what pitfalls to expect, and how to get ahead of them. That's why, in some threads asking about "How much for a migration"...I can get into some pretty good details of...what's in front of you. There is a LOT of moving parts to think about and prepare yourself for.
 
Time based billing, means you aren't getting paid. Value based billing is where it's at.

If the customer wants cheap M365, they can go to Godaddy and suffer like all the rest of the poor decision makers of the world.

I've got a proposal on the table for a medical office, ~40 employees. This is a complete M365 implementation with compliance.

M365 Tenant
Defender for O365 configured / deployed
Intune / Autopilot configured / deployed
Defender for Endpoint configured / deployed
Conditional Access configured / deployed
Intune Compliance Reporting configure / deployed
Google Drive Migration
Google Mail Migration

A per device price quoted for a very hand holdy endpoint migration. (They're a Google shop right now, and learned the hard way things are NOT going to work out)

The project is ~$50,000 for all of this, and we haven't even gotten into the endpoint migrations, because those are ~$400 a pop.

You want just an M365 tenant from us? You're going to be out $5000 minimum. Because I'm going to spend a day on it, one of my engineers is going to spend a day on it. Project setup / tear down time, PM time? That's 20 hours to account for MINIMUM.

You tell me $1000, I return... How? I can't get compensated for the time consumed in the sales activity for this conversation alone at that amount.
 
YeOldeStonecat said:
What if you're a newbie...and it takes you a freaking week to...register a domain, figure out how to manage DNS records, stand up a 365 tenant...figure out how to fiddle with the settings to make it better...figure out how to configure client workstations, MFA, etc. If you charged for your time...the client may as well have bought a new car. How is the right?
Click to expand...

It's not right, and we should not be billing clients for self-education at that level. We'll all occasionally run into things that require "checking this or that," which is part and parcel of the service. But a client has every reason to expect that if they're hiring someone to provide a service, that they actually know how to provide that service, or do not bill when they realize that there's a lapse in their knowledge that they should have known going in.

And, yes, for those of us that bill hourly (like lawyers, plumbers, mechanics, and many others do) the more slickly skilled we get at something with time, the less a client pays. I don't know of any situation where hourly billing is involved where a skilled practitioner doesn't end up taking way less time than a complete newbie would.

You (generic you) should have some sense of whether an issue encountered should be billable versus should be on your own dime. It's going to happen again, and again, and again, and again as the years go by.

A perfect example of that discretion is the HP laptop about I've started the "booting from USB" topic. This situation is so bizarre that there is no way I could, would, or should bill the client for all the time I've spent, so I'm not. I simply want to improve my skill set so that were this to occur again, I will recognize exactly what's going on and how to fix it. He'd already be in "get a new computer" money had I billed for time. But within the first hour (which is what I've billed for, so far) I recognized that the basic diagnostic was done but the rest was a mystery that the client should not be paying for, if I chose to solve it for my own education. So I've eaten the cost beyond the hour to increase my knowledge of what's been the edgiest of edge cases I've encountered in years. That's ethical billing. It would have been equally ethical to wash my hands of it after 1 hour, too, but that just wasn't the direction I felt like going in this case.
 
britechguy said:
It's not right, and we should not be billing clients for self-education at that level.
Click to expand...

I knew that would be assumed in there...but...I let my exaggerated point still linger for the thought process.

I still firmly maintain...that a highly experienced tech...can "bang things out" a lot quicker than...oh, for the sake of this debate..let's pick a mid range tech. I'll even say...let's pick a fairly experienced tech.

In my earlier years in IT...I deeply studied Microsoft Small Business Server. Buying lots of books on it, utilizing my Action Pack subscription CDs to install it, fiddle with it, break it, reinstall it, fiddle with it, create a home network, play with settings, reinstall it...over and over..and over..and over.

I learned Small Business Server very well, wrote articles on it to help others, and helped other IT peeps learn it more...and more importantly....let their clients utilize it more (since many IT peeps didn't really know ALL the features SBS had). I could set it up SO dang quick. And configure my clients workstation SO dang quick on it...through sheer volume of projects. And..investing my time and education on the product.

I'll say I could "deploy one" on an average small biz network in...25 to 50% of the time it would take an average or even an above average fairly experienced computer guy/gal.

...so...why would I ....charge less?
No...I keep my fee the same, if not more! Because...I go above and beyond, I showed my clients how to really use all the features of SBS. Did I cost more? Yup. But did my clients get better ROI? Yup! Back then... (about 25 years ago)...I'd charge a base of $7,500.00 just to setup SBS on a clients network. And then there was more charges...depending on how many workstations, users, etc.

The old saying "Lawyers bill by the hour"...well, a lot of them do flat fees for project work. Ever have a will prepared? Most if not all law firms charge a flat fee for that. Ever buy a home? The lawyers fees for a real estate closing is just about always a flat fee too! Ever get divorced? Just about all divorce lawyers will require a very...very large "retainer" up front just to continue the conversation with you.
 
The very idea that the intrinsic value of any given action boils down to the time consumed in directly performing said action is fundamentally flawed.
 
The very idea that the intrinsic value of anything can be determined by anyone other than a given individual is without merit.

Services don't have an "intrinsic value" to begin with. They are a "what the market will bear" commodity, and what that is varies, widely, by market. The only thing I can, and will do, is set the value of my time. The value of my time has increased, and greatly, over the years, as I would suppose is the case for anyone as seasoning and wisdom increase.
 
@YeOldeStonecat

I'm not about to get into a game of "what about {exception X}." We can all play this, but we're talking about generalities here.

Even your examples of flat fee services by lawyers are for a very tightly constrained set of conditions. As soon as you move beyond that hourly billing kicks in.

I'd expect that anyone selling their time for whatever service will adjust that price based upon a number of factors, including what they think their skill set as a whole is worth in the marketplace in which they're doing the job. It's no different in concept than an employer making decisions about salary: new grads and seasoned pros make nowhere near to the same annual income, even if they're putting in roughly the same number of hours.
 
On this list, what I do all the time for my hourly clients wanting to setup a new domain and 365.

Register account with registrar *(GoDaddy is usually their choice and mine frankly with the fast verification)
Locate a suitable domain--Help them pick a vanity domain
Purchase domain --help with the buying
Protect Domain with MFA/Privacy --I don't do this
Create O365 tenant --I have them chose GoDaddy or direct MS. I explain how GS support is.
Purchase 1x Business Premium Licenses --Done with either pretty quickly.
Configure Threat Policies & Security Settings --I make sure security is on the account, I don't fiddle with many other policies
Configure Conditional Access/Shatter Glass account --I do that during setup with 365, secure both with MFA, leave notes for them
Configure new email on several devices for a user with ZERO computer skills --I do that after I'm done with with the backup of their Outlook and a 20 min propegation time for mbx to setup.

My record is 18 min, that was so fast that I couldn't believe it. Usually it's 30-45 min. Then I start the backup of their Outlook before I do this so I can get rolling with the migration. Migration is usually done next day. After care, day after.

In the end, these can be a quickie, or a full 2 hour job (what I start off with in my soft quote) and then some clients keep adding on more issues. Last year I had two clients with over 10 hours for each migration. '

My quote $598 for 2 hours with a typical normal migrations
 
All good information everyone... thank you!

I quoted $1000-$1500 all while knowing that I will spend probably about 2-3 hours total buying the domain, doing DNS, DKIM, DMARC, and setting up the tenant because I do have it down to a science at this point.

Then probably another hour getting the users Outlook configured on a few devices. So realistically probably 4 to 5 hours tops for what will probably end up being about $1200.
 
You must log in or register to reply here.
Back
Top