The Rise of Managed Security: How to Boost Revenue Despite Economic Uncertainty

 Increasingly complex threats. First, the threat landscape is getting more difficult for enterprises to manage on their own. Phishing and ransomware remain as leading threats that grow more sophisticated and costly. In 2023, the average global cost of a data breach set a new record: $4.45 million. But the cost to organizations in the aftermath of an attack goes beyond restoration and remediation, as the reputational damage they suffer can negatively impact sales.

 A cybersecurity skills shortage. In addition, it's become more difficult for organizations of all sizes to find talent to fill in-house cybersecurity roles. While the number of people working in cybersecurity is steadily increasing, it's not keeping pace with demand. Cybersecurity certifications provider ISC2 estimates there are approximately 1.5 million cybersecurity workers in North America, yet North American organizations are only meeting 74% of workforce demand, with a shortfall of more than half a million workers. This shortfall is especially problematic for small to midsize enterprises (SMEs), which often have difficulty competing with larger organizations for talent, leading them to outsource their cybersecurity needs.

 A cybersecurity solutions sprawl. To deal with an evolving cybersecurity threat landscape, many organizations find themselves struggling to manage a sprawl of cybersecurity tools and services. A Ponemon Institute study found that the typical organization uses an average of 47 different security solutions from up to 10 different vendors. Managing so many solutions is not only costly and complex, but it can also lead to security gaps and blind spots.

 An increase in compliance regulations. Many businesses find it hard to cope with an increasing number of government data privacy and protection mandates. The stakes are high, as organizations found to be in noncompliance with regulations such as the General Data Protection Regulation (GDPR), the Health Insurance Portability and Accountability Act (HIPAA), the National Institute of Standards and Technology (NIST) Cybersecurity Framework 2.0 and the California Consumer Privacy Act (CCPA) can face stiff penalties. For instance, regulators fined Meta a record $1.3 billion in May 2023 for violating GDPR rules.

 Rising cyber insurance premiums and stringent policies. Hoping to mitigate the potential cost of a breach, many enterprises are purchasing cyber insurance. As a result, the cyber insurance market is expected to grow from $7.8 billion in 2020 to $20 billion by 2025. But carriers continue to increase the cost of premiums and are becoming far stricter about underwriting policies (especially for SMEs and high-risk verticals like health care). For example, carriers are requiring many organizations to adopt technologies like multifactor authentication (MFA) to obtain coverage.

 Offer innovative solutions to combat emerging threats. While the threat landscape continues to evolve, MSPs can provide organizations with the rapid response services they need to minimize damage and maintain business continuity when an attacker strikes. Innovative service offerings like extended detection and response (XDR) and managed detection and response (MDR) can help combat complex threats. They can be delivered by MSPs at scale and profitably across a client base.

 Fill the cybersecurity skills gap. Without in-house expertise, organizations need a trusted partner who can provide specialized cybersecurity knowledge. MSPs can offer tailored services and flexible packages to provide organizations with the right solutions and expertise to protect them against cyber risks. Often, MSPs can do this for less than it would require an organization to build and manage a security infrastructure on their own.

 Minimize security tool sprawl. MSPs that standardize on a vendor partner with a comprehensive security platform can provide better visibility, more efficient provisioning, and streamlined management and reporting. Standardizing on a single vendor can also reduce the number of tools upon which an organization relies. In addition to stronger security, a unified platform improves margins by reducing service delivery costs and total cost of ownership.

 Simplify how an organization meets compliance. In an increasingly stringent regulatory environment, MSPs can ensure that their clients have the solutions to meet compliance and the reporting to validate it, helping clients avoid costly penalties.

 Satisfy insurance requirements. MSPs can leverage their expertise in risk assessments to provide consulting on an organization's insurance "readiness," offer add-on services (such as MFA) to meet insurance requirements, assist with compliance reporting and provide claims process support.