Managed service providers (MSPs) are discovering the huge potential for profit from offering security-as-a-service to their clients. Managed security services are now the biggest growth area for the majority of leading MSPs, with security-as-a-service well ahead of cloud migration, cloud management, and managed Office 365 services according to a recent survey conducted by Channel Futures.
Channel Futures conducted the survey as part of its annual MSP 501 ranking initiative, which ranks MSPs based on their ability to act on current trends and ensure they remain competitive in the fast-evolving IT channel market. The survey evaluated MSP revenue growth, hiring trends, workforce dynamics, service deliverables, business models, and business strategies.
The survey revealed that by far the biggest growth area is managed security services. Security-as-a-service was rated the biggest growth area by 73% of MSPs. 55% of MSPs said professional services were a major growth area, 52% said Office 365, and 51% said consulting services.
It is no surprise that security-as-a-service is proving so popular as the volume of attacks on enterprises and SMBs has soared. Cybercriminals are attacking enterprises and SMBs trying to gain access to sensitive data to sell on the black market. Attacks are conducted to sabotage competitors, nation-state-sponsored hackers are attempting to disrupt critical infrastructure, and data is being encrypted to extort money. There is also a thriving market for proprietary data and corporate secrets.
The cost of mitigating attacks when they succeed is considerable. For enterprises, the attacks can make a significant dent in profits, but cyberattacks on SMBs can be catastrophic. A study conducted by the National Cyber Security Alliance suggests as many as 60% of SMBs go out of business in the 6 months following a hacking incident.
Enterprises and SMBs alike have had to respond to the increased threat by investing heavily in security, but simply throwing money at security will not necessarily mean all security breaches are prevented. Companies need to employee skilled IT security professionals to implement, monitor and maintain those cybersecurity solutions, conduct vulnerability scans, and identify and address security gaps. Unfortunately, there is a major shortage of skilled staff and attracting the right talent can be next to impossible. Faced with major challenges, many firms have turned to MSPs to and have signed up for security-as-service offerings.
Forward-thinking MSPs have seized the opportunity and are now providing a comprehensive range of managed security services to meet the needs of their clients. They are offering a wide range of tools and services from phishing protection to breach mitigation services; however, for many MSPs, developing such a package is not straightforward.
Security-as-a-service is in high demand, but MSPs must be able to package the right services to meet customers’ needs and have a platform that can handle the business end. They too must attract the staff who can implement, monitor, and manage those services for their clients.
When devising a security-as-a-service offering, one option is to use a common security architecture for all clients and provide them with a range of solutions from the same provider. Many companies have implemented a slew of different security tools from multiple providers, only to discover they are still experiencing breaches. It is a relatively easy sell to get them to move over to a system where all the component parts are seamlessly integrated and to benefit from an MSP’s expertise in managing those solutions. There is a risk of course that clients will just choose to go direct rather than obtain those services from an MSP. This single platform strategy has been adopted by Liberty Technology – ranked 242 in the MSP 501 list – and is working well, especially for clients that have fewer than 1,000 employees.
At the other end of the spectrum is Valiant Technologies, ranked 206 in the MSP 501 list. Valiant has chosen a wide range of products from multiple cybersecurity solution providers and has built a unique package of products for its security service.
The products were chosen for the level of protection they offered and how well they work together. This approach has been a success for the firm. “Providing a bundle of offerings from different vendors that work well together is the most effective way for an MSP to retain its role as a trusted adviser,” said the firm’s CEO Tom Clancy. The security service has been added to other business services provided by the MSP and has proved to be an easy sell to clients.
ComTec Solutions, which ranked in position 248 in the MSP 501 list, is still deciding on the best way forward. The provision of security-as-a-service is a no brainer, but the company is currently assessing whether it is worthwhile building a security operations center (SOC) and becoming a managed security service provider (MSSP) or outsourcing the SOC service.
There are several different approaches to take when developing a managed security service offering. What is vital is that such a service is provided. The MSP 501 survey has shown that the most successful MSPs have responded to demand and are now helping their clients secure their networks through their security-as-a-service offerings. Those MSPs are clearly reaping the rewards.
If you are an MSP that is considering developing a security-as-a-service offering, be sure to speak to TitanHQ about its world-class cloud-based security solutions for MSPs – WebTitan and SpamTitan – and find out how they can be integrated into your security stack.