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December 13, 2023

Unlocking MSP Profitability: Navigating the Hidden Costs and Trends in Cybersecurity

By Frank Picarello, Go-to-Market Advisor for Judy Security

Let's talk about something crucial yet often overlooked in the IT world: Managed Service Providers, or MSPs. Managed Service Providers are the unsung heroes for small and medium businesses. As a result of their comprehensive IT service model, they provide SMBs viable outsourced IT that in most cases costs far less than doing it themselves. But it's not always smooth sailing. MSPs can sometimes have a tough time generating the profit required to fund and invest in their business. One significant part of this struggle is the hidden costs that come with juggling a bunch of different cybersecurity tools. These costs are tied to the inefficiency in operating a security platform across multiple vendors along with the engineering time required to assure the vendors’ products interoperate, remaining compatible and secure. It's a real headache, but there's a smart way to tackle it: all-in-one pre-engineered cybersecurity solutions that are complete, simplify management, protect your customer’s data all while reducing overhead cost. Additionally, a complete high-quality cybersecurity platform will help assure MSPs can price in-line with this value.

The MSP market continues to grow and mature. About 67% of companies are handing off some or all their IT management to MSPs. This percent continues to grow as the complexity and risk associated with balancing high availability, ease of access, and complete security is in many cases competing against flexibility for employees that work both at home and in the office and the ever- increasing access to applications and data from the cloud. This helps validate the reliance that SMBs have on MSPs. But here's the kicker: despite continued growth in revenue, many MSPs struggle with generating the income needed to sustain a healthy business and cash required to further invest in creating profitable growth.

Now, let's talk about cybersecurity. It's a fast-paced, ever-changing battlefield requiring MSPs to stay on their toes with an arsenal of security tools. Providing comprehensive enterprise-grade cybersecurity isn’t optional. Doing this right can not only increase costs but also make managing everything super complex. It's partly why there's a shortage of skilled people in this field. And guess what? Juggling all these tools and vendors not only creates an operational question mark, yet also eats into MSPs profits. While many security vendors offer security bundles, finding the ones that offer platforms that are engineered to work seamlessly, completely, and supported as a single solution while difficult, is the ideal.

Yes, there is a light at the end of the tunnel. MSPs benefit when partnering with security companies that have built their security platforms with the MSP in mind and from a point of integrated excellence. Why? Because this better assures MSPs provide security-led managed services that are foolproof. It's about putting all your eggs in one basket, but in a good way. The ideal platform is a one-stop-shop for cybersecurity, helping MSPs price higher, compete for new business, improve margins, and create market differentiation. Specifically, cost reductions come from security platforms that are easy to deploy, administer, manage, and support. When done right both the MSP and their customers win. MSPs have lower labor costs and customers experience a level of security-readiness that until now was unaffordable.

Take Judy Security, for instance. They offer comprehensive solutions that not only protect MSPs but also boost their operational efficiency by up to 60%! It's a win-win: MSPs can offer top-notch, scalable security to their clients without breaking the bank, assuring customers are confident that their employees and data are secure.

In a nutshell, having to manage a bunch of different cybersecurity products is a hidden drain on MSPs' wallets. Switching to integrated, all-in-one solutions? That's a smart move. It's cost-effective and efficient,allowing MSPs to focus on growing their business and taking care of customers. As our IT landscape continues to evolve, partnering with a forward-thinking cybersecurity expert that has a fully integrated platform built with the MSP in mind makes perfect sense.