Managed Security Services Provider (MSSP) vs. In-House Security

Experienced corporate leaders learn there isn’t always a right or wrong answer when it comes to major business decisions. Usually, taking the organization in one direction or another is a matter of conducting thorough due diligence and weighing the pros and cons. Implementing a cybersecurity strategy ranks among the fundamental choices CEOs, CFOs, CISOs and others are tasked with making. Industry leaders could fund, build and staff an in-house team or partner with a managed security services provider (MSSP).

At Red River, we work closely with business professionals to provide customized and scalable cybersecurity support. If you have come to a crossroads regarding whether to create an in-house team or outsource to an MSSP, the following information can help you make an informed decision.

How Much Cybersecurity Does Your Organization Require?

In a perfect world, every organization would have the bandwidth to afford the most innovative cybersecurity defenses available today. Clearly, we don’t live in an ideal world, and companies typically spend a percentage of their revenue on managed IT and data security. Based on general industry guidelines, a reasonable investment runs between 3 and 10 percent of an operation’s total annual budget, according to recent studies. Which end of the cybersecurity spend spectrum a business falls largely depends on the following factors.

• Sector: Industries such as finance, healthcare and retail are among the most targeted. Hackers prioritize these businesses because they store a wealth of valuable data such as bank accounts, credit card information and items that can be quickly monetized on the dark web. By that same token, organizations in the military industrial base are the focus of advanced persistent threats. If your business entity experiences numerous attacks or highly sophisticated ones, it may be prudent to invest more heavily in cybersecurity.
• Business Size: Small and mid-sized organizations generally experience a higher number of cyberattacks. Most are attempts by garden variety hackers to trick someone with a phishing scheme. Foundational security measures, coupled with education and training, may suffice. Large corporations can anticipate skilled and determined hackers, as well as online gangs, to run elaborate schemes at them. Sophisticated hackers invest time, energy and money because their return can run into millions of dollars in cryptocurrency.
• Regulatory Compliance: In many ways, industry-specific cybersecurity regulations dictate how much data security an organization requires. For example, hospitals, outpatient care facilities and others must comply with the Health Insurance Portability and Accountability Act (HIPAA). Military contractors and supply chain businesses are required to demonstrate Cybersecurity Maturity Model Certification (CMMC) compliance or lose federal contract revenue. How much cybersecurity these organizations need is driven by regulatory compliance, balanced against the revenue they generate.

It’s important to invest enough in cybersecurity to onboard the infrastructure, expertise and technology to deter, detect, contain and expel threat actors. The cost differences between a managed security service provider MSSP and an in-house security department are fundamental considerations.

Cost: MSSP vs. In-House Security

Assigning a revenue percentage or annual dollar amount to the cybersecurity line item in a budget cannot be rendered in a vacuum. Just as different sectors experience varying frequencies of attack and threat sophistication, the potential losses are also a salient factor.

The average cost of a data breach rose to $4.88 million in 2024, up from $4.45 million in 2023, with the healthcare and financial sectors suffering the largest monetary losses. Those averages do not necessarily paint an accurate picture of what’s at stake.

For instance, MGM Resorts International suffered losses upwards of $100 million when a hacking gang breached its systems and seized operational control in 2023. The casino chain’s direct financial losses may not account for civil lawsuits brought by customers whose personal identity information was compromised, regulatory fines or reputational damage. The point is that decision-makers may want to hedge their bets by weighing the cost of in-house staff or outsourcing to an MSSP against the vulnerabilities subpar security produces and the potential for crushing losses.

MSSP Cost Considerations

The cost of working with a third-party cybersecurity firm varies based on wide-reaching factors. A good jumping-off point involves understanding what a firm offers in terms of expertise, monitoring consistency, threat detection capabilities, tech stack and staffing. An MSSP does not necessarily need a platoon of certified cybersecurity professionals to oversee the data security of multiple organizations. That is, if its technology includes AI, machine learning and cutting-edge innovations. Top-tier cybersecurity firms offer scalable solutions based on the following criteria.

• Company Size: The number of employees, in-house computers, endpoint devices and the nature of the digital assets play a role in determining monthly rates.
• Services: The breadth and sophistication of the security measures an organization requires also drive costs. Companies that want enterprise-grade antivirus software and firewalls updated and maintained normally find outsourcing relatively inexpensive. Developing determined cybersecurity measures such as zero trust architecture or adopting Security Operations Center as a service (SOCaaS) amps up the protections and cost. SOCaaS has been trending high because the strategy excels at identifying threats and expelling them quickly and efficiently.
• Pricing Models: An MSSP typically offers scalable rates based on the solutions company leaders select. In terms of investing a percentage of an overall budget, CEOs and CISOs have a variety of options and the ability to garner the best bang for their buck. Pricing models usually allow customers to increase or decrease services on a need basis.

Working with an MSSP remains a popular option because organizations can treat cybersecurity as a pass-through business expense. Although the service is vital to the safety and security of the business entity’s network, the third-party firm acts as a vendor.

In-House Security Cost Considerations

The costs incurred by a company that chooses to fund an in-house security department can prove significant. In many cases, infrastructure, software applications and licensing, as well as staffing, run the total cost upwards of $1 million annually or more. Larger corporations may be able to absorb the expense, but the headwinds they face may make the endeavor unsustainable. These are line items that accompany an in-house security department.

• Salaries and Benefits: Managed IT and certified cybersecurity professionals generally earn salaries north of $80,000. Add employee benefits and the total cost per staff member can easily rise to more than $125,000 each. It’s important to keep in mind that an in-house team will likely be responsible for putting out tech fires and other IT issues. The department will also need enough members to handle 24-hour monitoring. That means an in-house security team calls for multiple staff members to work all three shifts.
• Infrastructure Costs: An independent cybersecurity team requires viable hardware and the latest software applications. Licensing fees will need to be paid, and software packages require updates and replacements over time. As hackers devise new schemes to overcome current defenses, software developers are tasked with putting new products on the market. Companies shoulder the cost of software substitutes.
• Education and Training: Data security employees will require ongoing education and training to keep pace with the changing threat landscape. While the cost of sending staff members to seminars or paying for online courses won’t break the bank, time presents a problem. Employers must account for lost work hours during training and fill the void with part-time or additional full-time employees.

Although the direct expenditures of an in-house security team are generally higher than an MSSP, cost is not the only consideration. Business leaders need to have an MSSP partner with the capability and credentials to handle industry-specific data. It’s also important to note that budgetary concerns are just one of the moving parts.

Cybersecurity Expertise: The Skills Gap

Recruiting experienced and accredited cybersecurity experts has become something of a Herculean task. American companies struggle mightily to onboard qualified data security professionals, with nearly a half-million positions going unfilled at any given time. At the global level, the skills gap results in nearly 3.5 vacancies.

The pervasive skills gap, and subsequent staffing shortages, have a direct and discerning impact on corporate entities. Those with the resources to build an in-house security operations center and staff it often discover the personnel are not available. Even if an organization overpays for staff members, it’s only a matter of time before competitors up the ante or experts retire. Attrition continues to pose a significant obstacle to creating and maintaining an in-house security department.

By contrast, cybersecurity firms have little problem onboarding the best and the brightest. They defray much of the salary and ongoing training costs by including the expenses in scalable rates they charge businesses. An MSSP also has the advantage of supporting career-minded individuals to hone their skills, acquire accreditations and earn promotions and raises. Attrition and time away for educational purposes don’t pose a substantial problem for third-party cybersecurity providers because they maintain a full complement of experts committed to protecting the digital assets of clients.

Regulatory Compliance Solutions

The ability of an MSSP to seamlessly maintain regulatory compliance comes as something of a surprise to business leaders. Members of an in-house IT department usually struggle to adhere to stringent data privacy and security mandates. It’s not uncommon for staff members to be studying for the test, so to speak, meeting regulatory compliance criteria when audits approach. The remainder of the time, digital security staffers split their efforts between dealing with issues that affect productivity and responding to threat alerts. Too often, otherwise experienced professionals find themselves running from one fire to the next. Meanwhile, cybersecurity defenses suffer at least short-term gaps and vulnerabilities.

By contrast, an MSSP provides 24/7 monitoring, threat detection and response designed to exceed pertinent regulatory requirements. If you work in the healthcare sector, a SOCaaS solution can be customized to follow HIPAA guidelines. The same holds true of an organization that works in the military supply chain. An MSSP can tailor the digital security measures to meet the applicable CMMC cyber hygiene level. While regulatory compliance is usually handled as an additional chore by in-house security teams, it’s built right into the scalable services offered by third-party firms.

Does Hybrid Cybersecurity Make Sense for Your Organization?

One of the impediments to working with an MSSP revolves around relinquishing control over data security. The idea that a third party, i.e., a stranger, has the authority to make real-time decisions doesn’t sit well with business owners and operators. That’s not an unreasonable position, given the fact they have invested their time, skills, financial resources and sweat equity into building a successful organization. The fruits of their labor are also the basis of their livelihood.

Those are all good reasons for decision-makers to consider a middle road. It’s completely pragmatic to maintain an in-house IT department that handles day-to-day operations and reports directly to the leadership team. An MSSP can be brought into the mix to provide monitoring and threat detection during off-hours. It’s also practical to task third-party cybersecurity experts with developing forward-facing data security strategies, maintaining regulatory compliance and making network adjustments that improve efficiency. A hybrid solution offers business professionals the operational control they prefer, 24-hour cybersecurity and other benefits at a scalable rate.

The decision to invest in an in-house security department, fully outsource to an MSSP, or work with a firm to create a hybrid solution requires thoughtful consideration. We recommend gathering input from department heads, tallying direct and indirect costs, weighing your ability to shoulder risk and bringing in an MSSP to lay out a suite of cybersecurity solutions.

Red River Offers Scalable MSSP Solutions

At Red River, we provide determined managed security services at a scalable rate. We have the expertise, SOC infrastructure, expertise and next-gen tools to meet your digital security and regulatory compliance needs. If you’d like to learn more about our slate of managed security service solutions, contact us today. Let’s get the process started.