What is the Cost of Managed Cybersecurity Services?

Before we delve into the cost of cybersecurity, let’s briefly look at the cost of neglecting cybersecurity. Why are we doing this? Because this will help you understand why cybersecurity should be every enterprise’s number 1 priority. According to IBM, the average cost of a data breach in 2024 was $4.88 million. With cybercrime rising at unprecedented rates, businesses have to do all they can to optimize their defenses. 

When it comes to cybersecurity, businesses may worry about many things. For example, some businesses may feel like they aren’t proactively improving their security measures. Others may feel like their regulatory compliance posture isn’t as strong as it should be. Certain organizations may lack in-house cybersecurity professionals to deal with complex issues, and others may worry about reducing cyber insurance premiums. Over time, these worries and concerns can overwhelm organizations.

Businesses can’t solve these challenges with individual security tools. That’s why numerous organizations, from small businesses to multinational corporations, choose to commission cybersecurity solutions from third-party service providers, known as managed security service providers or MSSPs. The managed security market is currently worth $30.6 billion and will reach 52.9 billion by 2028 at a compound annual growth rate of 11.5%. 

By choosing third-party cybersecurity services, businesses can fortify their IT infrastructure, avoid security breaches, protect sensitive information, and design and implement a holistic cybersecurity strategy. This brings us to the next question, which is the main subject of this blog post: What is the cost of managed cybersecurity services?

The Cost of Managed Cybersecurity Services

Collectively, cybersecurity expenses are at an all-time high. According to Gartner, global expenses for cybersecurity and risk management will total $215 billion this year. But how much does a typical small or medium business have to pay for cybersecurity services? 

To answer that question, let’s briefly explore some variables that will influence the costs of managed cybersecurity services:

Company Size

Enterprises with thousands of users and endpoints will pay more for cybersecurity services than small and medium-sized businesses. 

IT Infrastructure Complexity

Businesses with large-scale IT ecosystems and a complex attack surface (the sum of potential entryways for hackers) may have to pay more to implement robust and widespread cybersecurity measures. 

In-House Talent

Due to a global talent shortage, especially in IT and cybersecurity, not all businesses have in-house cybersecurity experts to proactively reinforce their security posture and prevent cyberattacks. Therefore, companies with fewer in-house experts may have to choose more comprehensive third-party security services. 

Compliance Requirements

Some enterprises may have quite a few regulatory obligations, which can increase cybersecurity costs. For instance, a healthcare organization may have additional or different compliance obligations than a manufacturing company.  Some common examples of regulatory compliance requirements include General Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA), Health Insurance Portability and Accountability Act (HIPAA), Payment Card Industry Data Security Standard (PCI DSS), and the Sarbanes-Oxley Act (SOX).  

Business Objectives

Modern businesses tether themselves to advancing technologies like cloud computing, edge computing, internet-of-things (IoT), and 5G connectivity to meet business objectives, gain competitive advantage, and boost their products and services. When businesses adopt such complex technologies, they will face more cyber threats and, therefore, higher cybersecurity costs. Remember that the specific objectives of a business will always have an impact on how much their cybersecurity program might cost.  

How Much Should You Budget for Cybersecurity Services?

As you can see, the cost of managed cybersecurity services depends on numerous converging factors. Furthermore, organizations like Gartner, Forrester, BCG, the Ponemon Institute, and the SANS Institute all have different and unique research on how much companies spend or should spend on cybersecurity services.

However, this still doesn’t answer the most important question: Exactly how much should a business set aside as its cybersecurity budget? 

A general rule of thumb is that the security budget for a small or medium-sized enterprise should be around 5% to 20% of their overall IT expenses. However, as cyber threats mount, that number may increase. For businesses with strong in-house cybersecurity experts, that number may be a lot less. This percentage may vary based on the above-mentioned factors. 

An effective way for business leaders and critical IT and security stakeholders to calculate more specific cybersecurity costs is by breaking down the offerings of a managed cybersecurity service. 

What Do Managed Cybersecurity Services Comprise? 

Managed cybersecurity services include a diverse suite of basic and advanced security tools and capabilities. While it isn’t essential to know the details of your MSSP’s backend cybersecurity infrastructure or tech stack, it’s a good idea to know what cybersecurity tools and capabilities you’d be paying for.

Remember that some components of a cybersecurity service are absolutely essential, whereas others depend on the specific needs of a particular enterprise. In many cases, businesses can begin with a certain type of cybersecurity package and introduce other new tools or capabilities ad hoc.

Below are some components of a typical managed cybersecurity service that can help you understand potential security costs.

Security Consulting

Many MSSPs provide consulting services that can help businesses understand their cyber threats via an initial assessment, formulate a cybersecurity strategy, and implement various tools and measures to avoid malware attacks, ransomware attacks, and social engineering attacks like phishing, all of which can put sensitive data at risk.

Incident Response Plans

One of the best ways to increase cyber resilience involves implementing incident response plans and playbooks. MSSPs know that cyber incidents are inevitable and that it’s vital for a business to bounce back as quickly as possible, which is why incident response capabilities are a core managed cybersecurity offering.

Vulnerability Patching

Since threat actors will likely target your most vulnerable digital applications, MSSPs will proactively patch and harden your critical software. This typically involves performing regular updates and decommissioning apps at the end of their product lifecycle.

Misconfiguration Management

Oftentimes, a small misconfiguration in a file, application, or database can allow cybercriminals to breach your perimeters and access sensitive information. Therefore, MSSPs will focus on scanning, detecting, and addressing misconfigurations. Some managed cybersecurity services include automation capabilities to address vunerabilities and misconfigurations.

Identity and Access Management (IAM)

Enterprise IT environments are full of human and machine identities, and adversaries can use these identities as an entry point to your valuable digital assets. Typically, this happens when digital identities have too many unnecessary access privileges. MSSPs will provide IAM services to mitigate cyber risks associated with overprivileged identities.

Employee Training

It’s no longer realistic for businesses to leave cybersecurity to IT and security teams. Security must be a unified effort that involves every single employee. Understanding the importance of this, MSSPs offer training programs to engage your employees, teach them about dangerous cyber threats, and acquaint them with important security tools and mechanisms.    

Compliance Management

Managed cybersecurity providers will ensure that your business follows the rules and regulations enforced by various governing bodies. Some MSSPs may specialize in certain industry- or region-specific regulations. MSSPs may also implement cybersecurity frameworks (like CIS Controls, NIST, and ISO 27001 and ISO 27002) to improve your compliance posture.

Penetration Testing

To test your cybersecurity posture against real-world threats, MSSPs will conduct red-team exercises and penetration tests, which are essentially simulated cyberattacks to identify strengths and weaknesses and find areas that require optimization.  

Security Tools

Earlier, we mentioned that businesses shouldn’t look at individual security tools as an ultimate solution. The biggest advantage of managed cybersecurity services is that you can benefit from a plethora of diverse and interconnected tools and technologies. Here are a few tools that MSSPs may provide as part of their security solutions: 

• Firewalls
• Antivirus software
• Real-time threat detection
• Virtual private networks (VPNs)
• Cloud security tools 
• Malware scanners and removal tools 
• Email security tools 
• Password and credential managers
• Endpoint detection and response (EDR)
• 2-Factor and multi-factor authentication mechanisms 
• Backup software
• Encryption and decryption tools
• Security incident event management (SIEM) systems
• Security orchestration, automation, and response (SOAR) platforms 
• Microsoft 365 security tools

The Cost of Various MSSP Models

So now that we know what managed security services comprise and what your costs will typically include, let’s shift our focus to different kinds of managed cybersecurity service models that you can choose from. 

Managed Cybersecurity without Managed IT Services

Certain organizations may have robust IT infrastructure and skilled IT personnel but still lack cybersecurity expertise. This model, which only includes managed cybersecurity services, is ideal for such companies. 

If a business chooses this model, it’s essential to nurture a culture based on collaboration and communication. That’s because in-house IT personnel need to harmonize and collaborate with the third-party cybersecurity provider. 

As mentioned earlier in this blog post, the costs for such a model may vary depending on the company size, complexity of IT environments, compliance needs, and business goals. 

Managed Cybersecurity with Co-Managed IT Services

Even if businesses have strong IT teams and capabilities, there are many reasons why they might need some external support. For example, if a business decides to scale rapidly or kickstart complex new projects, a third-party IT expert can help tremendously. For such businesses, this model can be a realistic and affordable solution.

In some scenarios, businesses may choose this model as a way to avoid onboarding new IT and cybersecurity staff, which can be challenging and expensive. However, it’s important to remember that co-managed IT services don’t guarantee low costs. If IT and cybersecurity needs are complex, then that will still reflect in the overall cost of the service. 

Before we move on to the next model, remember that special IT or cybersecurity requirements such as round-the-clock scanning or exclusive threat intelligence and research will cost extra.

Managed Cybersecurity with Managed IT Services

In this model, businesses completely hand off IT and cybersecurity responsibilities to a third-party provider. In some ways, this is the most effective option because IT and cybersecurity work in cohesion, and having a single provider handle both of these critical pillars simplifies things for a business. 

If businesses choose a basic managed IT service plan, the included cybersecurity services won’t suffice anyway. For comprehensive cybersecurity, they need a dedicated solution, which is why opting for both managed IT and cybersecurity may be a wise choice. 

Once you decide on a pricing model, you may face other decisions. For instance, certain providers may have per-user deals whereas others may have per-device or tiered pricing models. This decision wholly depends on the intricacies of a particular organization and factors like goals, budgets, and security requirements. 

A final piece of advice: keep in mind that the costs of neglecting cybersecurity outweigh all these pricing models. If a business doesn’t take cybersecurity seriously, it can be the end for them. Conversely, by choosing a strong MSSP with a pricing model that’s right for your organization, you can secure yourself against myriad cyber threats. 

The Cost of Neglecting Cybersecurity 

We began this blog post by mentioning the cost of neglecting cybersecurity. Before we conclude, it's important to reiterate that statement. If you neglect cybersecurity measures and become a victim of a data breach, the best case scenario is that you will face downtime and service disruptions while you scramble to remediate the incident. However, the worst case scenario could result in irreparable financial losses, compliance and legal penalties, reputational damage, and an exodus of clients and collaborators. For some companies, this could easily be the end.   

With that in mind, protect your business from cyber threats by exploring managed cybersecurity services. Now that you’ve read this article, you will hopefully be able to navigate the cost and pricing models of managed cybersecurity a lot easier than in the past.

Conclusion 

For the modern enterprise, there’s nothing more important than cybersecurity. However, a lot of businesses aren’t quite sure about the cost of managed cybersecurity services. This is quite understandable because the cost of managed cybersecurity services depends on numerous factors, including the size of the organization, the complexity of its tech stack, long-term business objectives, compliance needs, and surrounding cyber threats. 

To choose the best pricing model, enterprises should first focus on understanding what managed cybersecurity services include - offerings like security tools, consulting, testing, and training. 

Next, businesses should choose an MSSP model that’s right for them. Choosing the wrong model can result in higher costs and other disadvantages. In some cases, businesses may opt for managed cybersecurity services without managed IT services. Some businesses may choose managed cybersecurity services with co-managed IT services. And some enterprises may opt for both managed cybersecurity and managed IT services. 

Whichever model businesses choose, it’s important to know what factors influence the overall cost. When businesses choose the right managed cybersecurity services with an optimal pricing model, they can rest easy because cyber threats will be kept at bay at affordable price points.