Cybersecurity outsourcing: Strategies, benefits and risks

What should you outsource, and what should you keep in-house?

Deciding whether to outsource some, most or all enterprise security tasks requires a high-level examination of an organization's security risk profile and an understanding of its tolerance for the identified risks, as well as its current and future capacity to fulfill cybersecurity requirements. Based on those risk assessments, each organization must reach its own conclusions about what it should outsource and keep in-house.

A company that determines its cybersecurity team doesn't have the time, talent, ability or bandwidth to properly execute key tasks should opt for outsourcing, said Jeff Pollard, a vice president and principal analyst at Forrester Research. Similarly, an organization whose internal security professionals don't want to handle certain tasks because they're focused on more critical, high-priority functions should outsource the lower-priority work. And an organization that decides its in-house team shouldn't handle some security activities, such as evaluating insider threats, should likewise hire an MSSP for those responsibilities.

Few organizations outsource their entire cybersecurity operations, according to experts. "Most organizations are looking to create a hybrid: some outsourcing with some internal expertise in specific areas," Pollard said. Hybrid models typically have in-house security executives, managers and senior experts handling strategic tasks, while MSSPs perform lower-level tasks, like monitoring of networks to detect attempted attacks.

What are the benefits of outsourcing cybersecurity?

The benefits that MSSPs can deliver vary based on each individual engagement and how a company crafts the contract and service-level agreements (SLAs) it has with the provider. However, organizations typically see benefits in the following five areas when using an MSSP:

1. Better access to the latest security innovations and tech

Outsourced providers are more incentivized to pilot -- and can more readily afford -- new technologies, including AI tools for cybersecurity, that have the potential to deliver better results, said Rahul Mahna, a partner and head of the outsourced IT services team at consulting and auditing firm EisnerAmper.

On a related note, MSSPs can provide better insights into existing and emerging threats, along with how to detect and defend against them. "Many outsourcing companies have arrangements with major software vendors, so as zero days and other threats emerge, they're usually the ones who receive that information right upfront," said Alan Brill, a senior managing director at Kroll, a risk and advisory firm.

2. Broader expertise and access to top talent

MSSPs also tend to have more experienced teams than most organizations can create in-house. "An external organization handles far more alerts and breaches than a typical in-house organization will, so their level of experience tends to be better," Brill said. "Because of that experience, an external organization, in many cases, can do a more nuanced job of turning an alert into an actionable recommendation."

Similarly, MSSPs often have teams with broader perspectives and insights than an organization's team typically possesses. That's because providers commonly work with clients in different industries and with companies of different sizes. That gives them a wide breadth of experience that they then use to advise clients and inform clients' security strategies.

MSSPs have better access to talent than a typical organization, too. "Oftentimes, enterprise service providers are more capable in being able to hire cybersecurity talent, and they have partnerships and can reach into colleges and universities," said Tony Coulson, executive director of the Center for Cyber and AI as well as professor at California State University, San Bernardino.

And service providers, due to their size, can hire more specialists than a typical CISO, who might not have enough work to justify the cost of specialists on staff.

3. In-depth knowledge of regulatory requirements and compliance documentation

MSSPs also come with in-depth knowledge of regulatory requirements, honed by that broader experience. As a result, many MSSPs provide a thorough knowledge of varying state, national and international regulations, including GDPR, HIPAA and Systems and Organization Controls (SOC) 2. "That's the business of the right provider," Coulson said.

And MSSPs can document compliance with security standards for their clients. That's a bonus at a time when an increasing number of cyber insurance providers, business partners and even customers are looking for proof that an organization has satisfied certain compliance requirements and implemented cybersecurity standards. An MSSP "represents more of a known," Brill said, and can often confirm to those third parties that security best practices are in place and being followed.

4. Cost efficiency and predictable budgeting

Like most managed service providers, MSSPs bring economies of scale and, thus, can often provide cybersecurity capabilities at a price that's lower than what an in-house security team would cost.

Moreover, organizations that use an MSSP for some or all of their security functions can switch big chunks of the security budget from Capex to Opex, which can create certain accounting advantages for the organization and predictability in the budgeting process.

5. Scale and stability

Most organizations -- particularly those in the small to midsize category -- can't afford to build a round-the-clock security operations center. However, because of their larger size, MSSPs can attract and afford the talent needed for nonstop operations.

Furthermore, due to their larger size, MSSPs can typically handle turnover more easily, whereas an organization with only an in-house security team "can get blindsided when one or two of their key people leave," Brill said.

In-house vs outsourced: A comparative cost analysis

Potential drawbacks of outsourcing cybersecurity

Although hiring an MSSP can bring many benefits, outsourcing cybersecurity services can have drawbacks, especially if company executives don't carefully consider what they're outsourcing and how they structure the MSSP contracts.

Here are some of the potential drawbacks:

• Organization-MSSP misalignment. Insufficient understanding of the organization's unique needs and internal culture could create gaps between the organization's risk tolerance, security requirements as well as user security needs and the security layer delivered by the MSSP.
• Lack of customization. An MSSP might provide an overly generic approach to cybersecurity that doesn't include enough customization to fit all the organization's needs.
• Biased decision-making by the MSSP's AI tools. Artificial intelligence -- whether used for cybersecurity operations or another task -- requires sufficient quality data to work well. If the MSSP does not understand the organization's unique risk position and its needs or does not have enough quality data to reflect the organization's unique network traffic, those AI tools could either be too permissive or too restrictive to deliver value.
• Hidden and unexpected costs. Limited or no cost savings might also result if the relationship isn't well managed, thereby negating a key benefit expected with outsourcing.
• Lack of coordination and consistency. A high rotation of external workers could disrupt operations if the outsourcing provider makes frequent changes to contractor assignments.
• Underperforming service levels. As is the case with any third-party arrangement, a company must invest in managing the relationship and measuring performance to ensure that the MSSP delivers the agreed-upon services. But even if that's the case, an organization might find a service provider is more responsive to larger, more lucrative clients -- particularly in a widespread security event that leaves the MSSP stretched thin.
• More third-party risk. All vendors introduce additional risk into an organization, and security service providers are no exception. In fact, MSSPs often handle sensitive information about their clients and have access to their clients' systems. Consequently, organizations should not exempt their MSSPs from third-party risk management best practices and policies.

4 best practices for outsourcing cybersecurity

To maximize the benefits and minimize the drawbacks of hiring an MSSP, experts advise companies to do the following:

1. Take a targeted approach to outsourcing cybersecurity by thoroughly evaluating security requirements and outsourcing only what the organization can't, doesn't want to and shouldn't perform in-house.
2. Vet potential providers and select an MSSP with the experience and expertise that match the company's specific needs.
3. Craft SLAs tailored to the organization's security requirements.
4. Build in flexibility, so the MSSP can scale services up and down to accommodate changing organizational needs.

Editor's note: This article was updated in June 2025 to incorporate new survey data and the latest advice on outsourcing cybersecurity operations.

Mary K. Pratt is an award-winning freelance journalist with a focus on covering enterprise IT and cybersecurity management.