Staying Competitive: How MSPs Are Leveraging vCISO Services to Meet Growing Client Demands

As cybersecurity threats escalate and regulatory requirements become more demanding, small and medium-sized businesses (SMBs) are facing unprecedented pressure to protect their data and systems. Many are turning to Managed Service Providers (MSPs) for help, not only with traditional IT management but also with strategic cybersecurity oversight. This shift has led to a surge in the adoption of virtual CISO (vCISO) services among MSPs—a trend that’s rapidly transforming the MSP landscape.

For MSPs, the rise of vCISO services presents both a challenge and an opportunity. Staying competitive now requires understanding what the vCISO market looks like, why it’s growing, and what’s involved in setting up a successful service. Here’s a closer look at what your competitors are doing with vCISO and why the demand is unlikely to slow down.

Why the vCISO Market is Growing Fast

Today’s SMBs know they can’t afford to ignore cybersecurity. The rise in ransomware, phishing attacks, and data breaches has left many businesses feeling vulnerable. For those without the budget to hire a full-time CISO, vCISO services offer a lifeline: access to cybersecurity expertise and strategic oversight without the need for a dedicated in-house executive.

According to recent industry research, 21% of MSPs and MSSPs (Managed Security Service Providers) already offer vCISO services, and another 98% of those without a current vCISO offering plan to launch one in the near future. Among these, 39% are in the final stages of preparing their vCISO services and expect to go live by the end of the year. This rapid adoption reflects the high demand for cybersecurity expertise among SMBs and the growing pressure on service providers to offer these capabilities.

Key Benefits Driving vCISO Adoption Among MSPs

The benefits of adding vCISO services align closely with the strategic goals of most MSPs. Competitors that have embraced vCISO services are seeing clear advantages, including:

1. Enhanced Customer Security For 43% of MSPs and MSSPs offering vCISO services, an improved security posture for their clients is the top benefit. With a vCISO, businesses gain not only expert oversight but also ongoing monitoring, risk assessment, and response planning. This improvement in client security is often a decisive factor for SMBs choosing a service provider, as it directly addresses their cybersecurity concerns.
2. Growth in Recurring Revenue Adding vCISO services can significantly impact MSPs’ financial models. The shift from project-based to recurring revenue is especially valuable for MSPs looking to stabilize cash flow. Among vCISO providers, 37% report an increase in recurring revenue, with clients often signing up for additional services once they see the value of strategic cybersecurity guidance.
3. Differentiation and Market Positioning In an increasingly competitive market, vCISO services offer MSPs a way to stand out. Competitors that have integrated vCISO into their offerings report that it helps them engage with clients on a strategic level, making them a preferred partner over MSPs who only provide reactive or operational security services. Differentiating through vCISO can position an MSP as a cybersecurity leader, particularly when clients need help navigating complex security challenges.
4. Facilitated Upsell Opportunities Once an MSP provides strategic security insight through a vCISO, it becomes easier to introduce additional products and services. In fact, 38% of MSPs report that vCISO services have increased their ability to upsell other cybersecurity offerings, from threat detection solutions to endpoint protection. This “foot in the door” approach allows MSPs to build trust and identify specific needs that can be addressed through expanded offerings.

Challenges MSPs Face in Offering vCISO Services

While the advantages are clear, many MSPs encounter hurdles when setting up a vCISO service. In recent surveys, MSPs highlighted some of the top challenges they face, including:

1. Complexity of Cybersecurity and Compliance Frameworks A striking 93% of MSPs and MSSPs report feeling overwhelmed by cybersecurity frameworks like NIST, ISO, and CIS. Navigating these frameworks requires specialized knowledge and experience, which can be daunting for MSPs accustomed to traditional IT services. Additionally, 74% struggle with data privacy and regulatory compliance mandates, including GDPR and HIPAA, which are essential for meeting client requirements.
2. Lack of Skilled Cybersecurity Personnel One of the biggest barriers to launching a vCISO service is finding qualified talent. Nearly a quarter of MSPs cite a shortage of skilled cybersecurity personnel as a top obstacle. Unlike other IT roles, vCISOs require a unique mix of technical expertise, strategic vision, and compliance knowledge—qualities that are difficult to find and retain in today’s tight labor market.
3. Concerns Over Initial Investment and Profitability Setting up a vCISO service involves a significant upfront investment, including training, technology, and possibly even third-party support. 26% of MSPs express concerns about the profitability of vCISO services, especially in the early stages. Many providers find that while vCISO services generate revenue, they also introduce additional operational and support costs that can impact margins if not managed carefully.
4. Difficulty in Marketing and Selling the Service Although the demand for cybersecurity services is high, some MSPs find it challenging to explain the value of vCISO to clients who are unfamiliar with strategic cybersecurity roles. 19% of MSPs report difficulty in selling vCISO services, which often require a different sales approach compared to traditional IT support or reactive security services. Success often hinges on educating clients about the long-term benefits of a proactive security strategy.

Where a vCISO Service Falls Short—and Why Fractional CISOs Fill the Gap

While vCISO services provide foundational cybersecurity support for small businesses, they are not always equipped to handle the comprehensive needs of larger clients or those in highly regulated industries. As companies grow or face more complex security challenges, they require a more in-depth approach—one that a virtual CISO may struggle to provide due to the volume of clients they oversee and the limited scope of their engagements.

For MSPs, this is both a challenge and a significant opportunity. While competitors are building out high-volume vCISO offerings, a Fractional CISO service can address the needs of clients looking for dedicated, hands-on support and strategic guidance. This “next-level” cybersecurity service isn’t about higher volume but about deeper engagement and more tailored security management.

Here’s how a Fractional CISO service differs from a vCISO and why it can be a powerful addition to an MSP’s portfolio:

The Key Differences Between vCISO and Fractional CISO

1. Client Focus and Time Commitment A vCISO often manages cybersecurity across 20 to 30 clients, providing essential services like risk assessments, compliance checks, and advisory on an as-needed basis. This high-volume model allows MSPs to offer strategic insights at scale but limits the level of engagement any single client can receive. In contrast, a Fractional CISO typically works with a much smaller client base, often two to four companies. This allows for a more substantial time commitment to each client, facilitating in-depth risk assessments, bespoke cybersecurity strategies, and continuous engagement with executive leadership. The Fractional CISO can spend more time on long-term planning, custom policy development, and hands-on support that goes beyond the more standardized service of a vCISO.
2. Depth of Engagement For larger clients, cybersecurity isn’t just about staying compliant or conducting occasional risk assessments—it’s a core part of their operational and risk management strategy. A Fractional CISO can work directly with a client’s leadership team to align cybersecurity initiatives with the company’s business objectives, often serving as a bridge between IT, compliance, and executive management. This depth of engagement ensures that the organization’s security posture grows in tandem with its business goals, a level of alignment that is challenging for a high-volume vCISO service to achieve.
3. Customizable and Scalable Security Frameworks A Fractional CISO can tailor cybersecurity frameworks, policies, and procedures to fit the unique needs of each client, often revisiting and adjusting strategies as the client’s risk landscape changes. They can manage or oversee implementation of specific solutions, design incident response plans tailored to the client’s environment, and ensure that security measures evolve alongside the organization. For larger clients in regulated industries, this flexibility and depth are critical, allowing them to meet complex compliance requirements and manage risks in a way that is sustainable over time.
4. Hands-On Management and Incident Response When a security incident occurs, the difference between a vCISO and a Fractional CISO service becomes especially apparent. While a vCISO provides guidance and advisory support, a Fractional CISO can manage incident response directly, coordinating with stakeholders, overseeing the investigation, and working closely with the client’s internal teams to contain and mitigate the threat. This hands-on management is particularly valuable for clients that lack in-house security expertise but need reliable support in high-stakes situations.

The Strategic Opportunity for MSPs: Leapfrogging the Competition

For MSPs aiming to differentiate themselves, launching a Fractional CISO service can be a game-changing strategy. While the vCISO market is becoming crowded, the demand for more comprehensive cybersecurity solutions is growing rapidly. By focusing on high-value clients—such as mid-sized companies, highly regulated industries, and those with sensitive data—MSPs can develop a Fractional CISO service that offers:

• Stronger Client Loyalty: Clients receiving dedicated, customized support are more likely to view the MSP as a long-term partner and stay loyal over time. As a trusted advisor embedded in the client’s security operations, a Fractional CISO builds a relationship based on consistency and personalized service, which is difficult for a vCISO to replicate.
• Higher-Value Contracts: Fractional CISO services, due to their tailored nature and the greater level of commitment involved, often command higher fees. This shift to higher-value engagements can strengthen an MSP’s revenue base, making it less reliant on the volume-driven, lower-margin models associated with vCISO services.
• Reputation as a Cybersecurity Leader: MSPs with a strong Fractional CISO offering are likely to be seen as leaders in cybersecurity, capable of handling more complex client needs and offering a level of strategic insight that goes beyond basic cybersecurity services. This reputation can help attract larger clients and differentiate the MSP in an increasingly competitive market.

For MSPs already offering vCISO services, adding a Fractional CISO service can also enable them to leverage existing client relationships for upselling. Clients that initially started with vCISO services may find their needs growing over time, creating a natural progression to Fractional CISO services that provide the deeper engagement they require.

The Challenge of Building a Fractional CISO Service

However, this opportunity doesn’t come without challenges. Developing a Fractional CISO service requires more than scaling up a vCISO model—it involves hiring or contracting experienced security executives, implementing custom tools and processes, and building a flexible, scalable service delivery model that can handle high-touch engagements. MSPs entering the Fractional CISO market must be prepared to invest in training, technology, and support infrastructure, ensuring they can deliver at the level clients expect.

To help MSPs overcome the challenges of launching a high-impact Fractional CISO service, Secutor offers the QuickStart Fractional CISO Program. QuickStart enables MSPs to deliver a branded Fractional CISO service right away, without the heavy lifting of recruiting, training, or developing complex processes. With access to Secutor’s extensive bench of seasoned CISOs and comprehensive support resources, MSPs can focus on delivering value to clients while we handle the technical and operational foundation.

QuickStart provides everything an MSP needs to go to market with confidence. From ready-made marketing materials and sales training to streamlined tools for client assessments, incident response, and regulatory compliance, this white-labeled solution ensures MSPs have the resources to meet high standards in cybersecurity strategy and risk management. By leveraging QuickStart, MSPs can quickly establish themselves as trusted security advisors for their clients, capturing the high-value benefits of a Fractional CISO service without the typical barriers to entry.