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For Managed Security Services Providers (MSSPs), pricing can be a tough balancing act. It needs to be simple enough for buyers to understand, flexible enough to match client risk and disciplined enough to protect margins.
Successful MSSPs do not build simple packages by stacking tools into “good, better, best” tiers. They build offers around client outcomes, delivery capabilities and the risk profile of the market they serve.
Use this practical guide and the corresponding checklist below to create security offerings that are easier to sell, deliver and defend.
1. Use benchmarking to sharpen positioning
Third-party recognition can help MSSPs stand out in a crowded market. When buyers are comparing providers that offer similar services, independent validation gives prospects, partners, and insurers another reason to trust the provider’s maturity and market relevance.
Benchmarking against the Top 250 is important because it helps MSSPs understand the actual state of the market, not just theoretical analyst predictions. It shows which providers operate in specific market segments, the customers they serve, how they position their services, and where there may be room for stronger differentiation.
“Benchmarking helps validate where we should and shouldn’t compete, and how we can deliver more value within our chosen niche,” said Manoj Tandon, co-founder and CEO of Dark Rhiino Security, a 2025 MSSP Alert Top 250 honoree.
2. Match the pricing model to the service economics
There is no universal pricing model that works for every managed security service. MSSPs should choose pricing units based on how the service is consumed, how vendor costs are structured and how delivery effort scales.
Manoj Tandon
Common models include:
- Per user: Works well when the underlying licensing or value delivery is tied to employees.
- Per device or endpoint: Useful for endpoint security, EDR, MDR and device-based monitoring.
- Flat rate: Best for highly standardized services with predictable delivery costs.
- Usage-based: Appropriate when consumption varies significantly by client.
- Custom-priced: Best for advisory, investigative or labor-variable services.
“Each pricing unit should be tied to the nature of the service, the underlying technology, the cost structure, and the way the client consumes value. For example, a service built on a per-user/per-month licensing model should not be forced into a per-device model unless the economics have been carefully validated. Doing so can quickly create margin compression or even negative-margin contracts. The pricing model has to reflect the operational and vendor cost reality behind the service,” Tandon said.
3. Package predictable services only
According to Tandon, services with predictable, scalable and repeatable cost structures are the easiest to package. Examples include SIEM, EDR, endpoint protection, phishing protection, and similar OEM-backed technologies where the cost model and delivery process are well understood.
“Services that have highly variable labor requirements should generally remain custom-priced. That includes threat hunting, compliance policy development, security architecture, incident response, and other advisory or investigative services where scope and effort can vary significantly from client to client,” he said.
Package when:
- Costs are predictable.
- Delivery is repeatable.
- Scope is easy to define.
- Automation or platform support creates scale.
Custom-price when:
- Labor effort is uncertain.
- Risk varies widely by client.
- Discovery is required before scope can be defined.
- Client maturity significantly affects delivery.
4. Build packages around outcomes, not tools
Samuel Mascato
Samuel Mascato, business growth adviser at Sandler South Carolina, emphasizes the importance of creating cybersecurity packages that simplify decisions without adding complexity.
“The strongest MSSPs align services to business risk and outcomes, not a list of tools. When clients understand the value, price becomes far less of the conversation,” he said.
Dori Spade, former MSP leader and president of the consulting firm Call to Action, shared one common mistake that MSSPs make: taking an all-or-nothing approach to packaging security. While a one-size-fits-all approach may work for smaller organizations, larger co-managed IT environments often have existing tools or internal requirements that must be accommodated.
Spade recommends a two- or three-tiered framework that establishes a minimum security baseline while still providing flexibility for clients with mature internal capabilities.
“The goal is to maintain security standards without forcing clients to replace solutions that are already meeting their requirements. This approach tends to create a better customer experience while increasing adoption of higher-value security services over time,” she said.
5. Price for sustainable gross margin
Underpricing often happens when MSSPs set prices based on what sounds competitive instead of what is financially sustainable. To avoid this, MSSPs should understand OEM retail pricing, distributor pricing, competitive pricing, client willingness to pay and sector-specific buying behavior.
Tandon believes a baseline target for managed cybersecurity packages is a gross margin of more than 50%. This gives the business enough room to fund service delivery, support, sales, operations and reinvestment.
“From a valuation perspective, buyers and investors want to see that revenue is recurring, margins are defensible and service delivery is scalable. If pricing is inconsistent or packages require too much custom labor, it becomes harder to prove that the business can grow profitably,” he said.
When a service cannot reach the target margin, MSSPs should evaluate whether to:
- Repackage it.
- Bundle it with higher-value services.
- Change the technology stack.
- Adjust delivery assumptions.
- Remove it from the portfolio.
“MSSPs need to understand the market, the underlying OEM cost structure and the client’s willingness to pay in the industries they serve,” Tandon said. “That means knowing OEM retail pricing, distributor pricing, competitive pricing, and sector-specific buying behavior.”
But Tandon said the key is to benchmark extensively and build financial models that define acceptable gross margin, discounting limits and delivery cost assumptions before a service is taken to market. “Underpricing usually happens when pricing is set based on what sounds competitive rather than what is financially sustainable,” he noted.
6. Use data to make pricing defensible
Tandon said effective pricing requires more than instinct. MSSPs should use analyst reports, OEM quarterly and annual reports, distributor pricing, OEM public pricing and competitive benchmarking to build financial models.
“We use these sources to build detailed financial models that support pricing, margin targets and clearly defined discounting limits for the sales team. The goal is to make pricing defensible, repeatable and financially sustainable rather than relying on instinct or one-off deal negotiation,” he said.
Dori Spade
These inputs help MSSPs create pricing that is:
- Defensible.
- Repeatable.
- Aligned with margin targets.
- Clear for sales teams.
- Less dependent on one-off negotiation.
MSSP pricing and packaging checklist
MSSPs need pricing and packaging strategies that are easy for buyers to understand, flexible enough to reflect client risk and disciplined enough to protect margins. Rather than building tiers around long lists of tools, the top MSSPs benchmark the market, align pricing units to data and market realities, and package only predictable and repeatable services.
Sustainable packaging also depends on clear margin targets, defensible financial models and a minimum security baseline that can flex for clients with different levels of maturity.
Before taking a cybersecurity package to market, answer each question with yes or no. Use this checklist to confirm that pricing is clear for buyers, aligned to market and delivery realities and disciplined enough to protect margins.
| Question | Yes | No |
|---|---|---|
| Does the pricing unit match the vendor cost structure? | ||
| Does the pricing model reflect how the client consumes the service? | ||
| Can the service meet the target gross margin? | ||
| Have delivery costs been modeled realistically? | ||
| Are discounting limits clearly defined? | ||
| Is the buyer outcome clear? | ||
| Does each tier deliver meaningful business value, not just more tools? | ||
| Are predictable, repeatable services packaged appropriately? | ||
| Are variable-scope services custom-priced? | ||
| Does the package align with a defined client niche? | ||
| Does the baseline offer reflect client risk, not just company size? | ||
| Can the package flex for clients with different maturity levels? | ||
| Is the pricing supported by market data, benchmarking, or financial modeling? | ||
| Can sales clearly explain why the package is priced the way it is? |
How to use this checklist
- If most answers are yes, the package is likely ready for market review.
- If several answers are no, the offer may need more work before launch, especially around pricing structure, margin protection, buyer value or delivery assumptions.
Jonathan Browning is executive director of content and engagement for The ChannelPro Network. He has been a leader in the IT channel for close to a decade. He’s an avid fan and early adopter of technology. He believes that the managed services industry is the most important driver of economic growth and human innovation in today’s world.
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