The Managed Services Game: Why CaaS is Your Winning Play

Regulations are skyrocketing. How should MSPs respond to this undeniable trend? Are you idling on the sideline or exploring ways to draft Compliance as a Service (CaaS) into your game plan?

In this post, we’ll take a look at why MSP compliance services are such a home run for your value proposition. The nonnegotiable and complex nature of compliance is exactly why you should make CaaS the MVP of your MSP service lineup.

As complex as the regulatory playing field is, it does represent a giant business opportunity for MSPs that seek to edge ahead of the competition. We’ll go as far as to say it’s your ticket to reducing risk and doubling your revenue.ƒ

1. The Playing Field: Complex with Lots of Potential

The IT services market is in a major league shakeup. Gartner predicts a record-breaking year for tech spending in 2024, with a massive 8.7% surge in spending on IT services – reaching a sky-high $1.5 trillion. This explosive growth signifies a significant shift, with IT services becoming the MVP spending category for the first time, surpassing even software sales.

But what's driving this surge in demand for outsourced IT services? Here's a breakdown of the key market forces creating a perfect storm for the adoption of Compliance as a Service for MSPs:

1. The Outsourcing Offensive: Businesses are Taking a Backseat on IT

Businesses are increasingly offloading their IT burdens and focusing on their core competencies. The 2024 CompTIA State of the Channel study highlights this trend, with a significant shift towards managed services. The report reveals that 38% of channel companies (companies that sell or service IT products) are now primarily selling tech services, compared to only 27% focusing on tech products. This trend creates a wide-open lane for MSPs to offer a broader range of services, including compliance.

2. The Regulatory Rollercoaster: Keeping Up with the Compliance Curve

The regulatory landscape is a constantly evolving playing field. Ever-increasing cybersecurity threats and data privacy concerns demand a new level of expertise. CaaS emerges as a clutch teammate for businesses navigating this complex terrain. By offering expertise in compliance frameworks and best practices, MSPs can leverage CaaS to help businesses establish effective governance and ensure they're following the rules of the game.

3. The Cybersecurity Skills Shortage: A Growing Talent Deficit

The cybersecurity talent pool is shrinking rapidly, leaving companies scrambling to find qualified professionals. CompTIA's IT Industry Outlook 2024 report underscores this challenge, revealing that over 660,000 cybersecurity-related job openings existed in the United States between May 2022 and April 2023 – a staggering 28% increase from the same period in 2020.

CaaS allows MSPs to offer compliance expertise without the burden of recruiting and training their own cybersecurity team. This frees up resources and allows MSPs to deliver a valuable service despite the talent shortage in the cybersecurity market.

4. The Productivity Push: Streamlining Processes for Faster Plays

Compliance tasks can be time-consuming and resource-intensive. Enter CaaS. CaaS allows MSPs to streamline internal processes, freeing up internal reserves to focus on core business functions, ultimately enhancing overall productivity.

Summing Up

These market forces are creating a powerful upswing in demand for outsourced IT services, particularly those that address the growing need for compliance expertise. For MSPs, it represents a golden opportunity to step up to the plate and deliver value-added services that hit right at the heart of these challenges. CaaS isn't just about keeping up with regulations but turning compliance into a competitive edge with the potential to double your revenue.

2. The Pitch: Understanding CaaS

Imagine if you could not only provide your clients peace of mind regarding cybersecurity and data protection laws but also transform this assurance into a revenue stream. That's CaaS in a nutshell. It involves facilitating aspects of compliance — from risk assessments and asset governance to policy creation and incident response plans — under a subscription model that fits seamlessly into your service portfolio.

Here's the beauty: You can leverage your existing expertise in areas like backups, multi-factor authentication, and security training. CaaS lets you repackage these services with our compliance scorecards and governance tools to create a powerful, recurring revenue stream.

Think of it as a comprehensive compliance package:

Policies & Procedures: Streamline policy creation and management.
Backups & Disaster Recovery: Ensure business continuity with secure backups.
Multi-Factor Authentication: Add an extra layer of security to logins.
Security Awareness Training: Educate employees to identify and avoid cyber threats.
Enhanced Antivirus: Protect against evolving malware with advanced security solutions.
Governance Reporting & Facilitation: Track progress, identify gaps, and demonstrate compliance.
Vulnerability Program: Proactively identify and address security weaknesses.

3. Scoring Points: Revenue Benefits

Diversify Your Playbook: By adding CaaS to your MSP services, you expand your roster of tools and open up new revenue channels. With so much at stake, clients are searching for comprehensive packages that address all their IT needs, including compliance.

Retain Valuable Players: CaaS encourages longer client engagements. With continuous compliance needs, clients are less likely to switch providers, leading to higher retention rates and stable revenue streams.

Win New Contracts: In industries where compliance is nonnegotiable (healthcare, legal, finance, CPA, and more), offering CaaS positions you as an expert who can navigate the regulatory maze. This makes your MSP the go-to team for potential clients in these sectors.

4. Offensive Plays: Cost Savings

Take a provocative approach: By shifting left of boom and taking a proactive approach, you can reduce risk and be more defensible when boom happens.

Reduce Penalty Risks: Noncompliance can cost businesses dearly, not just in fines but also in reputational damage. By leveraging CaaS, you can take a proactive stance and mitigate these risks.

Streamline Operations: Implementing CaaS streamlines various aspects of compliance management through integration of compliance tasks. This not only cuts down on manual labor and reduces errors but also optimizes the overall operational costs. (Note: Do not believe anyone who says the entire compliance function can be automated; it’s simply not that easy and never a one-time undertaking)

Enhance Team Efficiency: Backed up by the right compliance software and expert support, your team becomes better and more efficient, leaving you more time to focus on high-value areas of the business, improve productivity, and reduce burnout.

5. Training Camp: Implementation

Implementing CaaS doesn't have to be a daunting task. Start by evaluating your current service offerings and identifying compliance gaps. The fact is MSPs have nearly all the pieces in place to hit CaaS out of the park (More on this in our Guide for download below).

Next, consider partnering with a provider that offers comprehensive compliance management tools that can be integrated into your existing services. Training your team on these tools and the nuances of various compliance frameworks will ensure that you can pitch CaaS confidently to your clients.

6. Victory Lap: CaaS as a Long-term Strategy

Think of Compliance as a Service for MSPs not just a service but a strategic enhancement to your business. It’s about playing the long game — building trust, ensuring client satisfaction, and setting up your business for scalable growth. As compliance regulations evolve and expand, your readiness to address these changes can make your MSP a leading player in the industry.

7. Next Steps: Join the League of Leading MSPs

Ready to step up to the plate and hit a home run with CaaS? Download our easy-to-read Guide on “Why MSPs Should Draft CaaS into Their Game Plan“ for the full story on the opportunities that the rapidly growing field of compliance presents. It features all the strategies you need to make CaaS your MVP and watch your revenue — and client trust — soar.

Closing Rally

Embracing CaaS is like having a star player who consistently scores points, helps win games, and keeps the fans — your clients — cheering. Isn’t it time you drafted this all-star into your team?

Questions? Our Compliance Scorecard team can’t wait to answer them. Contact us today for more information, join a Live Demo to see the impact for yourself, or tap into Peer Group, our expert-led training program.