As cybersecurity threats rise and the damage caused by security incidents grows, businesses must simplify system access while protecting data and meeting compliance requirements. With that in mind, Identity and Access Management (IAM) has emerged at the center of security.
IAM centers on four critical areas: Authentication, authorization, identity governance and monitoring, and auditing. While IAM is a critical part of what MSPs should offer clients, it comes with thin margins and technical hurdles. Often, building profitable systems is challenging for MSPs.
However, IAM is more than a collection of tools and technologies; it’s part of a broad Zero Trust framework. “MSPs have traditionally viewed IAM as a cost center. They need to rethink it as a profit center,” stated Michael Roth, CEO and founder of Evo Security.
Michael Roth
IAM in Action: Manage Access Without Sacrificing Productivity
Rather than just being a modern version of Active Directory, IAM holistically manages people, systems, devices, and access. “It’s critical to provide the right level of security, manage compliance and yet not get in the way of people completing their daily tasks,” shared Mike Adler, chief technology product officer at N-able.
As IT and cybersecurity evolve, they are fueling IAM adoption. Clouds, distributed devices, work-at-home arrangements, and the like have made identity management more complex — not to mention imperative. In fact, the Covid-19 pandemic fundamentally changed cybersecurity, according to Alex Perala, editor in chief of ID Tech Wire and Mobile ID World, who co-hosts the ID Talk podcast. “It pushed all kinds of businesses into digital channels much faster than expected. This opened a whole new frontier of identity fraud, with criminals racing to follow vulnerable end users into these new domains.”
A modern IAM platform supports core technologies to authenticate users. This includes various types of multifactor authentication (MFA), biometrics, and passkeys. “Authentication is at the core of IAM,” Roth explained. It also incorporates components like role-based access controls, attribute-based access controls, and privileged access management (PAM).
When these tools connect to protocols such as single sign-on (SSO) and various standards — such as LDAP, SAML, OAuth, and Open ID Connect — it creates a more sophisticated, resilient framework. It’s possible to manage and protect disparate apps, devices, web services, and data within the context of identity.
Alex Perala
Breaking Free from Passwords
Putting IAM in motion presents a few challenges. For one thing, many service providers and their clients aren’t up-to-speed on IAM, Perala said. “MSPs can play a huge role in improving enterprise security by actively explaining the need for post-password security.”
Of course, this requires specialized expertise in several areas — along with an understanding of tools, technologies, and specific business requirements. This knowledge must span everything from MFA and passkeys to SSO and the effective use of biometric authentication. “It’s important to match technologies to the specific needs of the organization,” Adler said.
Mike Adler
Another challenge for MSPs is that IAM margins are typically slim. In most cases, vendors set pricing with little or no markup for service providers. Getting around this issue requires MSPs to approach identity management strategically. “It’s wise to view it as part of a broader Zero Trust framework and look for ways to bundle business and security services,” Adler pointed out.
It’s possible to dial up the value proposition through identity audits and other services. This might include a review of onboarding and offboarding processes, PAM, and ways to reduce administrative controls. It also might include a review of authentication methods, such as replacing texts and more basic forms of MFA with rolling codes and moving from passwords to biometric passkeys.
In this scenario, the MSP becomes a trusted advisor, Adler insisted: “You want to build a center of expertise and demonstrate the value of IAM to clients.”
Holistic Approach to IAM
IAM isn’t just a technical necessity. It’s a strategic opportunity for MSPs to differentiate themselves, build stronger client relationships, and drive recurring revenue. By pairing IAM solutions with broader security and compliance frameworks, MSPs can become trusted advisors in an increasingly digital and regulated world.
As cybersecurity threats evolve, those who embrace IAM as a profit center rather than a cost center will find themselves better positioned to deliver value and boost the bottom line.
Top 3 Ways MSPs Can Monetize IAM
1. Bundle IAM with Security and Compliance Services
Position IAM as part of a broader security offering by integrating it with services like endpoint protection, SIEM, and compliance management. Highlight the value of identity audits and tools like MFA, SSO, and biometric passkeys to improve client security and meet regulatory requirements.
2. Offer Value-added Identity Audits
Conduct onboarding/offboarding reviews, privileged access management (PAM) assessments, and authentication method upgrades. Propose solutions like replacing SMS-based MFA with more secure options like rolling codes or biometric authentication, boosting both security and customer confidence.
3. Leverage Managed IAM Subscriptions
Partner with vendors offering MSP-friendly pricing models and white-label IAM solutions. Build recurring revenue by managing IAM platforms for clients, ensuring seamless integration, and offering ongoing support and updates as part of a managed services package.
Featured image: iStock
