For managed security service providers (MSSPs), pricing is far more than a sales exercise—it is a strategic business decision that impacts profitability, scalability, customer satisfaction, and long-term company value. As cybersecurity services continue to evolve, MSSPs face increasing pressure to deliver strong security outcomes while maintaining healthy margins and competitive pricing.
In a recent feature by Channel Pro Network, Manoj Tandon, Co-Founder and CEO of Dark Rhiino Security, shared practical insights on how MSSPs can build pricing models that are both customer-friendly and financially sustainable. Rather than focusing solely on competitive pricing or bundling tools together, Tandon advocates for a disciplined approach built on market benchmarking, operational realities, and measurable business outcomes.
His advice offers a roadmap for cybersecurity providers seeking to create scalable service offerings that support growth while delivering meaningful value to clients.
Benchmarking Matters in MSSP Pricing Strategy
According to Tandon, one of the most overlooked aspects of pricing strategy is understanding where an organization fits within the broader cybersecurity marketplace. Market benchmarking provides valuable visibility into competitors, service offerings, customer segments, and emerging opportunities. By evaluating how other successful MSSPs position themselves, providers can identify areas where they can differentiate rather than simply competing on price. Tandon emphasizes that benchmarking is not about copying competitors. Instead, it helps MSSPs determine where they can create the most value and where they should focus their efforts.
As he explains, benchmarking helps organizations understand where they should and should not compete while revealing opportunities to strengthen their market position within a specific niche. For MSSPs looking to grow strategically, understanding the market landscape is often the first step toward building a pricing model that supports sustainable success.
Align Pricing Models with Service Economics
One of Tandon’s strongest recommendations is that MSSPs should avoid forcing services into pricing structures that do not reflect the underlying economics of delivery. Many cybersecurity providers make the mistake of choosing pricing models based solely on customer expectations or competitive pressures. However, Tandon argues that pricing should always be tied to how a service is consumed, how vendor costs are structured, and how resources are allocated.
For example, a service based on per-user licensing should generally remain aligned with that pricing structure. Attempting to convert it into a per-device model without careful financial analysis can create margin compression and profitability challenges. Every pricing unit should reflect operational realities. Whether a service is billed per user, per endpoint, at a flat rate, or through usage-based pricing, the model should accurately represent both the value delivered to the client and the costs incurred by the provider.
When pricing is disconnected from service economics, even high-revenue contracts can become unprofitable.
Package Only What Can Be Delivered Consistently
Another key lesson from Tandon is that not every cybersecurity service should be packaged into a standardized offering. Services that are predictable, repeatable, and scalable tend to be ideal candidates for packaged solutions. Technologies such as SIEM, endpoint detection and response (EDR), endpoint protection, and phishing protection often fit this model because their costs and delivery requirements are relatively consistent.
However, services involving significant human expertise and variable workloads require a different approach. Threat hunting, incident response, compliance consulting, security architecture design, and strategic advisory services often involve unique client requirements and unpredictable labor demands. Attempting to package these services into fixed-price offerings can create unnecessary financial risk.
Tandon recommends maintaining custom pricing for these engagements to ensure the scope, effort, and risk are properly accounted for before commitments are made. This approach allows MSSPs to preserve profitability while still delivering high-value consulting services tailored to each client’s needs.
Focus on Value and Outcomes Rather Than Technology
One of the most important shifts occurring across the cybersecurity industry is the movement away from tool-centric sales conversations. Tandon believes successful MSSPs should build services around client outcomes rather than technology stacks. While tools remain important, customers ultimately care about reducing risk, improving resilience, meeting compliance requirements, and protecting their businesses.
When security providers lead with outcomes instead of product features, conversations naturally become less focused on cost comparisons and more focused on business value. This mindset also helps MSSPs create stronger customer relationships. Instead of selling a collection of technologies, providers become trusted advisors helping organizations achieve meaningful security objectives. By framing services around measurable outcomes, MSSPs can differentiate themselves in a crowded marketplace and create stronger long-term client retention.
Sustainable Growth Requires Strong Margins
Many MSSPs fall into the trap of underpricing services in an effort to win business. While competitive pricing may generate short-term sales opportunities, it often creates long-term operational challenges. Tandon recommends targeting gross margins above 50% for managed cybersecurity service packages. This margin level provides sufficient resources to support service delivery, customer support, sales efforts, operational improvements, and future innovation. Healthy margins are not only important for daily operations, they also impact company valuation.
Investors and potential acquirers want to see recurring revenue streams, scalable service delivery models, and defensible margins. If an MSSP relies heavily on custom labor or inconsistent pricing practices, demonstrating sustainable growth becomes significantly more difficult. Rather than pricing based on what “sounds competitive,” Tandon encourages providers to develop financial models that clearly define acceptable margins, discounting limits, and delivery cost assumptions before services are brought to market.
Use Data to Create Defensible Pricing
Perhaps the most valuable takeaway from Tandon’s perspective is the importance of data-driven decision-making. Effective pricing should never be based solely on instinct or individual sales negotiations. Instead, MSSPs should build pricing frameworks using multiple sources of market intelligence. Tandon points to resources such as analyst reports, OEM pricing data, distributor pricing, vendor financial reports, and competitive benchmarking as essential inputs for creating reliable financial models.
These models help organizations establish financially sustainable pricing structures, consistent accross the business, easier for sales teams to communicate, aligned with margin objectives, and less dependent on one-off negotiations. By grounding pricing decisions in data rather than assumptions, MSSPs can create more predictable revenue streams while protecting profitability as they scale.
Building an MSSP for Long-Term Success
The cybersecurity services market continues to grow, but growth alone does not guarantee profitability. According to Manoj Tandon, successful MSSPs are built on disciplined pricing strategies, realistic service packaging, and a deep understanding of both market conditions and operational costs. His approach encourages providers to benchmark consistently, align pricing with service economics, package only predictable offerings, focus on customer outcomes, maintain healthy margins, and use data to guide every pricing decision. For MSSPs seeking sustainable growth, these principles offer a practical framework for building service portfolios that are easier to sell, easier to deliver, and more profitable over the long term. As the cybersecurity landscape becomes increasingly competitive, organizations that adopt this disciplined approach will be better positioned to scale successfully while continuing to deliver meaningful value to their clients.
Who We Are
Dark Rhiino Security isn’t just another cybersecurity vendor; we’re a strategic partner in digital resilience. Founded with the vision to make world-class cybersecurity accessible to organizations of all sizes, our team brings together decades of experience in security operations, threat intelligence, risk management, and compliance. Our clients range from small businesses and mid-sized enterprises to large government agencies and Fortune 500 corporations. What they all have in common is the need for tailored, effective, and scalable security solutions—and that’s exactly what we deliver.
But we don’t just focus on technology. At Dark Rhiino Security, we believe that cybersecurity is ultimately about people—protecting their data, their livelihoods, and their futures.
