As a business owner, you wear many hats—but IT expert shouldn’t have to be one of them. That’s where an MSP comes in.
As cybercrimes rise, you need an MSP that’s fully equipped to protect your business in a volatile threat landscape. One with robust MSP password management systems. One that can safeguard your data amidst economic and geopolitical turmoil.
The right MSP should also have a global presence with broad regulatory expertise. Its security infrastructure should be battle-tested, ready to ensure your data is secure AND accessible when you need it. And it should be flexible enough to grow with your business.
But before you make a decision, let’s start with what your business needs.
Does your business really need an MSP?
It’s no secret that using an MSP is the fastest (and easiest) way to bridge gaps in technical expertise: 61% of your peers engage an MSP for this purpose. In fact, small businesses with 1 to 500 employees comprise the majority of MSP clients (60%).
Meanwhile, 56% and 44% respectively use MSPs to manage remote workforces and defend against increasingly sophisticated cyber threats.
Many are willing to pay for the peace of mind an MSP can provide, with 56% spending anywhere from $50,000 to $500,000 annually. Still, 96% of businesses with budget concerns insist it’s far cheaper than hiring IT talent.
As a result, the global MSP market is projected to grow from USD $297.20 billion to USD $878.71 billion by 2032.
Cybersecurity remains a key offering: MSPs say they expect it to remain the #1 reason businesses engage their services in 2025 and beyond.
So, do you really need an MSP? With 43% of attacks now targeting SMBs and only 14% of targeted SMBs prepared to handle such attacks - the answer may have already been decided for you.
How threat actors target your small business
Size matters, after all.
Attackers see small businesses as easier targets because of the perception that they have fewer security protections and limited IT resources.
In many cases, that perception is sadly, too accurate.
In 2013, hackers infiltrated Target’s network through a small HVAC vendor with inadequate security defenses. This attack compromised 41 million credit and debit cards and 70 million customer records – and ended up costing the retail giant $202 million in losses.
In 2025, we’re seeing a rise in nation-state actors targeting critical infrastructure.
Many small businesses support critical sectors such as energy, defense, emergency services, healthcare, communications, transportation, and water.
Attackers are increasingly resorting to cyber-attacks as a first-strike option in geopolitical conflicts. And they are using ransomware, phishing campaigns, AI-based disinformation, and edge device exploitation to achieve their goals.
No business is safe. Many businesses, critical or not, are part of supply chains or serve as vendors to larger organizations - and attackers know this. That’s why Akira, a Ransomware-as-a-Service group, targets all types of small and medium businesses – 86% of its victims worldwide have fewer than 1,000 employees.
The risks of poor MSP password management for your business
As seen above, the interconnected nature of modern digital systems means your business is at risk, as the ripple effects of geopolitical tensions are felt across continents.
One way nation state actors are targeting small and medium businesses is through their managed service providers (MSPs).
By compromising an MSP, these attackers can potentially access the networks of multiple client networks.
The repercussions for your business are severe and far-reaching:
- Financial impact. In 2025, global cybercrime costs are expected to hit $10.5 trillion annually. This includes costs related to the theft of intellectual property, lost productivity, fraud, business disruptions, restoration of hacked systems, and reputational damage.
- Damaged reputation. Negative media coverage often follows a high-profile breach. More than 60% of consumers who hear about a breach say they would stop purchasing from the business altogether. And a whopping 83% agree or strongly agree with the statement, “These days, I think about whether I trust a company to keep my information safe before I buy something from them.”
- Legal and regulatory issues. Data breaches often result in costly lawsuits and fines from regulatory bodies, with legal battles dragging on for years. In 2024, EUR £1.2 billion in GDPR fines were imposed, and according to Forrester, class action costs related to data breaches are expected to outpace regulatory fines by 50% in 2025.
- Customer churn. Rebuilding consumer trust after a breach can take years. The cost of lost business due to a data breach hit a record $2.8 million in 2024.
Three reasons your MSP needs password management: #3 will shock you
#1 Cyber security IS password security.
In late 2023, foreign threat actors successfully infiltrated a small Massachusetts power utility system and managed to remain undetected for 10 months. Given the interconnected nature of grids, this intrusion could have compromised the ENTIRE critical infrastructure system on the Eastern seaboard.
The group’s method of initial access is compromising network edge devices like firewalls, routers, and VPN hardware with default factory passwords. If your MSP is breached due to weak password security policies and your data is exposed, your business could face irreparable legal, financial, and reputational damage.
#2 Compliance shouldn’t be a cat-and-mouse game – your business can’t afford a compliance gap.
If your MSP isn’t proactively managing credentials with a password manager, your business risks non-compliance with the world’s most important data privacy regulations. Choose an MSP that treats compliance as a priority – not an afterthought.
#3 The human link is the weakest link in cybersecurity.
As a business owner, you’ve poured your heart and soul into growing your business. Your MSP is, without doubt, a key business ally. But it’s also important to acknowledge they can represent a potential area of vulnerability.
For example, is your MSP reusing passwords across multiple client systems? Poor password management practices by your MSP’s employees could lead to a higher likelihood of your systems being breached - and attackers helping themselves to your most valuable business assets. It’s 2025: when was the last time you checked your MSP’s password security policy?
- Unlimited amount of users
- 100+ customizable access policies
- LastPass Families for employees
- Directory integration
The five key elements of an effective MSP password manager
Element #1: Easy to use and deploy
As a business owner, you have no time to lose. An effective MSP password manager should be:
- Easy to deploy, regardless of your technical background
- Easy to use, with secure autofill functionality to save you and your employees TIME
- Easy to recover, with multiple self-service recovery options
Element #2: Secure by Design
An effective MSP password manager meets Secure by Design principles recommended by the international community of cybersecurity agencies.
In a nutshell, “Secure by Design” is “Secure by Default” out of the box. An MSP password manager that’s Secure by Design protects against the most prevalent threats and vulnerabilities - without extra charge and without the need to configure further security controls.
Element #3: Customizable security policies
Many open-source password managers offer basic access controls. However, when it comes to business, one-size-fits-all security policies can under-protect departments with specific compliance obligations. They create security gaps that put highly confidential data at risk.
An effective MSP password manager should offer group or department-specific customizable policies to meet the diverse requirements of your business.
Element #4: Powerful phishing-resistant MFA options
MFA bypass isn’t the name of a medical procedure.
It’s the disturbing trend of attackers using advanced techniques to hijack user accounts despite MFA being enabled.
In 2025, SMS MFA is no longer safe.
An effective MSP password manager should provide FIDO2 phishing-resistant MFA, which requires direct interaction between the user’s device and service being accessed. Hackers would need both the credentials and physical device to hijack your accounts, making MFA bypass nearly impossible.
Element #5: Continuous monitoring
In 2025 and beyond, cyber resilience will be proactive, rather than reactive in nature.
With cyber threats evolving at breakneck speed, any delays in breach detection can spell disaster. Manual security checks can lead to overlooked vulnerabilities and leave your business exposed for longer periods.
An effective MSP password manager should offer:
- Automated password health scoring & breach notifications
- Real-time visibility into your current security posture
See why LastPass is the world’s premier MSP password manager
“We’ve partnered with LastPass for nearly two years now and feel very safe and secure in our relationship.” ~ Don Viar, managing partner and CEO at EpiOn.
EpiOn is a Tennessee-based MSP that helps businesses improve their productivity levels and lower their cyber risks.
The challenge: EpiOn wanted to improve their organization’s security posture and protect their customers.
The solution: With LastPass, EpiOn staff and customers were able to eliminate password reuse and strengthen their cyber resilience.
- The LastPass password generator allowed EpiOn employees and customers to easily create complex passwords that align with CISA and NIST password policies.
- The Shared Folders feature enabled the sharing of exact passwords, notes, and data with the right people.
- FIDO2-certified MFA options allowed EpiOn employees and customers to utilize only trusted devices in the authentication process.
The results: Since adding LastPass to their portfolio of offerings, client adoption has been 100%. With the inclusion of FIDO2 MFA and the friction-free passwordless experience it delivers, EpiOn’s teams are happier and less frustrated.
“We know that as an MSP, we’re always a target... To us, this is the future, we’ve seen clients asking for a solution like this [LastPass] and we expect that it will soon become the standard... We’ve had nothing but success during our deployment and collaboration with LastPass, and we always have a great time working with their team.” ~ EpiOn CEO Don Viar
Our LastPass Partner Network is 10,000+ strong across the world. With LastPass, businesses get a tailored solution that offers visibility and control over every access point. If your MSP is ready to tackle password security, learn how our new Partner Program is designed to make password management secure, effortless, and efficient.
