Stop Letting MSPs Play Fast and Loose with Your Data
Small and Medium Enterprises (SMEs) constantly rely on Managed Service Providers (MSPs) to modernize their IT operations. Unfortunately, this dependency can also introduce risk by leaving your critical data exposed. It's crucial to understand the ways MSPs tend to misuse client data—and take the proactive steps necessary to protect it. This quick post will help ensure your data remains securely under your control.
The most common risk associated with external MSPs involves the unauthorized sharing of your data. Without thinking twice—and without your explicit consent—an MSP might share sensitive information with third parties, either unwittingly, or to facilitate external partnerships, or for profit.
Mishaps tend to happen most often when an MSP interacts with a third-party vendor on your behalf. For instance, an MSP may unintentionally disclose confidential your data while evaluating or implementing a third-party vendor's solution to determine how well it meets your needs.
Frequently, an MSP that is either on-premises at your campus, or has remote access to your data, will innocently forward sensitive information to others in their organization. Although this may be within the bounds of the non-disclosure and confidentiality agreements, this type of data-sharing commonly leads to further leakage as data concepts—or the data itself—is re-shared with coworkers, increasing the likelihood it will be shared externally with third parties.
Somewhat less innocently, in our travels we occasionally find that MSPs reuse client data and other strategic information to improve their own standing in the market or even to improve the digital maturity of the client's competitors. This not only breaches your organization's privacy but could also lead to a marketplace disadvantage by giving competitors a peek at your playbook. Worse yet, these practices can make your company, customers, and employees more vulnerable to attack by expanding their threat vectors or by revealing confidential personal data.
Organizations need to be aware of, and defend against, such practices by adopting rock-solid non-disclosure and confidentiality agreements. Such agreements are best introduced early in the MSP relationship—even during the sales process—to establish up front your level of seriousness when it comes to protecting your data. You’re the customer; you’re in control.
Even if not driven by malicious intent, MSPs have been known to employ insufficient security measures, misconfigure systems and software, or deploy vulnerable 3rd party software into your environment (Kesaya Ransomware Attack , Connectwise Ransomware Attack , Secret Service Alerts on Hacked MSPs) , leaving your data vulnerable to breaches. According to a Cybersecurity Ventures study, in 2023, ransomware attacks occur every 2 seconds (43,200 per day). In an era of increasingly sophisticated—even AI-driven—cyber threats, any security lapse exposes your business to significant risk—everything from financial loss to reputational damage. Besides which, if they skimp on security, who's to say what else they're skimping on?
MSPs have been known to rebuild client systems in a way that makes it difficult for the client to migrate or access their data independently. This practice is so common, it has a name: "data lock-in." Victims of data lock-in are locked-in to the MSP, forced to rely on the MSP for access to data and analytics for all future data needs. A victim’s freedom, flexibility, and bargaining power has been wiped out, potentially leading to increased costs and compromised service quality. That's not digital transformation; that's a digital straitjacket. Worse yet, the consequences could be disastrous should the MSP go out of business or disappear altogether.
Begin by conducting a thorough audit of your data management and security protocols. Review your MSP's terms of service and data handling procedures. Ensure they align with your business’s privacy policies and legal requirements. Regular audits will also help you identify any discrepancies or vulnerabilities in the data management process. If you need ideas on how to get started with your data audit, try these resources:
Sharevault Security Audit Guide
Amend your contractual agreements with the MSP to include strict clauses on data handling, security, and sharing. Make sure these contracts clearly define the boundaries and obligations of both parties, including specifics around who can touch your data, how, and when. No reputable MSP would take offense at this level of cautiousness. Legally reinforcing your expectations ensures compliance, safeguards your data against unauthorized use, and clarifies that any breaches will come at a cost—for the MSP.
Lastly, always hire a reputable, well-established consulting firm that specializes in data management and security. Such a firm will provide expert guidance on establishing robust data governance frameworks and negotiating fair terms with MSPs. Additionally, they will help implement the latest security measures and compliance standards, ensuring your data always remains protected and under your control.
Taking these steps will significantly mitigate the risks associated with MSPs and ensure your business-critical data remains an asset that propels your business forward, rather than a liability that puts you at peril. In today’s digital age, proactively protecting and maintaining full control of your data isn’t just a suggestion—it’s an imperative.
Remember, the key to successful data management is vigilance, transparency, and informed decision-making. Retake control of your data today to secure your business in the increasingly complex days to come.
Seabeck Systems ensures your MSP isn't putting your reputation—and the privacy and safety of your employees, clients, and customers—on the line with inadequate security measures for your business-critical data. For over 25 years, we've empowered clients to generate greater value from their MSPs and internal teams. We capture your business strategy in an easy to socialize format and blueprint your technical infrastructure to guide your team through your custom digital transformation.
Your organization should be next.
