An MSP owner almost needs to be a lawyer or legislator these days to keep up with the ever-changing regulatory landscape or at least have one on speed dial. There is a lot to navigate, from state privacy laws and industry-specific regulations to tightening cyber insurance requirements.
In 2026, the growing thicket of regulations is pushing compliance pressure down to SMBs that previously flew under the radar. For many of those businesses, compliance feels like an unfunded mandate: a set of obligations they don’t fully understand, can’t staff internally, and aren’t sure how to prove.
For MSPs, however, that blind spot presents a recurring revenue opportunity. The question is how to package compliance services in a way that’s scalable, defensible, and worth renewing year after year.
Start with risk, not the framework
The first thing MSPs need to get right, according to experts, is understanding what they’re actually selling.
“The trap for MSPs is packaging a bunch of security controls and calling it compliance,” says Alexander Perrin, founder of Patient Protect, a healthcare compliance consultancy.
Perrin tells SmarterMSP.com that MFA, endpoint protection, backups, and vulnerability management are important, but having them doesn’t automatically make a healthcare practice HIPAA compliant. The remaining work requires significant manpower and coordination: risk analysis, policies, training, vendor management, remediation, incident response, and documentation.
“That’s what I’d build the recurring service around,” Perrin says.
Omair Manzoor, founder and CEO of ioSENTRIX, a CREST-accredited penetration testing and compliance services firm, says the biggest mistake MSPs make when building Compliance-as-a-Service (CaaS) offerings is leading with the framework instead of the risk.
“SMBs do not buy SOC 2 because they understand controls. They buy it because a customer or cyber insurer told them they need it,” says Manzoor.
He recommends starting with a gap assessment that maps a client’s current state against the framework their market demands, followed by remediation and evidence collection packaged as a managed monthly service. He also makes a strong case for penetration testing as a CaaS differentiator.
“Every major framework requires it. Most SMBs cannot source it independently, and the MSP that bundles testing with continuous compliance monitoring creates stickiness that pure documentation services cannot match.”
The real value is managing evidence
The evidence retention challenge is where many MSP compliance programs begin to struggle, according to Cam Roberson, VP of Channel at Beachhead Solutions.
“Every technical control that CMMC, HIPAA, insurance applications, and vendor questionnaires ask about is something MSPs and MSSPs already watch every day,” he says. “You know which laptops are encrypted because you are the ones managing the encryption. Once the ticket closes, though, that fact goes nowhere.”
Fourteen months later, he notes, someone is often reconstructing the same information from screenshots late at night and calling it evidence.
His solution is straightforward.
“What’s needed is a system for retaining evidence as it changes and tracking it against the thresholds each framework cares about.”
Roberson recommends choosing a framework with existing market demand, identifying controls that current tools already report on, and producing a monthly artifact a client can present to an insurer, auditor, customer, or regulator.
“Price it as its own subscription instead of burying it in the bundle,” he says.
For MSPs already using Barracuda solutions, many of the technical controls are already in place. The Compliance-as-a-Service opportunity lies in transforming the evidence those tools generate into a documented, auditable compliance narrative clients can use to demonstrate compliance.
What a successful compliance service looks like
Julian Gage, fractional Data Protection Officer and founder of Engage Compliance, offers one of the clearest pictures of what a viable CaaS package should include.
“What goes in it matters less than whether it recurs,” he says.
His package includes:
- A continuously maintained data map
- A vendor register with data processing agreements tracked and updated
- A documented breach and data subject request process
- A named compliance contact clients can reference on security questionnaires
“That last one is the urgent thing right now,” Gage says, “because the questionnaire is usually what’s holding up their next enterprise deal.”
He recommends pricing the service as a flat monthly fee based on factors such as headcount, systems, data types, and regulatory complexity.
“Hourly billing punishes you for getting faster, and it teaches clients to ration their questions, so you stop hearing about problems early.”
Like Manzoor, Gage recommends aligning compliance programs to the frameworks customers and prospects already require, which are often SOC 2 or ISO 27001.
Make compliance a recurring service, not a project
For MSPs supporting growth-stage businesses, Yulia Plugatyreva, Senior SOX and IT Auditor at Chime, offers an important warning.
“The biggest mistake is treating compliance as documentation,” she says. “You can write a policy later. You cannot recreate audit evidence that was never captured.”
That reinforces a common theme echoed by every expert: compliance should not be treated as a one-time engagement.
“MSPs that price compliance as flat-fee project leave recurring revenue on the table,” says Manzoor. “The ongoing evidence collection, policy maintenance, and control validation is where the margin lives.”
As regulatory requirements continue to expand, MSPs have an opportunity to move beyond simply implementing security controls. By helping customers manage risk, maintain evidence, and demonstrate compliance over time, MSPs can create a recurring service that delivers lasting value to clients while generating predictable revenue for their business.
Photo: L.O.N Dslr Camera / Shutterstock
