Password Vaults: What, where, when & why:
This is the second post in a series from Technology Transition Paradigm, spotlighting mission-critical features that are too often ignored by small and midsize businesses—and their MSPs—at their own peril.
In March 2021, Verkada Inc., a Silicon Valley-based surveillance tech company, suffered a massive breach that exposed live feeds from over 150,000 security cameras inside hospitals, jails, schools, and even Tesla’s offices. The root cause? Hardcoded super admin credentials stored in an unprotected internal development system.
This wasn’t a sophisticated attack. It was a preventable failure of basic password hygiene — the kind that a password vault could have easily mitigated. Three years later, after the FTC and DOJ investigation they paid a multimillion dollar fine.
What Is a Password Vault?
A password vault (or password manager) is a secure, encrypted tool that stores login credentials and helps users generate strong, unique passwords. It centralizes access, reduces human error, and protects against credential theft.
Why MSPs Must Lead the Way
Managed Service Providers (MSPs) should be advocating, facilitating, and furnishing password vaults as part of their standard service fee. This isn’t just a value-add — it’s a security baseline.
• Reduces breach risk from reused or weak passwords
• Streamlines operations with centralized credential access
• Supports compliance with data protection regulations
Yet, many MSPs still treat password vaults as optional — and many SMBs resist adoption due to migration effort or tool fatigue.
Countering Resistance
User pushback is common:
• “It’s too much work.”
• “I already have a system.”
• “We’re too small for this.”
MSPs must counter this with:
• White-glove onboarding
• Training and support
• Clear communication about breach risks and ROI
If Full Adoption Isn’t Feasible…
Not every organization can roll out a vault overnight. Here are fallback positions that still move the needle:
1. Personal Vaults: Encourage staff to use free or low-cost tools like Bitwarden or KeePass.
2. Start with Admins: Secure the most privileged accounts first.
3. Shared Team Vaults: Pilot vaults with small teams to build internal champions.
4. Password Audits: Run periodic checks to identify weak or reused credentials.
Final Thought
Password vaults aren’t just tools — they’re culture-shifting safeguards. MSPs must lead the transition with empathy and strategy. Because in cybersecurity, the basics aren’t basic — they’re foundational. At Technology Transition Paradigm, we assess the effectiveness of a business’s password security as part of our comprehensive Cybersecurity and IT Best Practices Audit, ensuring that this critical layer of protection is not overlooked.