Why Every MSP Should Offer Password Vault Management to Clients
After 30 years running and managing managed IT services to end clients, we can tell you that one of the most critical—and often overlooked—components of any MSP’s security offering is encrypted password management. With cyberattacks on the rise, particularly those targeting smaller businesses, password breaches have become a frequent and damaging occurrence. Weak or compromised passwords are often the easiest entry points for attackers, and yet many businesses still don’t have a secure system for managing them, or tools to search the Dark Web for their domain’s credentials, that could indicate an on-going security breach.
This is why, as an MSP broker, we encourage every client & MSP we work with to implement encrypted password vaults. Without a secure, centralized way to store and update passwords, businesses are leaving themselves exposed to significant risks that could not only cause major financial losses but also ruin their reputations.
The Risks of Not Having a Password Vault:
Password management might seem like a basic part of IT infrastructure, but poor password practices are one of the leading causes of data breaches. Verizon’s Data Breach Investigations Report highlights that 81% of hacking-related breaches are tied to stolen or weak passwords. Without a secure password vault, clients often resort to insecure practices—reusing passwords across different platforms, writing them down in unsafe places, or worse, sharing them via unsecured methods like email.
Not having an encrypted password vault means that businesses are more likely to experience a breach, which could lead to data theft, operational downtime, and even regulatory fines. For industries bound by strict regulations, such as healthcare, finance, and government, the stakes are even higher. These industries face specific compliance mandates that require the secure storage of passwords.
Compliance and Regulatory Requirements for Password Vaults
Regulatory frameworks are now placing heavy emphasis on password security and encrypted storage. For example:
NIST 800-171: This standard, which applies to contractors handling controlled unclassified information for the U.S. Department of Defense, specifically requires encryption for all sensitive data, including passwords, both at rest and in transit.
HIPAA: In healthcare, HIPAA mandates that all electronic protected health information (ePHI) be safeguarded, which includes the encrypted storage of passwords that access patient data.
CMMC (Cybersecurity Maturity Model Certification): Required for businesses working with the Department of Defense, CMMC stipulates strong access controls, including secure password management and encryption.
Failing to comply with these regulations can result in fines, legal issues, and loss of contracts. A password vault helps ensure compliance with these standards by offering secure, encrypted storage of credentials, along with features like password rotation and access control.
Top Password Vault Solutions for SMBs and Mid-Market Clients to buy directly
Several leading password vault solutions can help MSPs deliver these services to end clients:
LastPass: One of the most popular options, LastPass offers encrypted password storage and is known for its user-friendly interface. With approximately 30% of the U.S. market share, it’s a reliable and scalable choice for businesses of all sizes. LastPass is generally more affordable than some of its competitors, making it a good fit for small to mid-sized businesses that need a straightforward solution for secure password storage and sharing without extensive advanced features.
Dashlane: With around 15% of the market, Dashlane is known for strong encryption and password-sharing capabilities. Dashlane tends to be slightly more expensive than LastPass, but it offers more advanced security features, like dark web monitoring and VPN integration. This makes Dashlane a better fit for mid-sized to larger businesses or those in industries like finance and healthcare, where additional layers of security are crucial and compliance is a top priority.
1Password: Holding about 12% of the U.S. market, 1Password integrates well with a variety of platforms like Slack, Zoom, and Dropbox. It’s a mid-range option in terms of cost, offering excellent ease of use without sacrificing security. It’s especially popular with smaller businesses and personal users that value simplicity but still need strong password protection. 1Password is ideal for small businesses or teams that prioritize quick deployment and seamless integration with other business tools.
Keeper Security: Known for its enterprise-grade security features (Advanced Encryption, Role Based Access Control, Audit Trails and Logging) Keeper Security is the most feature-rich—and often the most expensive—of the group, with about 10% market share. Keeper offers encrypted password storage, secure file storage, and breach detection, making it highly suited for larger enterprises or highly regulated industries like healthcare, government, or legal services. Keeper is best for larger businesses with complex security needs or strict compliance requirements, such as HIPAA or CMMC, due to its robust feature set.
While these platforms are strong choices for businesses, MSPs require more tailored solutions that can securely handle multiple clients under one roof.
Multi-Tenant Password Vault Solutions typically bought through MSPs
To manage multiple clients, MSPs need multi-tenant platforms. The two primary solutions in this space are IT Glue (and its client-facing version, MyGlue) and the password management solutions embedded in ConnectWise. If your MSP doesn’t have one of these tools, or something similar – they are not conforming to industry standards / best practices.
IT Glue and MyGlue: IT Glue is a documentation platform built for MSPs, offering a secure, multi-tenant password vault for managing multiple clients’ data separately. MyGlue, an extension of IT Glue, allows clients to handle their own passwords while keeping MSPs in control of the overall security. IT Glue has captured around 25% of the U.S. MSP market and remains a trusted solution for MSPs who want to manage client passwords efficiently.
ConnectWise (Manage and Automate): ConnectWise offers integrated password management through its platforms Manage and Automate, leveraging Passportal, a secure, encrypted password management solution built specifically for MSPs. ConnectWise’s integration allows for automation of password rotation, secure storage, and seamless handling of multiple client accounts—streamlining operations for MSPs.
Why Every Business Needs Encrypted Password Vaults
If you’re an MSP—or a business that relies on one—failing to use an encrypted password vault is a significant risk. Password vaults are not just a “nice to have” anymore. They’re essential tools for preventing data breaches, ensuring regulatory compliance, and safeguarding a business’s reputation. MSPs who offer these solutions aren’t just protecting their clients—they’re building trust and long-term relationships by providing critical cybersecurity.
At our CyberSecurity and MSP brokerage company, we emphasize the importance of this service with every MSP we work with. The risks of not securing passwords are simply too high, and we strongly encourage MSPs we recommend offer top-tier, encrypted password vault solutions to protect your business from these ever-growing threats.
If you do not have a Password Vault currently in place for your business, contact your MSP or our office to quickly protect your data and organization. These can be implemented within weeks, and will greatly improve your Information Security footing and according risk profile.