Transitioning Your MDR Services: Building In-House Capability vs. Partnering with a New Provider or the third way…

Moving on from my last article — Is now the time to consider or reconsider your MDR strategy?

The evolving threat landscape and rising regulatory demands make Managed Detection and Response (MDR) services essential for any organisation’s security strategy. However, if you are considering moving away from an incumbent MDR provider, then you have an important strategy decision to make: should you invest in building an in-house Security Operations Centre (SOC), outsource to a new provider, or consider a hybrid model?

In this article, I explore the key factors in making this decision, the pros and cons of each approach, and provide a structured roadmap for transitioning your MDR services effectively.

Why Transitioning MDR Providers is Becoming Commonplace

Organisations are revisiting their MDR arrangements for various reasons, including:

• Legacy Vendor Limitations: Incumbent providers may struggle to integrate with modern cloud-centric environments or lack advanced tools.
• Cost Efficiency: Rising costs without corresponding value often prompt a rethink of service arrangements.
• Capability Gaps: Legacy providers may lack capabilities such as advanced threat hunting, comprehensive visibility, or proactive vulnerability management.
• Control and Customisation Needs: Businesses increasingly seek greater control and alignment of cybersecurity services with their internal goals.
• Regulation drives evolution: New regulations such as DORA and NIS are driving evolution in MDR services. These regulatory frameworks emphasise enhanced resilience, faster incident response, and improved defences, which directly impact how MDR/SOC services are designed, delivered, and operated.

This leads to the critical question of how to structure your MDR services moving forward.

Option 1: Building an In-House MDR Capability

Establishing an in-house SOC provides control and customisation over your security operations. It can align directly with your organisation’s unique risk profile and compliance requirements.

Advantages of In-House MDR

1. Customised Approach: Tailor security operations to your specific infrastructure and risk appetite.
2. Enhanced Oversight: Greater visibility and direct management of security processes.
3. Data Sovereignty: Keep sensitive information entirely within your organisation’s control.

Challenges of In-House MDR

1. Resource-Intensive: Requires substantial investment in infrastructure, personnel, and ongoing training.
2. Talent Shortage: Hiring and retaining skilled security analysts can be challenging in a competitive market.
3. Time-Consuming Deployment: Building a mature SOC from scratch can take several years, leaving vulnerabilities in the interim.

Option 2: Partnering with a New Outsourced MDR Provider

Engaging a new MDR partner offers scalability, speed, and access to specialised expertise, making it a practical choice for many organisations.

Advantages of Outsourcing

1. Cost-Effective: A new partner can offer advanced capabilities at a lower cost than building in-house.
2. Access to Expertise: Leading MDR providers bring specialised skills, tools, and intelligence to bear on your security challenges.
3. Rapid Implementation: Transitioning to a capable provider is quicker than building an in-house solution.

Challenges of Outsourcing

1. Vendor Dependency: Relinquishing control to a third party can create challenges in aligning priorities.
2. Integration Complexities: Migrating systems and workflows to a new provider requires careful planning.
3. Potential Misalignment: The provider’s generalised service may not fully align with your specific needs.

Option 3: The Hybrid Approach: The Best of Both Worlds

For many organisations, a hybrid approach combines the advantages of in-house control with the scalability and expertise of outsourced MDR providers. This strategy allows for tailored solutions that maximise flexibility and resilience.

Benefits of a Hybrid Approach

1. Strategic Control: Retain control over critical areas such as incident response, forensic analysis, or policy compliance while leveraging external resources for 24/7 monitoring and threat detection.
2. Optimised Costs: Outsourcing routine operations while focusing in-house resources on strategic priorities reduces costs and operational overheads.
3. Scalability: Partnering with an MDR provider for monitoring ensures coverage across evolving threat landscapes while allowing in-house teams to scale capabilities at their own pace.
4. Access to Expertise: Use the outsourced provider’s advanced technologies and intelligence to supplement your team’s knowledge and processes.
5. Business Continuity: Hybrid models allow in-house teams to focus on high-priority or highly sensitive areas while ensuring outsourced providers manage routine incidents efficiently.

Considerations for Implementing a Hybrid Model

• Clearly define roles and responsibilities between your in-house team and the outsourced provider to avoid overlap or gaps.
• Establish robust communication channels and escalation protocols for seamless collaboration.
• Use the hybrid model as a stepping stone towards fully in-house capabilities if desired.

The hybrid approach is particularly suited for organisations that want to balance control, cost, and the need for sophisticated threat monitoring.

Creating a Roadmap for Decision-Making

A structured roadmap can simplify the complex decision-making process and ensure a smooth transition.

Step 1: Assess Organisational Needs

• Identify gaps in your current MDR service, including unmet compliance requirements, incident response times, and technology limitations.
• Determine your organisation’s risk appetite and key priorities, such as data control, cost management, and scalability.

Step 2: Conduct a Cost-Benefit Analysis

• Compare the upfront and ongoing costs of building an in-house SOC versus engaging a new provider or hybrid model.
• Factor in potential downtime, recruitment, and operational challenges associated with each option.

Step 3: Evaluate Market Options

• Research potential MDR providers, focusing on their alignment with your infrastructure (e.g., Microsoft Sentinel).
• Assess the provider’s reputation, SLA commitments, and ability to deliver tailored solutions.

Step 4: Engage Stakeholders

• Collaborate with internal and external stakeholders, including IT, compliance, and executive teams, to align objectives and expectations.
• Set expectations regarding metrics. Set Cyber Protection Level Agreements (CPLA) to help set your risk appetite according to delivery realities.
• Seek input from current service providers on transitional support.
• Map and Set your Value Streams which include all the different stakeholders who will participate in the service.

Step 5: Plan the Transition

• Develop a clear migration strategy, including timelines, key milestones, and risk mitigation plans.
• Ensure redundancy in monitoring and response capabilities during the transition.

Step 6: Establish Continuous Improvement

• Implement a feedback loop to review and refine processes, ensuring your MDR strategy evolves with your business needs and the threat landscape.

Final Thoughts

Transitioning your MDR service is an opportunity to rethink your organisation’s approach to security. Whether you choose to build in-house capabilities, outsource to a new provider, or adopt a hybrid model, the key lies in aligning your MDR strategy with your broader business goals.

By following a structured decision-making process and considering hybrid models as a flexible, scalable solution, your organisation can navigate this critical transition with confidence and emerge with a stronger, more resilient cybersecurity posture.