As cyber threats and risks grow in greater volume and refinement, cybersecurity has become mission-critical for businesses of all sizes. To address this shift, SMB has urgently turned its attention to VCISO services to meet urgent threats and compliance demands. A recent report by Cynomi found that 79% of MSPs and MSSPs are seeing high demand for VCISO services between SMBs.
How do service providers scale to meet this demand? Can they expect to see which business they can see? And where does AI fit?
The answer is provided in the 2025 VCISO Report. This newly released report dives deeper into the evolution of the VCISO market and a broader shift towards advanced cybersecurity services. Conclusion? What used to be a niche product is now a fundamental service, and AI is changing how it is delivered. Below we present some of the main findings from the report.
319% growth in VCISO adoption: MSPS & MSSPS compete to meet SMB demand
VCISO products provide a flexible and cost-effective way for organizations to access high-level cybersecurity expertise without the overhead of a full-time executive. Furthermore, it is not surprising that demand for VCISO services has skyrocketed among SMBs, as there is a growing awareness of the importance of cybersecurity, and the number of attacks is increasing. Demand for VCISO services outweighs compliance preparation and even cyber insurance support.
Figure 1: Demand for advanced cybersecurity services among SMB clients
In response, the adoption of the VCISO offering between MSPs and MSSPs jumped from 21% in 2024 to 67% in 2025. This is an increase of 319% in just one year. Additionally, 50% of service providers that are not yet in place will launch VCISO products by the end of the year. This adoption curve reflects clear industry changes, from VCISO to being a niche service to becoming a core service.
Figure 2: Plans to provide VCISO services
Actual business impact: higher margins, better upsells, more repetitive revenue
Adoption growth is not driven solely by client demand. It is also based on the strong business outcomes of the provider. Organizations that provide VCISO services report great benefits.
41% report an increase in upselling opportunities and see 40% leveraging VCISO to provide additional services.
And of course, VCISO services offer great security benefits to clients. From a service provider angle, key security expertise elevates them beyond merely temporary vendors and into trusted, long-term strategic partners.
Adoption barriers are authentic, but operational, not strategic
While enthusiasm among service providers is high, not all providers have yet to make a leap into VCISO services. Of those still in planning mode, the report identifies three major concerns:
35% cite uncertainty regarding profitability or ROI. 33% emphasizes the high prepaid investment requirements. 32% refer to a shortage of eligible cybersecurity professionals.
Importantly, few providers doubt the market demand or business value of VCISO services. Instead, they struggle to implement them efficiently and profitably.
This is where technology and automation work. As AI-powered platforms reduce manual effort and enable scalable service delivery, operational burdens become much more manageable and open doors for wider market participation.
AI is rebuilding the VCISO delivery model
AI is no longer a future consideration. It has already had a major impact on how VCISO services are provided. According to the report, 81% of MSPs and MSSPs are already using AI or automation within their VCISO workflows, adding a 15% plan to adopt it within next year.
Figure 3: Automation and AI tools in delivering VCISO services
AI applications in VCISO services are impactful across a wide range of areas, including automation and insight reporting, remediation planning, compliance preparation and monitoring, risk and security assessment, and task prioritization.
This results in a significant reduction in manual workloads. With an average decline of 68%, 42% of providers see workload reductions of 81-100% in some regions.
This allows service providers to support more clients, provide better quality output, and improve profit margins without expanding all the people. In fact, AI allows for the kinds of scales and consistency that traditional human-driven delivery models could not maintain.
The path ahead: AI-driven scale, strategy, and service differentiation
The 2025 State of the VCISO report draws clear pictures. As service providers continue to invest in automation and intelligent tools, the VCISO model shifts very efficiently from resource-rich AI-powered.
Looking forward to it, we look forward to seeing:
A wider market penetration between deeper AI integration of AI between MSP and MSSPs as service providers implement AI and other technologies in their processes and products.
Download the full VCISO Report for a complete view of trends, benchmarks and best practices that will shape the future of virtual cybersecurity leadership.
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