Growth and Sustainability of MSSP Networks

Managed Security Service Provider (MSSP) networks are a form of collaboration where several firms share resources such as diagnostics, prevention tools, and policies to provide security for their computer networks. While decisions to outsource security operations of an organization may seem counterintuitive, there are potential benefits from joining a MSSP network due to pooling of risk and access to more security-enabling resources and expertise. We provide structural results that explain the reasons for firms to join a MSSP network. We also characterize the growth of MSSP network size under different forms of ownership (monopoly vs. consortium). Our results illustrate the need for initial investment in MSSP networks to overcome initial stalling effect and illustrate that while need for initial investment may increase the optimal network size for a consortium, it has no impact on the optimal network size for a profit maximizing monopolist.