Password Management for MSPs: Build Recurring Revenue

Managed service providers (MSPs) are increasingly seeking ways to expand beyond traditional IT support. According to the MSP GLOBAL State of the Industry Report, Summer 2026, 35.4% of MSPs identified expanding their service offerings as a top business priority, while 49% reported more client inquiries about cybersecurity services. Regulatory pressure is adding to that demand. Requirements such as NIS2 and DORA are making accountability and audit readiness more critical in purchasing decisions. Clients need tools that help them enforce security policies and produce evidence for auditors, rather than simply check compliance boxes.

Password management offers MSPs a way to respond to these demands while building a recurring revenue stream from existing clients. By integrating password management into their service offerings, MSPs can enhance security, streamline operations, and ensure compliance with European regulations. Here's how to turn it into a managed service, what clients gain, and how the Passwork MSP program makes it profitable.

Key takeaways

You buy a balance at a 20% discount from the list price.
You distribute the balance across client companies as you see fit.
Each client gets a ready Passwork Cloud instance on Passwork's servers, managed from one partner portal.
You pay Passwork from your balance and invoice the client under your own contract.
Start with one client who keeps credentials in spreadsheets.

Why password management fits the MSP service stack

A managed password manager helps MSPs solve several client problems at once. Centralized access management improves security, reduces time spent administering shared credentials, and simplifies employee onboarding and offboarding. At the same time, access controls and activity logs help clients meet relevant European regulatory requirements and provide the evidence auditors need for compliance.

Credentials are one layer of a client's IT estate that most MSPs leave to the client. Since you already manage their devices, applications, networks, and cloud services, you know who logs into what. A password manager extends that scope to shared logins without creating a new service category, and it sells to clients you already have.

Consider a 40-person accounting firm where staff share logins for financial platforms and client portals. Some passwords are stored in spreadsheets, while others are communicated through email and chat. When an employee leaves, someone must locate every shared account that person accessed. In a spreadsheet-and-chat setup, this is nearly impossible. Disabling the directory account does not help, as shared passwords and locally stored tokens remain valid even after the account is deactivated.

A managed password manager consolidates credential management by replacing spreadsheets with a single encrypted store, ensuring that each employee has access only to the credentials necessary for their role. This streamlined approach simplifies offboarding and automatically logs every access event. Clients without in-house security staff benefit significantly, as they gain robust tools to mitigate security risks and enhance compliance with regulations such as NIS2 and DORA.

How the Passwork MSP program works

Passwork provides MSPs with a secure, centrally managed password management solution they can offer to clients as a recurring service. Key advantages include:

Data hosting in Germany: Passwork Cloud instances are hosted on servers in Germany, helping clients address European data residency requirements.
Independently assessed security: Passwork regularly undergoes independent third-party security assessments, including a 2025 penetration test by HackerOne.
ISO 27001 certification: Passwork is ISO/IEC 27001 certified, demonstrating its commitment to established information security management standards.
Client isolation: Each client receives a separate Passwork Cloud instance with its own access controls, authentication settings, and activity logs.
Centralized administration: MSPs manage client instances, subscriptions, and billing through one partner portal.

In the Passwork MSP program, you create each client as a separate company in the partner portal, and Passwork provides a ready Passwork Cloud instance on its servers. You buy a prepaid balance at a 20% discount from the list price and assign it across clients. The margin comes from the discount on the balance.

The workflow has five steps:

Create the client company: Choose the instance version and the plan (Standard or Advanced).
Run a trial: The portal tracks the status and sends emails about the trial and low balance.
Configure the instance: Set up SSO, the instance owner, and enforced two-factor authentication.
Manage billing: Allow the portal to write off balance daily or for a fixed term with the number of users and the plan locked in.
Manage the client lifecycle: Move the client between statuses (active, read-only, disabled) as the contract changes.

What clients get inside the instance

Encryption before storage

Each client gets a separate Passwork Cloud instance with its own security settings. Client-side encryption is always enabled in Passwork Cloud. Credentials are encrypted before they reach the server, so they aren't stored in plaintext.

Access control that follows team changes

Passwork uses role-based access control (RBAC), with permissions assigned to groups rather than individual users. When someone leaves, removing them from the relevant groups revokes their access to the credentials those groups can use.

For clients using Active Directory or LDAP, group synchronization keeps vault permissions aligned with directory membership. New employees get access through their groups, and departing employees lose it when their membership changes.

Authentication configured per client

Each instance has its own authentication settings. SSO and enforced two-factor authentication (2FA) can be configured through the partner portal.

This lets clients apply their authentication policies without affecting other companies managed by the same MSP.

Activity logs for audits

The Activity Log records user and administrator actions. Clients can review who performed an action and use these records during internal security reviews or external audits. Instead of collecting evidence from scattered systems, they have a central record of activity within Passwork.

Technical support backed by user reviews
Clients receive technical support directly from the Passwork team. SourceForge reviewers frequently highlight the quality of support and ease of use. Passwork has also received the SourceForge Top Performer award for three consecutive quarters.

Next Steps: Elevate your service offerings

Start with your existing clients. Find out how they manage shared passwords and what happens when an employee leaves. Look for spreadsheets, credentials shared in chat, or accounts that former employees can still access.

These are opportunities to offer password management as a service. With Passwork, clients get a secure tool to control access and simplify audit preparation. They manage their own credentials, while you provide the software and help them get started.

Explore the Passwork MSP program and test the partner portal with your clients.