Cybersecurity 
Password managers are among the most helpful security tools available, offering strong password generation and encrypted credential storage. However, attackers are beginning to target password managers
Leading Managed Service Provider (MSP) distributors aren’t just adding identity tools to their marketplace. They are redefining the criteria for partnership within their ecosystems.
For years, joining a major distributor’s marketplace was primarily a commercial transaction. Submit your business details, pass some basic onboarding checks and sell away. Identity security was an afterthought, a product category rather than a partnership requirement.
Those days are gone.
Across the channel, MSP distributors are making a decisive pivot. What was once a line item on an MSP’s product menu has become a foundational gate to the ecosystem itself. MSPs that fail to prioritize identity-first security strategies may struggle to remain competitive within today’s partner networks.
Why identity security is becoming required for MSP partnerships
According to the Huntress 2025 Managed ITDR Report, identity-based attacks account for over 40% of all security incidents, with more than half of organizations hit by business email compromise last year alone. Furthermore, Sophos X-Ops research found that stolen credential listings on the dark web surged 106% between June 2024 and June 2025. These aren’t abstract threat intelligence metrics; they’re the daily reality for the organizations MSPs serve.
Because identity-related compromises can have far-reaching consequences across client environments, distributors have a growing responsibility to promote stronger identity protections throughout their partner network. Leading platforms are already responding by launching formal security programs based on frameworks such as CIS Controls and curating identity-focused vendor portfolios.
The message is clear. Strong identity and access controls are now a baseline requirement for marketplace members.
How Microsoft’s CSP requirements are raising identity security standards for MSPs
If the threat landscape made the case for identity security, Microsoft’s updated CSP requirements demonstrated how quickly those expectations are becoming formalized. It’s just one example of a broader shift taking place across the technology ecosystem, where vendors, marketplaces, cyber insurers and compliance frameworks are raising the bar for security accountability.
On October 1, 2025, Microsoft’s updated CSP policy went into effect across all partner tiers, requiring measures such as Multi-Factor Authentication (MFA) enforcement, designated security contacts and timely responses to security alerts. For existing partners, compliance is validated annually, with deauthorization possible for those that fail to meet these obligations.
Standards like these are becoming an increasingly essential component of partner evaluation. MSPs that cannot demonstrate basic identity hygiene, including MFA enforcement and secure credential management, may find it more difficult to participate in vendor ecosystems, distributor programs and security-focused partnerships moving forward.
Why distributors are prioritizing identity-first MSPs
As identity threats become a greater business concern, they’re not only changing what MSPs need to do – they’re reshaping who distributors want to recruit in the first place.
The reality is that distributors operate at the intersection of vendors and MSPs. Success depends not only on attracting identity-first vendors but also on recruiting partners with the skills and capabilities to support those products. An MSP running on shared credentials, without MFA enforcement or Identity Threat Detection and Response (ITDR) visibility, may eventually jeopardize the distributor’s reputation and compliance posture.
Security-conscious providers are becoming premium recruits. MSPs that have invested in identity infrastructure – such as MFA enforcement, Privileged Access Management (PAM) and ITDR – are increasingly attractive to distributors seeking to fuel marketplace growth. These providers are often better positioned to upsell, reduce operational risk and serve organizations that view cybersecurity as a strategic priority rather than a compliance checkbox.
Security posture assessments are becoming a more common part of the partner-vetting process. An MSP that can demonstrate a well-developed identity management strategy signals operational maturity, compliance awareness and readiness to support leading security solutions and services.
This trend extends beyond traditional access and credential controls. ITDR is emerging as a powerful differentiator among MSPs that distributors are looking to recruit, helping providers enhance their security offerings with continuous identity monitoring, threat detection and response. As identity-based attacks escalate, identity resilience has become a key priority across users, systems and access points.
For distributors, this represents more than another security category. It is creating a growing divide between MSPs that can deliver advanced identity security services and those that cannot. Providers that can effectively position, deploy and manage modern identity solutions are creating new recurring revenue opportunities and addressing client needs that many of their competitors are not equipped to support.
Identity management is also evolving beyond human users. Service accounts, API credentials, machine identities and AI-driven workflows now have access to business-critical systems across MSP-managed environments. As organizations continue to adopt automation and AI technologies, securing these Non-Human Identities (NHIs) is emerging as a critical component of modern security strategies.
MSPs that invest in these security practices today will be better positioned to address tomorrow’s security challenges. Likewise, distributors that recognize these trends early and align their partner ecosystems accordingly will be better prepared to attract forward-thinking MSPs, support long-term partner success and strengthen their position in a security-driven channel landscape.
How MSP distributors can build identity-first partner environments
The distributors that move with urgency will shape the future of MSP talent within their partner networks. Identity now serves as the lens through which partner recruitment, enablement and implementation help create identity-first marketplaces.
Below are several practices top distributors can prioritize to create stronger, identity-first marketplaces:
- Standardize identity-focused assessments across MSP onboarding
- Launch enablement programs designed to help MSPs sell through versus just deploy, identity security solutions internally
- Establish identity competency benchmarks and certification pathways for MSP partners
- Incentivize proficient MSPs with preferential terms, greater co-marketing support and priority access to new vendor relationships
- Facilitate peer-to-peer knowledge sharing among MSPs that have successfully built identity-focused security practices
- Clarify expectations for identity maturity through recruitment materials and ongoing touchpoints
Identity security is the new measure of MSP success
What began as a security requirement is evolving into a competitive advantage. The distributors leading this charge are no longer managing marketplaces where security is optional. They are building ecosystems where identity security is a foundational requirement, and partners that fail to meet those standards may struggle to remain relevant.
For MSP distributors, the timing matters. Compliance expectations are tightening, risk exposure is growing and end clients are demanding higher levels of operational maturity from their service providers. Strong identity practices are quickly becoming a defining characteristic of the MSPs that customers, vendors and channel partners want to work with.
The question for every distributor is simple: Is your marketplace for the MSPs of the past or for the ones your customers actually need?
KeeperMSP: Built for the identity standard distributors need
This is where purpose-built identity security solutions will help distributors strengthen their MSP recruitment and enablement strategies. As a zero-trust, zero-knowledge PAM platform, KeeperMSP provides the identity infrastructure needed to meet compliance requirements, protect client environments and stand out in the partner-vetting process.
As MSP expectations continue to evolve, distributors need more than another logo to add to their portfolios or another security solution for their marketplaces. They need partners that help them attract, enable and retain the MSPs shaping the future of the channel.
Keeper is already embedded in major distribution ecosystems, providing MSPs with a purpose-built, multi-tenant platform to secure credentials, manage secrets and operationalize identity security at scale. Beyond the technology itself, Keeper positions distributors to capitalize on one of the fastest-growing priorities in managed services: enabling MSPs to deliver scalable, recurring security services centered on identity.
A core identity foundation delivers strategic benefits that extend well beyond technology adoption. It drives deeper partner engagement, better recruitment conversations and sustainable ecosystem growth. By equipping MSPs with the tools, resources and security capabilities they need to succeed, distributors can establish a more differentiated and valuable channel offering.
The channel is entering a new phase – one where MSPs are evaluating partnerships based not only on product capabilities but also on the business outcomes those partnerships enable.
The distributors that thrive in this environment will be the ones that align their ecosystems with where MSP demand is headed. By embracing an identity-first approach, they will be better positioned to attract the next generation of MSPs, foster stronger partner relationships and cultivate more resilient, higher-margin channel programs.
