Assessing the cost-benefit tradeoffs of in-house versus outsourced security operations centers for small and medium-sized technology companies

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Executive Summary

Small to medium-sized technology companies face a critical decision in implementing their Security Operations Center (SOC) capabilities: build internally or outsource to specialized providers. This analysis examines the total cost of ownership, operational implications, and strategic considerations for companies with 50-500 employees or $10-100 million in annual revenue.

Our research indicates that outsourcing delivers superior economics for most SMB technology companies, with annual costs typically 60-80% lower than in-house alternatives. While in-house SOCs offer maximum control and customization, they require investments of $1.95-5 million annually and 12+ months to achieve operational maturity. Outsourced solutions provide immediate 24/7 coverage at $500,000-1 million annually, with proven scalability and access to specialized expertise.

The decision ultimately depends on specific organizational requirements, but the data strongly favors outsourcing for resource-constrained technology companies seeking robust security capabilities without prohibitive costs or lengthy implementation timelines.

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