Project-based IT work is the engine of many MSPs — but it is also unpredictable, competitive, and margin-thin. Recurring GRC revenue is the antidote. Here is why the shift from project to subscription fundamentally changes an MSP business.
Who this is for: MSP owners and financial leaders evaluating how to build more predictable, higher-margin revenue streams.
TL;DR
- Project-based IT revenue is lumpy, competitive, and requires constant new business development
- GRC managed services generate predictable monthly recurring revenue (MRR) that compounds over time
- In practice, many MSPs report annual retention rates for GRC managed services in the high-80% to low-90% range, often outperforming traditional IT-only engagements
- An MSP with AUD 100K MRR from GRC has significantly higher enterprise value than one with the same revenue from projects
- 6clicks makes it possible to launch your first GRC subscription client within 2–4 weeks of joining the partner program
The fundamental problem with project-based IT revenue
Project revenue has four structural weaknesses:
- It is lumpy: Quarterly and annual revenue is difficult to predict, making hiring and investment decisions difficult
- It requires constant business development: Each completed project creates a pipeline gap that must be filled
- It is competitively bid: Project work is often subject to competitive tender, creating downward price pressure
- It has low retention value: There is no contractual obligation for the client to come back for the next project
Many MSPs supplement project revenue with managed infrastructure contracts, but even these are increasingly commoditized and price-competitive.
The compounding economics of recurring GRC revenue
GRC managed services generate a fundamentally different revenue dynamic:
- Monthly recurring revenue (MRR) — predictable, contractual, and invoiced automatically
- High retention — compliance obligations do not disappear; clients renew because they must
- Expansion revenue — as clients add frameworks, increase scope, or grow in size, subscription value increases
- Compounding growth — each new client added compounds the revenue base; each retained client extends it
A practice that adds 5 new GRC clients per quarter at AUD 5,000/month and retains 90% annually will generate approximately:
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Year 1: AUD 1.2 million ARR
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Year 2: AUD 2.28 million ARR
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Year 3: AUD 3.25 million ARR
This is the compounding effect of subscription revenue with high retention.
The enterprise value argument
Recurring revenue businesses are often valued at a meaningful premium compared to project-based services firms. Traditional IT services businesses may trade at lower revenue multiples, while managed services and subscription-based businesses with strong recurring revenue and retention can attract valuations in the multiple-times-ARR range depending on growth, profitability, and market conditions.
For an MSP owner planning for exit or investment, transforming project revenue into recurring GRC revenue dramatically increases the value of the business.
How to transition existing clients from project to subscription
The most common transition path:
- Deliver a compliance gap assessment as a project (one-off, fixed price)
- Present findings with a recommended ongoing management program
- Propose a monthly subscription to deliver the remediation roadmap and manage ongoing compliance
- Position the subscription as the natural next step: the assessment creates the need, the subscription delivers it
6clicks makes this transition seamless: the gap assessment delivers immediate value, and the platform is ready for ongoing subscription delivery from day one.
How 6clicks supports the shift to recurring GRC revenue
6clicks equips MSPs with key capabilities for building a sustainable managed service delivery model:
- Hub & Spoke: Scales subscription delivery without proportional cost increases
- Automated reporting: Monthly client reports are generated automatically, reducing delivery cost
- Evidence collection automation: Ongoing compliance maintenance is partially automated through 6clicks
- Partner pricing: Designed for MSP subscription economics with predictable platform costs
Frequently asked questions
Clients with compliance obligations can typically be converted within 2–3 months: deliver a gap assessment, present findings, propose a subscription. Most conversions happen within 30–60 days of the initial compliance conversation.
Most MSPs offer 12-month minimum terms, aligned to compliance program cycles. Annual or multi-year contracts improve predictability and reduce churn.
Recurring revenue with high retention is typically valued at a premium compared to project revenue in M&A transactions. For MSPs, building a recurring GRC practice can materially increase enterprise value by improving revenue predictability, retention, and long-term cash flow visibility.
Yes. Many MSPs offer both. Gap assessments and initial implementations are project-based; ongoing management converts to subscription. The goal is to maximize the subscription proportion over time.
GRC managed services typically retain 85–95% of clients annually, compared to 70–80% for pure IT managed services. Compliance obligations create a structural reason to stay.
Next step
Start building recurring GRC revenue with 6clicks.
