Why recurring GRC revenue beats project-based IT work

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:

1. It is lumpy: Quarterly and annual revenue is difficult to predict, making hiring and investment decisions difficult
2. It requires constant business development: Each completed project creates a pipeline gap that must be filled
3. It is competitively bid: Project work is often subject to competitive tender, creating downward price pressure
4. 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:

• Year 1: AUD 1.2 million ARR

• Year 2: AUD 2.28 million ARR

• 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:

1. Deliver a compliance gap assessment as a project (one-off, fixed price)
2. Present findings with a recommended ongoing management program
3. Propose a monthly subscription to deliver the remediation roadmap and manage ongoing compliance
4. 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

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