As MSPs look for new recurring revenue opportunities beyond traditional infrastructure and support, video surveillance and VSaaS are becoming more strategically important. In that context, VMS selection is much more than just a technical decision; it’s a decision about control – over pricing, hardware, service delivery, and the client relationship itself.
When MSPs evaluate a video management system, the conversation usually starts in the right place, around features, camera compatibility, and ease of deployment. But it can stop short of the question that matters most strategically, which is, how much control does this platform give me over my own business? That’s where the real difference between open and closed VMS platforms comes into focus, and where a platform choice that looks reasonable in year one can gradually put pressure on margins, limit flexibility, and weaken client ownership over time.
The distinction between open and closed is fundamentally a business model question. Closed, proprietary platforms bundle hardware, software, and cloud services into a single package. That can make initial deployment straightforward, but it also transfers a significant amount of commercial control from the MSP to the vendor. Open, hardware-agnostic platforms separate the software layer from the physical infrastructure, giving MSPs (and their clients) more freedom to make independent decisions about hardware, pricing, deployment, and customer relationships. The practical consequences of that difference increase over time in ways that are easy to miss when a contract is first signed.
The Hidden Cost of Proprietary Hardware
The clearest immediate consequence of a closed VMS platform is hardware lock-in. Proprietary systems require their own cameras, gateways, or storage devices. For an MSP, that creates several downstream challenges.
First, any client that already owns IP cameras from another manufacturer may need to replace them, adding cost friction to what might otherwise be a straightforward sales conversation. Second, the MSP loses the ability to source hardware competitively. If the platform requires vendor-specific equipment, the vendor controls the available options and, in many cases, the economics. Third, and perhaps most significantly, that hardware dependency becomes a structural barrier to switching. The client is now invested in a camera ecosystem, not just a software platform, which makes it far harder to move them later to a better fit or more cost-effective solution.
For MSPs building a managed service practice, hardware agnosticism is really a margin protection mechanism. The ability to work with what clients already own, or to source cost-effective third-party cameras without vendor approval, keeps the cost of new deployments lower and the sales motion simpler. Open platforms that support a broad range of IP cameras, including most of the popular devices available in the market, give MSPs the flexibility to optimize for cost and client fit on every engagement rather than forcing every customer into the same hardware model.
Pricing Control, Margins, and the Vendor Relationship
Hardware lock-in is the most visible form of dependency, but pricing structure is where the long-term financial consequences can be even greater. Many closed VSaaS platforms impose fixed per-camera or per-site pricing on their MSP partners, which means the vendor effectively sets the floor on what MSPs can charge. That is not automatically disqualifying. If the margins are healthy and the product is meaningfully differentiated, a fixed pricing model can be workable. But, it does mean that, as competition increases, an MSP on a closed platform has limited room to respond.
When the market shifts, MSPs selling and managing closed systems cannot selectively discount to win a competitive opportunity, and they cannot easily restructure pricing to bundle surveillance more effectively with other managed services. Closed platforms often compound this with long-term contract commitments that reduce flexibility even further. An MSP locked into a multi-year vendor agreement has less leverage to renegotiate terms as the business grows, and less freedom to exit if the platform fails to evolve in ways that support customer needs.
Open platforms, on the other hand, tend to offer more favorable licensing structures that let MSPs set their own pricing, bundle services as they choose, and scale up or down without punitive terms. That flexibility has real financial value because it gives MSPs more control over how they price, package, and grow the service over time – the key to structuring a profitable managed services portfolio.
There is also the question of the client relationship itself. Some closed VSaaS platforms maintain a direct relationship with the end client, billing them directly, providing support under the vendor’s brand, or requiring them to interact with vendor-controlled portals. For MSPs that have built their business on being the single point of contact for clients’ technology needs, that model can create real tension. The value of the MSP relationship is trust, continuity, and ownership of the customer experience. Every touchpoint a vendor inserts between the MSP and the client weakens that position and creates an opening for the vendor to become something more than a supplier.
Operational Flexibility and Long-Term Scalability
Beyond margins and customer ownership, open versus closed has meaningful implications for how an MSP operates at scale. Closed platforms are generally monolithic: hardware, software, storage, and cloud infrastructure are tightly integrated. That can simplify some aspects of deployment, but it also places hard limits on flexibility.
If the vendor’s cloud storage pricing becomes uncompetitive, there may be no alternative. If a client needs an on-premises deployment for compliance reasons, a cloud-only closed platform may not be able to accommodate it. If integration with an access control system or AI analytics tool becomes a customer requirement, the MSP is dependent on whether the vendor has built or approved that capability.
Open platforms, by design, avoid many of these constraints. Flexible deployment options (e.g., on-premises, cloud, edge, or hybrid) allow MSPs to match infrastructure to customer requirements, rather than forcing customers to adjust their requirements to match the platform. Open APIs and SDK support mean third-party integrations do not depend entirely on vendor permission, and the ability to run VMS software in virtualized environments gives MSPs the same optimization options they already rely on for other workloads.
These factors all become practical enablers of a more scalable service business that can accommodate a wider range of customer needs without hitting operational blocks that eventually require a platform change.
Scalability matters, especially for MSPs managing multi-client environments. Closed platforms designed primarily for single-organization deployments often require separate logins, separate portals, and separate administrative environments for each customer. That may be manageable for a handful of deployments, but it becomes increasingly burdensome as the client base grows. Open platforms built with MSP delivery in mind typically offer centralized multi-tenant management, where all customer organizations are visible and managed from a single interface. At 10 clients, the difference may be minor but, at 50, it becomes the difference between a service line that scales efficiently and one that accumulates cumbersome manual overhead.
Choosing the Right VSaaS Partner for Your MSP
None of this means closed VSaaS platforms have no place in the market. For MSPs looking for the simplest possible entry into surveillance – meaning, one vendor, bundled hardware and software, and minimal configuration decisions – a closed platform can get a first deployment off the ground quickly. The trade-off is that simplicity at the beginning can come at the cost of flexibility later.
The proprietary hardware becomes a retention mechanism that works against the MSP if they ever want to change direction. Fixed pricing limits the ability to compete aggressively or improve margins over time. The vendor relationship, rather than the MSP relationship, can begin to sit at the center of the customer experience.
For MSPs serious about building VSaaS into a durable, high-margin service line, the logic continues to point toward open platforms. The up-front investment in learning and configuration is real, but it is a one-time cost. The margin control, hardware flexibility, pricing autonomy, operational adaptability, and client relationship ownership that come with an open platform are ongoing advantages that compound with each new deployment.
Platforms like Nx Witness Enterprise are built around that open model, emphasizing broad hardware compatibility, MSP-controlled subscription pricing, multi-tenant management through Nx Cloud, and integration flexibility through APIs and SDKs. In other words, they are designed to support the way MSPs actually operate and grow, rather than forcing the business to conform to a vendor-controlled framework.
On the surface, VMS selection looks like a technology decision. In practice, it is a decision about control – over margins, client relationships, flexibility, scalability and, ultimately, profitability.
Edited by
Erik Linask
