Nerdio Manager for MSP
"CIPP is free."
For MSP owners comparing Microsoft 365 management platforms, "CIPP is free" is usually less of an argument than a shortcut. Community tools provide real value, so paying for another platform naturally requires justification. The conversation, however, often begins with software before anyone has defined what the MSP expects governance to accomplish.
Reporting on tenant settings is one requirement. Maintaining policy baselines across dozens of customers is another. Tracking why an exception was approved six months ago—and proving that approval during an audit—requires something different.
Visibility into tenant configuration is only part of Microsoft 365 governance. At MSP scale, governance becomes the operating structure behind how policies are set, reviewed, changed, and enforced across every client environment. Two products can advertise many of the same capabilities while requiring very different amounts of operational effort.
What Microsoft 365 governance looks like at MSP scale
Governance often reveals itself through small inconsistencies. A Conditional Access policy is updated for one client but never applied to the rest. An engineer receives Global Administrator access for a migration and still has it months after the project ends. Another tenant has three policy exclusions nobody wants to remove because the original reason is buried in an old ticket—or was never documented at all.
The reason for the exception usually makes perfect sense when it's created. Six months later, the explanation is much harder to find than the configuration itself.
For MSPs, governance means making those decisions consistently across every Microsoft 365 tenant. Policy baselines need to be defined, administrative access needs clear boundaries, and exceptions need enough context that another engineer can understand them later. A dashboard can identify drift from the approved baseline, but it cannot explain whether the drift is intentional, who approved it, or whether it still belongs there. Governance begins after the report is generated, when someone decides what happens next.
Free Microsoft 365 management tools have real value
There's a reason community tools such as CIPP have become so popular with MSPs. They give providers centralized visibility across Microsoft 365 tenants without requiring significant software investment. For smaller providers, that can be the first practical step away from signing into every customer environment individually.
They also help establish basic standards, review configurations, and reduce repetitive tenant management work. Community-driven projects also move quickly, often reflecting how Microsoft 365 is managed in the field.
The approach works particularly well for smaller MSPs. A lean technical team often knows every tenant well, exceptions are easy to remember, and the engineer who creates a policy is usually the one reviewing it later.
The workload changes as the client base grows. More tenants introduce more policy variation, new engineers inherit decisions they didn't make, and compliance requests require documentation that informal workflows never captured. Centralized visibility remains valuable, but maintaining consistency increasingly depends on work happening outside the platform. The tool hasn't stopped doing its job—the work surrounding it has simply become larger than the tool itself.
The cost of free tools appears in the workflow
The operational cost usually hides in the work surrounding the platform.
An engineer compares policies across tenants. Someone searches PSA tickets to figure out why a security setting was excluded. During onboarding, a new team member asks whether a configuration is standard or unique to one client. Repeated across dozens—or hundreds—of Microsoft 365 tenants, those tasks quietly consume hours every week.
Audit requests expose another gap. A client wants to know who approved an exception, when it was reviewed, or why one tenant doesn't match the standard baseline. A configuration report shows the current state, but it doesn't preserve the decisions behind it. Community tools often benefit from knowledgeable contributors and active user communities, but they don't come with the response commitments many MSPs expect from a commercial vendor. Those tradeoffs may not matter during routine administration, but they become much more significant when an automation fails or multiple tenants are affected by the same issue.
MSP owners aren't just evaluating features. They're evaluating how much work surrounds those features, who performs it, and whether that effort still makes sense as the practice grows.
Policy drift usually starts with a reasonable exception
Most policy drift begins with a perfectly reasonable decision. A Conditional Access policy blocks an executive while traveling. An application won't authenticate under the current baseline. A newly onboarded client has legacy settings that can't be changed on day one.
After the immediate problem is resolved, the exception often remains. Six months later, the original engineer may have left, the application may have been replaced, and nobody is completely sure why the exclusion exists—or whether removing it will create another support call.
Repeat that pattern across enough tenants, and the baseline starts to lose its meaning. What was once a standard configuration becomes a mix of permanent exceptions, inherited settings, and temporary decisions that were never revisited. Drift detection can flag those differences, but someone still needs to understand why an exception exists, whether it still serves a purpose, and who owns the decision. Without that context, another report simply becomes another task for engineers to acknowledge before moving on.
Most MSPs don't move directly from manual tenant reviews to automated governance across every client. The transition happens in stages as the existing process creates too much friction.
How governance evolves as MSPs grow
Most MSPs don't move directly from manual tenant reviews to automated governance across every client. As the client base grows, governance typically evolves in stages as the existing process creates too much friction.
Stage 1: Engineer-led governance
Early on, Microsoft 365 management runs on experience more than process. Engineers know which settings matter because they configured them themselves. They remember which clients have unusual requirements, reviews happen through a mix of admin portals, scripts, documentation, and institutional knowledge, and the people making changes are usually the same people who made the original decisions.
The challenge begins when knowledge collects around a handful of engineers. If one person understands every policy exception, the MSP inherits configurations without the history behind them whenever that engineer is unavailable or leaves the company. Staying in stage 1 for too long means relying on memory to support an environment that's becoming harder to remember.
Stage 2: Standardized governance
Standardization begins when policy baselines, administrative access, and review processes become consistent across tenants. Client-specific requirements still exist, but they become deliberate exceptions instead of habits that developed over time.
That's also when years of accumulated drift begin to surface. One tenant never adopted the latest baseline. Another still carries legacy settings from an acquisition. Documentation says one thing while the live environment says another. Once expectations are documented, governance becomes something the entire team can manage consistently.
Stage 3: Continuous governance
By this point, governance is woven into everyday Microsoft 365 administration. Engineers already know when a tenant has drifted from the baseline; exceptions include enough context to review later, and reporting reflects the current environment without someone assembling data by hand.
Automation supports that process by handling routine changes the MSP has already determined are safe while preserving the evidence needed for audits and internal reviews. It makes an established process easier to execute at scale—it doesn't create consistency on its own.
Compliance raises the standard from managing to proving
An auditor may ask who approved a policy exception. A client may want to know how administrative access is reviewed or why one tenant differs from the standard baseline. A screenshot of the current configuration answers very few of those questions. It shows where the tenant is today, not how it got there.
Compliance changes the conversation. Completing the work matters, but so does preserving the record behind it. Someone reviewing the environment six months later should be able to understand what changed, who approved it, and whether the exception still makes sense—without piecing the story together from emails, PSA tickets, and old meeting notes.
As the client list grows, maintaining that history becomes harder. Manual processes may work for a handful of customers, but they're difficult to sustain when every policy review, audit request, or customer questionnaire depends on engineers tracking down historical context.
For MSPs serving regulated industries, governance supports more than day-to-day administration. It gives teams a practical way to answer compliance questions without treating every audit or review as a new investigation.
How MSP owners should evaluate governance tooling
Feature comparisons have their place, but they rarely answer the questions that matter most. Before comparing capabilities, MSPs should understand how they expect governance to work. How is a standard policy defined? What happens when a client needs an exception? If someone questions a setting six months later, can the team explain why it's there without digging through old tickets?
Those answers often reveal more than a feature matrix. Two platforms may both detect configuration drift yet leave very different amounts of work behind. One flags the change and leaves the rest to the engineer. Another carries that work through documentation, approvals, or existing operational systems. Similar capabilities can produce very different operational experiences.
Support belongs in the evaluation as well. Community projects and commercial platforms solve different problems, and the right choice depends on how the MSP operates. A smaller provider may prioritize flexibility, while an MSP managing hundreds of tenants or serving regulated clients may place greater value on formal support and operational consistency.
Free is a starting point, not the evaluation framework
"CIPP is free" will continue to be part of the conversation, and for many MSPs, it's a perfectly reasonable place to start. Community tools provide real value, particularly for providers building their first centralized approach to Microsoft 365 management.
The calculation changes as governance becomes part of day-to-day operations instead of an occasional administrative task. Keeping policies aligned across dozens of tenants, documenting exceptions, supporting compliance reviews, and onboarding new engineers all require time that never appears on a software invoice.
Every MSP reaches that point on a different timeline. Some will decide the manual work still makes sense. Others will conclude that consistency, audit history, and operational efficiency are worth the investment.
Whatever the decision, it should reflect the entire workflow—not just the licensing cost.
If you're evaluating how to bring greater consistency to Microsoft 365 governance across your client base, learn more about Nerdio and its approach to modern MSP operations.
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