Dan Agbo 
Sergei Beliachkov, who managed security for 7,000+ users as a virtual CISO and later launched the service for external clients, explains when fractional security leadership works and when it catastrophically fails.
The cybersecurity leadership gap has never been wider. According to ISC2’s 2024 study, the global shortage reaches 4.8 million professionals, with executive positions among the hardest to fill. Meanwhile, the average CISO commands over $200,000 in base salary, with total packages often exceeding $300,000, putting security leadership out of reach for most mid-sized companies.
This collision of unaffordable talent and unavoidable compliance obligations (EU’s NIS2, DORA regulations) has catalyzed explosive growth in virtual CISO services. But the promise comes with peril: many companies discover they’ve hired expensive consultants delivering presentations instead of protection, or ‘virtual CISOs’ lacking operational experience to recognize threats before they materialize into breaches.
Sergei Beliachkov has seen both sides. As virtual CISO for Rostelecom-Solar, he managed security for a government client with 7,000+ users and 500+ servers. Later, leveraging experience from 80+ audits across Gazprom’s subsidiaries, he built his own virtual CISO offering, generating over $400,000 within six months from 10+ contracts. His expertise spanning operational delivery and service architecture — backed by ISC2 (CISSP) and ISACA certifications — provides rare insight into what makes fractional security leadership work or fail catastrophically.
In this analysis, Beliachkov breaks down the economics, engagement models, red flags, and critical scenarios where fractional security isn’t just inadequate — it’s dangerous.
The Economics and Operational Reality of Virtual CISO Services
The financial case for virtual CISO services extends beyond salary arbitrage. A full-time CISO at a mid-sized organization costs $180,000 to $250,000 in base salary, plus benefits, adding 25-35%, recruitment fees reaching 20-30% of first-year compensation, and supporting infrastructure. Total annual cost frequently exceeds $300,000 before accounting for the security team that the executive requires. Virtual CISO services typically charge $8,000 to $25,000 monthly through retainer arrangements with fixed hours, project-based contracts for specific deliverables like compliance certification, or incident-driven engagements that scale based on security events.
“Companies focus on the salary arbitrage, but the real savings come from eliminating redundancy,” Beliachkov explains. “When I managed security for a government client with over 7,000 users and 500 servers as a virtual CISO, they weren’t paying for my desk, benefits, vacation time, or recruiting costs. They paid for strategic leadership and operational oversight—not for someone to fill a chair during business hours when no security decisions needed making.”
When he structured that engagement at Rostelecom-Solar, it combined monthly retainers for strategic planning and compliance oversight, project components for security architecture reviews, and incident response frameworks for surge capacity during security events. This hybrid approach delivered consistent leadership while maintaining flexibility without contract renegotiations.
A virtual CISO operates at the strategic and governance layer—establishing security strategy, managing risk portfolios, ensuring compliance, overseeing vendors, and reporting to executives—which differs fundamentally from security consulting that delivers point-in-time assessments without ongoing accountability, and from managed security services that provide operational functions like monitoring and incident response without strategic oversight.
“The most common mistake is companies expecting their virtual CISO to configure firewalls or investigate security alerts,” Beliachkov notes. “That’s security operations, not security leadership. A virtual CISO directs your security team or managed service provider, not replaces them. When companies ask me to set up their SIEM or tune intrusion detection, I know they don’t understand what they’re buying. The virtual CISO defines what threats the SIEM should detect and whether the IDS investment delivers adequate risk reduction—but someone else turns the wrenches.”
This distinction proved crucial when Beliachkov optimized managed security services for one client that had accumulated multiple vendors with overlapping capabilities. Through systematic inventory and architecture redesign, he eliminated redundancy and clarified service boundaries, reducing annual costs while expanding service scope by fifty percent. Success ultimately depends on integration with internal processes—building trust with security teams, gaining credibility with business leaders, and establishing relationships with C-suite members who rely on security reporting. Virtual CISO engagements fail most often not from lack of technical expertise but from poor organizational fit, unclear authority, or resistance from internal staff who perceive the outsider as threatening their autonomy.
Risk Management and Provider Selection in Virtual CISO Engagements
Outsourcing security leadership introduces risks beyond concerns about sharing sensitive information with external parties. The most significant danger lies in misaligned incentives and a lack of business context. A virtual CISO serving multiple clients simultaneously faces inherent conflicts in attention and priority, especially during crises when several organizations require urgent decisions at the same time. Unlike a full-time executive whose career advancement depends entirely on one organization’s security status, a fractional CISO’s reputation and revenue rely on managing multiple client relationships. This can create subtle pressure to avoid difficult conversations or recommend costly investments that might strain the engagement.
The trust problem cuts deeper than typical vendor relationships because security leadership requires access to the organization’s most sensitive information, understanding of business strategy that competitors would value, and authority to make decisions that can halt revenue-generating activities during incident response. Organizations must transfer this trust to someone who will never fully embed in the company culture, who maintains parallel relationships with other clients, and who could theoretically carry knowledge of vulnerabilities or security gaps to competitors if ethical boundaries fail.
Beliachkov confronted these risks systematically when developing his risk assessment methodology for outsourced information security services across Gazprom’s subsidiary organizations. The framework, approved at the executive level for implementation across over one hundred organizations in the Gazprom group, addresses vendor conflicts of interest, knowledge transfer risks, service continuity during provider transitions, and accountability structures when security incidents occur under outsourced leadership. The methodology integrates requirements from multiple international standards while accounting for the specific complexities of critical infrastructure in the energy sector, where security failures carry consequences beyond financial loss.
RED FLAGS WHEN HIRING A VIRTUAL CISO, according to Sergei Beliachkov
Cannot articulate conflict of interest management. How do they handle situations where multiple clients face simultaneous incidents? What prevents knowledge transfer between competing clients?
Refuses to commit to defined response times. Vague promises of availability without documented SLAs indicate providers who cannot manage competing demands when crises occur.
Presents only successes without discussing failures. The best providers discuss security incidents they have witnessed, what went wrong, and lessons learned. Perfect track records suggest dishonesty or insufficient real-world experience.
Promises full-time CISO capabilities at a fractional cost. Fractional leadership has inherent limitations. Providers claiming an identical value to a full-time executive are either lying or will cut corners when pressured.
“The red flags are often subtle,” Beliachkov notes. “The best providers acknowledge that fractional security leadership has inherent limitations and will tell you explicitly when you’ve outgrown the model. Providers who promise everything a full-time CISO delivers at a fraction of the cost are either lying or incompetent—and both will get you breached.”
Clear service level agreements, incident response procedures, and escalation paths become critical risk controls when security leadership comes from outside the organization. Without these frameworks documented and tested before crises occur, organizations discover that their fractional executive lacks the context, authority, or availability to lead an effective response during actual security events. Given these risks and warning signs, what does a well-structured virtual CISO engagement actually look like in practice? Beliachkov notes the following key points:
SAMPLE VIRTUAL CISO ENGAGEMENT MODEL
Service Scope: Strategic security planning and risk management, governance and board reporting, compliance oversight, vendor management for security services, security architecture review for significant changes, and incident response leadership. Explicitly excludes operational tasks such as firewall configuration, alert triage, vulnerability scanning execution, and routine security administration.
Time Commitment: Twenty to forty monthly retainer hours for strategic work. Emergency response within two hours for critical incidents during business hours, four hours outside business hours. Surge hours available during major incidents with defined pricing beyond the monthly retainer.
Incident Authority: Documents virtual CISO’s decision-making authority during breaches, escalation paths when unavailable, integration with internal teams or managed service providers, and communication protocols with executives and legal counsel.
Knowledge Management: Security policies, architecture decisions, risk assessments, and vendor relationships are maintained in the organization’s systems. If engagement ends, the provider commits to knowledge transfer sessions and delivers all documentation in formats the organization can maintain independently.
Performance Reviews: Quarterly assessment of security roadmap progress, compliance improvements, incident response effectiveness, and stakeholder satisfaction. Sixty to ninety days’ termination notice with security continuity plan during transition.
Professional certifications provide a necessary but insufficient filter for virtual CISO evaluation. Industry-standard credentials such as CISSP, CISM, and specialized certifications demonstrate foundational knowledge, but reveal nothing about the provider’s ability to navigate organizational politics, communicate security risk to non-technical executives, or make pragmatic decisions when perfect security conflicts with business objectives. Organizations must look beyond credentials to industry-specific experience, particularly familiarity with the compliance frameworks and regulatory requirements that apply to their sector, and demonstrated success in environments similar to their organizational size and complexity.
“When we launched the virtual CISO service, we turned down more prospects than we accepted in the first six months,” Beliachkov recalls. “Organizations looking for someone to rubber-stamp their existing security theater, companies that wanted security leadership but refused to provide access to executives or allocate budget for necessary controls, prospects expecting us to operate security tools rather than provide strategic oversight—none of those were viable engagements. The fit matters enormously because security leadership without authority is just expensive advice that gets ignored.”
The onboarding process determines whether the virtual CISO engagement succeeds or fails, with the first ninety days proving particularly critical. During this period, the fractional executive must rapidly develop an understanding of the organization’s business model and risk tolerance, establish relationships with key stakeholders, build credibility with internal security staff or managed service providers, audit existing security controls and identify critical gaps, and deliver quick wins that demonstrate value while beginning longer-term strategic initiatives.
Beliachkov’s deployment of cloud security controls at Sberbank Technologies illustrates what effective onboarding enables. Within four months, he built an information security system for a cloud region based on OpenStack infrastructure, serving over two thousand servers, and organized monitoring and incident response capabilities. He established the security architecture necessary to meet contractual service level agreements while avoiding penalties. This rapid deployment succeeded because the organization provided clear authority, immediate access to technical teams and business stakeholders, and support for security decisions that occasionally delayed feature releases to address security gaps. Without that organizational commitment during the critical early months, the same technical expertise would have produced only reports and recommendations gathering dust while the infrastructure remained vulnerable.
When Fractional Leadership Fails—and What Comes Next
Virtual CISO services have clear boundaries that organizations ignore at their peril. Enterprise-scale organizations with thousands of employees, complex regulatory obligations across multiple jurisdictions, and security teams numbering dozens of professionals require full-time executive leadership that fractional engagement cannot replicate. Highly regulated industries facing constant oversight from numerous regulatory bodies—financial services navigating SEC cybersecurity rules and banking regulations, healthcare organizations managing HIPAA compliance and patient safety requirements, critical infrastructure providers subject to sector-specific mandates—need dedicated security executives with institutional knowledge and continuous availability that external providers cannot sustain across multiple clients.
Organizations emerging from major security breaches face a similar inflection point where fractional leadership becomes inadequate. The months following a significant incident require intensive stakeholder management, forensic investigation oversight, remediation program execution, regulatory cooperation, and often litigation support that demands full-time executive attention. Similarly, operations requiring actual 24/7 security decision-making authority—global organizations spanning multiple time zones with continuous operations, critical infrastructure where security decisions can impact public safety, or environments facing sustained advanced persistent threats—cannot depend on fractional executives managing competing client demands.
“The virtual CISO model works extraordinarily well for a specific segment of organizations—roughly those with fifty to five hundred employees, established security operations but lacking strategic leadership, and compliance requirements that are significant but not overwhelming,” Beliachkov observes. “Outside that range, the model starts breaking down. Either the organization is too small to afford even fractional executive costs and needs security consulting, or they’re too large and complex for fractional attention to suffice. Recognizing when you’ve outgrown the model is as important as recognizing when it fits. I’ve had conversations with prospects where I’ve told them they need to hire a full-time CISO instead, and those honest conversations often lead to better relationships later when their needs change or when they refer other organizations that do fit the virtual CISO model.”
The virtual CISO market continues expanding as the cybersecurity talent shortage persists and mid-sized organizations face mounting security pressures. Still, growth brings increased scrutiny of provider quality and service delivery. Organizations considering fractional security leadership should assess whether their size, complexity, regulatory environment, and security maturity fit the model’s strengths and limitations. They should demand demonstrated experience in their industry, verifiable references addressing how providers handled difficult situations and security incidents, clear documentation of service scope and exclusions, and explicit commitments around response times and availability during crises. Most importantly, they should evaluate cultural fit and communication style during initial conversations, recognizing that technical expertise matters far less than the ability to translate security risk into business terms that executives understand and act upon.
Beliachkov is preparing for CISM certification and developing new methodologies in information security management. He builds on his experience across government, energy, financial services, and technology sectors to create frameworks for consulting with organizations implementing security best practices. The evolution from practitioner to service provider to methodology developer reflects the maturation of virtual CISO services from improvised arrangements into a structured professional discipline—but the fundamental requirement remains unchanged. Whether full-time or fractional, security leadership succeeds only when the organization provides genuine authority, adequate resources, and executive commitment to act on security guidance even when inconvenient. Without that foundation, no engagement model delivers real protection regardless of the provider’s credentials or experience.