Penetration Testing: Outside-In vs Inside-Out (Which One Does Your Business Actually Need?)

Outside-in or inside-out? Learn how each penetration testing approach works, when to use them, and which one your business actually needs to stay secure.

Introduction
The Two Main Penetration Testing Approaches
What is Outside-In Penetration Testing?
What is Inside-Out Penetration Testing?
When to Choose Outside-In Testing
When to Choose Inside-Out Testing
Most Businesses Need Both (Just Not at the Same Time)
Don’t Forget Third-Party Dependencies
So Which Penetration Testing Method Do You Actually Need?
Final Thoughts on Choosing Your Penetration Testing Strategy

Introduction

If you’re planning a penetration test and feeling a bit lost about where to start, you’re in good company.

Some businesses come to us with laser focus on a specific concern. Others sit down and admit they haven’t got a clue where to begin. Both reactions are completely normal. The trouble is, most online guides make pen testing sound like a simple tick-box exercise when actually there are two completely different ways to approach it, and picking the wrong one can waste both time and money.

Let’s clear this up properly.

The Two Main Penetration Testing Approaches

There are two strategic ways to begin a pen test:

Outside-in testing starts from an external attacker’s perspective, looking at what’s visible from the internet.

Inside-out testing starts with your most critical systems and data, the stuff that would genuinely hurt if compromised.

Both find vulnerabilities. Neither is universally “better”. The real question is which one actually makes sense for your business right now.

What is Outside-In Penetration Testing?

Outside-in testing does exactly what it says on the tin. A tester starts from your public-facing environment: websites, login portals, cloud apps, exposed services, anything someone could poke at from the internet.

This approach answers:

What can an attacker see without any credentials?
What could they exploit from outside your network?
Are your internet-facing assets leaking information or exposing weaknesses?
Could someone gain a foothold to move deeper inside?

For most service businesses (accountancies, legal firms, architects, agencies, consultancies), this is usually the sensible starting point. Why? Because you don’t sell digital products. Your risk typically begins with publicly accessible systems and staff endpoints. Most attacks against these types of firms start with exposed services, phishing emails, compromised passwords, or badly configured cloud setups.

Bottom line: If your biggest risks come from the outside world, start there.

What is Inside-Out Penetration Testing?

Inside-out testing flips the model completely. Instead of asking “what can an attacker see?”, we ask “what happens if someone’s already inside?”

This approach focuses on your highest-value assets:

Your proprietary software or SaaS platform
Critical internal systems
Sensitive databases
Payment processing infrastructure
The backend of your flagship product
Anything that would cause serious financial or operational damage if breached

This is the right starting point for organisations that sell technology: SaaS platforms, digital tools, specialist software, industry-specific systems, client portals, anything where security isn’t just important, it’s the foundation of what you sell.

To be blunt, if your product isn’t secure, you’re in serious trouble. Reputation, contracts, compliance, customer trust, all of it depends on your product’s security. So inside-out testing makes far more sense.

When to Choose Outside-In Testing

Start with outside-in if:

You’re a professional services firm
You don’t sell a digital product
Most of your systems are cloud-based
Staff endpoints are your biggest exposure
You rely heavily on third-party tools
You’ve never done a pen test before

This gives you immediate clarity on your public attack surface, the place where real-world attackers actually start.

When to Choose Inside-Out Testing

Go for inside-out if:

You sell a software product
Your platform stores or processes client data
You have a customer-facing portal or digital tool
A compromise would directly impact your customers
You need to prove security posture to investors or enterprise clients
Your revenue depends on your product’s security

If your business model hinges on your product being secure, that’s where the test should begin.

Most Businesses Need Both (Just Not at the Same Time)

Here’s the reality: outside-in and inside-out testing complement each other, but you don’t need to do both at once unless you have specific regulatory requirements.

A smarter approach, particularly for SMEs, is to build a multi-year testing strategy:

Year 1: Start with your highest-priority approach
Year 2: Test the opposite direction
Year 3: Expand scope or go deeper based on previous findings

This avoids what we call the Pen Test Trap (doing the same test every year and learning nothing new) and ensures you’re covering far more ground without doubling your budget.

Don’t Forget Third-Party Dependencies

One of the biggest risks most organisations overlook: you can’t always test the systems you rely on.

If your website uses third-party payment gateways, chat widgets, booking tools or industry-specific software, those elements are often out of scope unless the vendor explicitly permits testing.

This means a supplier’s weaknesses can easily become your weaknesses. You might think something’s been tested when it hasn’t. Larger cloud providers like AWS, Azure and GCP publish clear testing permissions. Many other vendors don’t, which is a problem.

If a supplier holds systems or data that could impact your business if hacked, they should be able to prove they’re testing it properly, or you should reconsider that relationship.

So Which Penetration Testing Method Do You Actually Need?

Here’s the simplest way to think about it:

If your business runs online, start outside-in.

If your business is software, start inside-out.

Still unsure? Use this quick decision guide:

Start Outside-In If:

Your biggest exposure is the public internet
Your team uses lots of SaaS tools
Your industry doesn’t revolve around custom software
You need to understand your attack surface
You want to find entry points

Start Inside-Out If:

Your product is your business
You handle sensitive or regulated data
Clients ask about your security posture
A breach would create direct customer impact
You’ve already done outside-in testing recently

And if both feel relevant? Get in touch and we’ll help you work out which one reduces the most risk fastest.

Final Thoughts on Choosing Your Penetration Testing Strategy

Penetration testing isn’t about ticking a compliance box. It’s about reducing the risk of a real-world attack. Choosing the right starting direction (inside-out or outside-in) is one of the biggest factors in whether your test actually protects you or simply gives you a PDF to file away.

The right test, in the right direction, at the right time will always deliver better security outcomes than blindly repeating last year’s scope.

If you need help figuring out where to begin, we can walk you through the decision based on your business model, systems, risk exposure, customer expectations and roadmap for the next 12 to 24 months.