Penetration testing helps people understand how real-world attacks could impact your organisation. While vulnerability scanning highlights potential weaknesses, penetration testing goes further by actively attempting to exploit them in controlled conditions.
Two of the most common approaches are internal and external penetration testing. Each test presents different threat scenarios and answers different questions for security leaders. Understanding the distinction helps organisations plan testing that reflects how modern breaches occur.
This article explains how internal and external penetration testing differ, when each is appropriate, and how they fit into a strong cyber security program for Australian businesses.
What is penetration testing?
Penetration testing simulates real attack techniques to identify security weaknesses that could lead to unauthorised access, data exposure, or system compromise. Testing is conducted by skilled security professionals and scoped carefully to minimise operational risk.
According to the Australian Signals Directorate, penetration testing is one of several activities used to support continuous monitoring and vulnerability management within an organisation’s security framework. It complements vulnerability scans and architecture reviews by demonstrating how weaknesses can be chained together in practice.
Penetration tests typically result in a security assessment report outlining findings, risks, and recommended remediation actions, which can then inform ongoing security planning and documentation.
What is external penetration testing?
External penetration testing focuses on assets that are accessible from outside your organisation. This simulates how a threat actor with no internal access might attempt to breach your environment.
Testing targets:
- Public-facing websites and applications
- Internet-exposed servers and cloud services
- Remote access solutions such as VPNs
- Email and perimeter security controls
- Domain and network configuration visible from the internet
The goal is to identify weaknesses that could allow an attacker to gain an initial foothold. This includes misconfigurations, unpatched systems, weak authentication controls, or exposed services that should not be public.
External testing reflects a common starting point for cyber attacks. Many incidents begin with internet-facing weaknesses that provide access into an organisation before further movement occurs internally.
What is internal penetration testing?
Internal penetration testing assumes an attacker already has some level of access inside the network. This could reflect a compromised user account, a successful phishing attack, or a malicious insider.
Internal tests assess:
- Network segmentation and lateral movement controls
- Privilege escalation paths
- Access to sensitive systems and data
- Identity and access management controls
- Security monitoring and logging effectiveness
This type of testing helps organisations understand what an attacker could achieve after bypassing the perimeter. It often reveals risks that perimeter-focused testing alone will not uncover.
Internal penetration testing is particularly relevant for environments with complex networks, legacy systems, or high-value data.
Both approaches answer different risk questions. External testing asks how an attacker could get in. Internal testing asks what happens once they do.
Get support with an incident response and a free assessment.
Which type of testing does your organisation need?
The right approach depends on your environment, risk profile, and maturity. External penetration testing is prioritised when:
- New systems or applications are exposed to the internet
- Cloud services or remote access solutions are introduced
- Regulatory or contractual obligations require external testing
- There is limited visibility into internet-facing risks
Internal penetration testing is often appropriate when:
- The organisation holds sensitive or regulated data
- Network complexity has grown over time
- Identity and access controls have evolved unevenly
- There is concern about insider risk or phishing exposure
Many organisations benefit most from using both approaches as part of a planned testing cycle. Conducting one without the other can leave blind spots that attackers are likely to exploit.
How penetration testing supports Australian cyber security guidance
Australian cyber security guidance emphasises regular security assessment activities conducted by skilled and independent personnel.
The Australian Signals Directorate’s Information Security Manual identifies penetration testing as a key component of continuous monitoring. It recommends testing systems prior to deployment, after significant changes, and at least annually thereafter, depending on risk and system criticality.
Penetration testing outputs also support the required security documentation, including the security assessment
reports and plans of action and milestones. These artefacts help organisations track remediation efforts and demonstrate due diligence to regulators, auditors, and stakeholders.
Organisations working towards alignment with frameworks such as the Essential Eight often use penetration testing to validate the effectiveness of controls beyond policy statements and configuration reviews.
Common misconceptions about internal and external testing
Several assumptions can limit the value organisations get from testing. One common belief is that external testing alone provides sufficient coverage. While perimeter testing is essential, it does not reflect the impact of credential theft, misuse of access or internal weaknesses.
Another misconception is that internal testing is only relevant after a breach. In practice, proactive internal testing helps identify weaknesses before they are exploited, particularly in identity management and network segmentation.
There is also a tendency to view penetration testing as a one-off activity. Threat environments change continually. Testing should be revisited as systems, users and attack techniques evolve.
Integrating penetration testing into a broader security program
Penetration testing is most effective when integrated into an ongoing security process rather than treated as a standalone exercise.
This includes:
- Using test results to prioritise remediation based on risk
- Updating security documentation and controls accordingly
- Retesting to validate that fixes are effective
- Aligning testing schedules with system changes and deployments
When combined with vulnerability scanning, security monitoring and incident response planning, penetration testing provides practical insight into how well controls perform under realistic conditions.
Learn more by reading our case studies or our blog: The Average Pen Test Cost & Why It Matters for Your Budget.
Require Cyber Security Consulting? Talk to Us!
Effective penetration testing relies on clear scoping, defined objectives and transparent reporting. Tests should reflect realistic attacker behaviour while remaining controlled and authorised. If you need support, there are many reasons to trust XCELIT with penetration testing.
- CREST-certified engineers with real-world offensive security experience
- 80% manual, 20% automated testing for accurate, actionable results
- Realistic attack simulations that reflect how cybercriminals operate
- Clear remediation guidance to strengthen your security posture
- Scalable, business-aligned cyber security services with 24/7 support
From cyber security consulting to managed cyber security services, we keep you safe around the clock. Test your cyber resilience and contact XCELIT to uncover vulnerabilities, strengthen your defences and protect what matters most. Call:
- 646 860 0486
- 0808 501 4124
- 1800 923 548
XCELIT was founded in 2021 as HackNo Cyber Security, a Managed Security Service Provider (MSSP) focused on making enterprise-grade cybersecurity accessible to businesses at practical, affordable rates.
