How to Offer Backup as an MSP

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Many MSPs offer cloud backup services. A few of them make moderate to high profits by cost-effectively offering high-value services and re-signing clients year after year. But many more MSPs offer backup services as an inexpensive commodity, only to reap razor-thin margins.

Predictably, competition in this rank of MSP is primarily on price. Customers expect one thing and one thing only: reliable backup for cheap. Yet cheap backup may not be reliable and it is likely not scalable. The customer is disappointed and moves on to the next cheap offering.

There is no getting around price sensitivity in the managed backup market. Even large, well-funded companies will feel the pinch of massive outsourced backup; mid-sized businesses and SMB certainly will. Yet when MSPs offer backup to their customers, they should not categorize themselves as a commodity seller. Instead they offer value: expertise, a service that allows customers to spend precious resources on their business, a high-value technology. Customers will know it too – and pay for it – if the MSP sells advanced technology and services at a reasonable price. Then the MSP becomes a valuable partner instead of a costly irritant.

Profiting with Cloud Backup Services

How do MSPs get there? By educating their customers on the value of cloud backup, and by partnering with a backup product vendor who offers high value backup services at a reasonable cost.

Customer education starts by highlighting their pain points. Customers know what they don’t like but they may not know they can do anything about it, or may not realize that solving the pain points can be a simple and cost-effective process.

Three of the biggest pain points for any cloud backup user are: 1) slow backup and recovery speeds, 2) uncertain security, and 3) poor technical support. When their service provider can cost-effectively solve these paint points for them, the MSP has a very attractive marketing message and the ability to charge more for the value they offer.

  • Performance. Cloud backup and recovery speeds worsen with more frequent backup, larger datasets, and insufficient bandwidth. Look for a backup provider who will accelerate the WAN for more bandwidth without an expensive investment. Also look for products that can achieve continuous or near-continuous backup without straining system resources, and that allow for high performance backup with large datasets.
  • Security. Mid-sized and smaller businesses have not always had to prove compliance. But customer data security is becoming more important in every size of business, and legal consequences are becoming much stricter. MSP customers need to have audits and reports that verify security and backup success. This means that MSPs should look for a backup product partner who provides encryption for data-in-transit and data-at-rest, and that verifies successful backups and data integrity.
  • Technical support. Technology customers in all segments cite fast and expert technical support as a top competitive differentiator. They expect that basic support is part of their service package, and they will not appreciate poor Tier 1 support followed by a guaranteed bump to a paid support tier. Yet the MSP needs to turn a profit, so how to keep internal costs low while providing strong basic support? Partner with a cloud backup vendor who includes 24×7 expert support as part of a very reasonable price package.
  • Read more on MSPs and profitable backup services.