A common belief throughout the IT industry is that public cloud is cheaper. While this is true in some cases, oftentimes the trade-off for a lower upfront price point is spotty customer service, limited features and availability, and lower security thresholds. Where consumers are concerned, these may not be deal-breakers, but businesses need the capabilities, performance and IT security only private cloud
For example, some of the key business benefits afforded by private cloud are the “always on” IT security updates and the ability to reallocate resources quickly as the needs of the business evolve. Furthermore, for businesses, switching to private cloud can save time and money because it is less of a hassle and more cost-effective than purchasing or hosting servers and infrastructure equipment.
The benefits of cloud services are opening up opportunities for MSPs and solution providers to expand their businesses and create new revenue streams when they sell and support private cloud solutions as part of their overall service offerings. Earlier this month, the MSPAlliance put a stake in the ground with its 2015 Managed Services Predictions, stating that “the real money is still in private cloud,” and that “2015 could change everything related to private cloud.”
Recent studies point to private cloud computing as the preferred choice over managed public cloud solutions. And, according to Technology Business Research’s (TBR’s) Private Cloud Customer Research Report, the vendor opportunity in the private cloud market is expected to grow from $41 billion in 2014 to $69 billion in 2018, representing a compound annual growth rate (CAGR) of 14 percent annually.
One example of how you, as an MSP or solution provider, can take advantage of this growth in private cloud is through cloud-based backup and disaster recovery (BDR). If you don’t already offer cloud-based BDR, there are several reasons why you should consider this service as part of your managed services portfolio:
- 93% of companies that lost access to their data for 10 days or more due to a disaster filed for bankruptcy within one year (National Archives & Records Administration in Washington)
- 50% of businesses that found themselves without data access for this same time period filed for bankruptcy immediately (National Archives & Records Administration in Washington)
- IT outages cost SMBs an average of $12,500 per day if their computers are down, not including its effect on their customers (Bernard Laroche, “Despite Negative Financial Impact, SMBs Are Still Not Prepared for Disasters”)
The good news for MSPs and solution providers is that the barrier for entry into the cloud backup market is low, given that you don’t need to purchase or host your own servers and other equipment. And, with the right solution in place, regardless of the size of your business or your level of expertise, you can quickly start generating recurring revenues and grow their businesses with cloud-based BDR.
Here are four straightforward steps that can help you build a successful managed services business around cloud-based BDR and capitalize on the opportunities available through private cloud:
- Understand your customers’ pain points: When you know what keeps your customers up at night, you are better equipped to communicate and demonstrate your ability to resolve their unique challenges through cloud BDR.
- Differentiate: Cloud BDR is a crowded marketplace with many players vying for the customers’ business. As such, it’s important that you market and sell in a way that demonstrates you are addressing the customers’ needs – whether it be increased security, access to data, or compliance with industry standards and regulations.
- Establish a vertical focus: When you specialize in a specific vertical market and demonstrate a solid understanding of the rules, regulations, and standards (i.e. security, privacy) that the customer must adhere to, you have an opportunity to position yourself as an expert and grow a vertically focused business.
- Price for profitability: There are several ways to price cloud BDR services, and they include per gigabyte, bundled with a managed services plan, or as a flat rate. Each has its advantages, but bundling it with a managed service offering provides for 100 percent market penetration, increases revenue and profit, and offers the most complete protection for the customers’ data.
While the debate still continues as to which is more profitable--public or private cloud--we know from experience that cloud BDR is a great way for MSPs and solution providers to grow their businesses and create recurring revenue streams. For more guidance on best practices for selling cloud-based backup and disaster recovery solutions, download The Ultimate Guide to Selling Cloud Backup today.
Rob Merklinger is vice president of sales at Intronis, Boston-based provider of world-class backup and data protection solutions for the IT channel, and is an experienced software sales leader with a proven track record for driving success and developing sales talent. Guest blogs such as this one are published monthly and are part of MSPmentor's annual platinum sponsorship.