BDR: Hot, Hype And 15 Questions MSPs Must Ask
When we first launched MSPmentor, the managed services industry focused mainly on two acronyms: PSA (professional services automation) and RMM (remote monitoring and management). More recently, everyone seems to be jumping on the BDR (backup and disaster recovery) bandwagon. To be sure, BDR opportunities await many MSPs. Just be careful of all the hype. Sometimes it’s difficult to separate fact from fiction.
Generally speaking, I receive at least three to five BDR-related announcements per week. Many involve reputable services. But sometimes it’s difficult for me to pinpoint questionable claims since MSPmentor doesn’t actually test or run the BDR offerings.
Ask Plenty of BDR Questions
Still, there are some basic questions MSPs can ask their potential vendors partners as they size up their BDR strategies. Here are 15 of them:
1. When did your BDR solution first launch and what’s the installed base in my country? (Installed base involving customers, amount of data stored, partners, etc.).
2. How has the BDR offering been refreshed/upgraded since launch?
3. Do I have to pay up front for any of the BDR components? How are the components priced? And what are the long-term contractual obligations, if any?
4. What is the technology architecture?
- What components live on-premise?
- What components live in the cloud?
- Is there a pure cloud approach?
- Which components were developed in-house and which components were developed by third-party vendors?
You’ll find that some BDR vendors develop their entire solution; others integrate third-party products into a solution. I’m not suggesting one approach is better than another. But I am suggesting you should be familiar with all of the solution components to make sure you’re comfortable with the architecture.
5. How is your company funded and how has the company performed financially?
- Is it self-funded (boot-strapped)?
- Is it venture funded? If so, at what point might you need to raise more money?
- Private-equity funded?
- Profitable quarterly net income?
- Positive cash flow?
- Privately held or publicly held?
Here again, I’m not suggesting one model is better than another. Some companies pursue venture capital to accelerate growth. Nearly all the big IT companies that launched IPOs were once venture-backed. Other companies prefer the self-funding route. Many companies perform well over the long haul by remaining private and retaining complete control. An example outside of the MSP market would be SAS Institute, the business intelligence company. Either way, at least ask some questions about company finances to see if you’re comfortable with the business’s standing.
6. What is your direct vs. indirect channel strategy?
- How is your sales team compensated? Are they compensated equally whether a deal is sold direct or indirect?
- Whom is your channel chief and how long has he or she driven channel sales?
- What percentage of your revenues come from the channel today? How has that changed in the past two years? How will it change in the next two years?
7. What third-party cloud, if any, does the BDR solution leverage and what is the associated SLA?
8. How does your BDR service integrate with my other software platforms (PSA, RMM, etc.)?
9. Do you have five channel partners whom I could contact as references for your service? Are those channel partners compensated or in any way rewarded for being a reference?
10. Can I control branding, pricing, profit margins and end-customer billing for the service? (Side note: some MSPs prefer to leverage a cloud service provider’s brand. Other MSPs prefer to leverage their own brand. To each his own. Just be sure you know your options.)
11. What end-user platforms, devices, operating systems, and virtualization/hypervisors do you support?
12. How is the BDR system managed?
13. How many of your BDR partners are in my city or region, and how do you expect that to change of the next six to 18 months?
14. Are you working with distributors? Which ones and why?
15. If I choose to move my customer data off your system and onto an alternative BDR platform, what’s the process and how long does it take?
16. What questions did I miss? Surely there are a boatload of them.
Overall, there are a lot of things to love about the BDR market. It’s growing. There are multiple solutions from which to choose. All customers need storage and they also need to keep their data accessible. And many of the BDR vendors are fiercely loyal to the channel.
But as one MSP executive told me last week, the BDR market has also attracted some pretenders — relative novices that are trying to cash in while the going is good. Ask plenty of questions. Hope for the best but always prepare for the worst by closing your BDR evaluation with question 15.