Cloud BDR: Easier Sell Than RMM (But They Still Go Hand In Hand)

Cloud BDR: Easier Sell Than RMM (But They Still Go Hand In Hand)

Don't misread the headline: MSPs still need to offer both remote monitoring and management (RMM) as well as backup and disaster recovery (BDR). But if you check recent market statistics one thing is clear: MSPs are discovering cloud-oriented BDR is an easier sell than proactive RMM for servers, PCs and mobile devices. Here's the anecdotal evidence.

Poke around the BDR and cloud storage markets, and you'll find MSP-friendly companies like Axcient, Datto and Intronis generating double- or triple-digital growth rates. The growth rates are staggering. All three of those companies were on the recent Inc. 5000 list of fastest-growing privately held companies in the United States. (Axcient provided more insights here; and Datto provided more color commentary here.)

Hidden Numbers and Educated Guesses

In terms of annual revenues, I suspect Axcient and Datto each will be larger than most (but not all) of the major RMM providers this year, while Intronis will pull even or surpass many RMM providers in terms of company size and headcount.

Why is that? There are a few reasons:
  1. RMM-oriented sales typically involve (A) up-front investments from MSPs (B) and lots of education from the MSP to the end-customer. You've got to sell end-customers on the value of pro-active IT management, delivered remotely. This has been a healthy, growing market for more than a decade but only a handful of technology companies in and around this market (SolarWinds, LogMeIn, Nimsoft) have had successful exits and/or IPOs.
  2. BDR and cloud storage generates immediate revenue for MSPs. End-customers are asking about information protection services, and they're also asking about cloud computing. The cloud chatter comes from both the consumer market (iCloud) and the business market (Amazon, Google Apps Microsoft Office 365, Salesforce.com, etc.). This market is in fast-growth mode but there will be a shakeout because I believe there are too many BDR companies chasing too few MSPs.

One-two Punch

I also believe MSPs that have successful RMM practices are more inclined to succeed with BDR. That's because smart MSPs are using RMM to:
  1. Discover customers' infrastructure;
  2. Establish baseline IT requirements for customers -- such as standardized approaches to operating systems, software suites, hardware components and more;
  3. Pinpoint areas where customers need potential upgrades or enhancements. Here, RMM is typically opening the door to more BDR and storage engagements.
Zenith Infotech was one of the first companies to closely link RMM, BDR and NOC (network operations center) capabilities for MSPs. (Zenith's RMM business has since been sold to Continuum.)

Now, we're seeing larger storage companies (Symantec and CA Technologies come to mind) plug into RMM platforms. So while RMM can be a difficult sell for MSPs, it's still the springboard that frequently leads to BDR revenues.
TAGS: Technology RMM
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