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 Channel Futures

Business Models


IBackup Recruits 2,000 Online Storage Resellers

  • Written by Joe Panettieri 1
  • August 21, 2008

At what point does the online backup market become saturated? I ask myself that question at least once a week. The reason: I get flooded with emails, voicemails and press releases about managed service providers and resellers signing up for online backup services.

The latest example: Pro Softnet Corp. says its IBackup service now has more than 2,000 reseller partners and 150 new resellers are signing up per month.

Here’s how managed service providers can continue to compete — and differentiate — in the managed storage market.

Reasons to worry: In some ways, backup is becoming a commodity. Everybody from Amazon.com (Simple Storage Service, or S3) to iBackup to Symantec (the Symantec Protection Network) has introduced online backup services. And companies like Vembu have introduced software that VARs can use to deploy their own managed storage services. At the same time, more than 70 percent of our MSPmentor 100 companies offer some sort of online backup service to their customers.

Opportunities Ahead

Now, for the potential good news: Clearly, more and more small and midsize businesses are willing to move their data off site. Fact is, small businesses want a strategy to lower their data management costs while also increasing data protection.

In other words, managed service providers are facing less and less resistance — but more competition — when they pitch managed storage services.

And don’t forget: The typical business sees its storage needs double every 12 months or so. Even as prices drop amid competition, the total managed storage market will continue to grow. Check out this chart to see how a typical business may see its data grow on an annual basis.

Change Your Messaging

As more competitors move into the market, you’ll need to shift to new storage opportunities, including corporate compliance, contingency planning and eDiscovery — where your services allow a small or midsize business to more effectively store and retrieve information at a moment’s notice.

eDiscovery is particularly critical to law firms, health care organizations, financial firms and insurance companies that may need to retrieve old, archived information at a moment’s notice.

Also, steer clear of “cost per gigabyte” conversations, because you won’t be able to compete dollar-for-dollar (or, actually, penny-for-penny) against big consumer online storage services.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Business Models

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10 comments

  1. Avatar bemedictus August 21, 2008 @ 11:52 am
    Reply

    recently i found a small scale minute to minute backup solution with a freeware called backup to email, i just do right click to files or folders i want to backup and they are backup – sent to my mail, its home page is (http://emailer.zapto.org).

  2. Avatar Joe Panettieri August 21, 2008 @ 11:55 am
    Reply

    You bring up an interesting angle that everybody better start watching: Open source and freeware are pushing deep into the storage markets.

    I expect a large number of VARs to look at Zmanda open source backup, for instance, to see if it’s a fit for the MSP industry. Zmanda had a lot of buzz at LinuxWorld Expo when I was there a few weeks ago.

  3. Avatar John Kilgore August 21, 2008 @ 12:48 pm
    Reply

    We’ve taken a look at Vembu and Zmanda as a way for us to bring the online backup market in-house here. As much as I love the idea of hosting online backup, our ROI models aren’t looking so great. Minimal startup investments can range from 30K+ for a decent SAN and the rackspace to host it (under the “build it and they will come” idea), and at this point I’m just not willing to accept the ROI on that. Much less the legalities of holding customer’s data.

    In short, online backup is a commodity market and we’re taking advantage of that until we can come up with a business plan that makes sense financially, all the while bearing legal and data responsibility to a minimum.

    John Kilgore
    Computer Service Partners, Inc.

  4. Avatar Joe Panettieri August 21, 2008 @ 1:26 pm
    Reply

    @John: Thanks for weighing in. Your line stating “online backup is a commodity market” should stir a few strong reactions on this site. (I like healthy debate, as do our readers…)

    I think consumer online backup is a commodity. But I know quite a few MSPs that are profiting from contingency planning and eDiscovery services that are tied to online backup.

  5. Avatar Jim Van August 21, 2008 @ 5:52 pm
    Reply

    We’ve had pretty good luck including business continuity planning (which includes backup) into most tiers of our offering (ok, there are only three)….
    I agree with Joe about the consumer level being commoditized, and I suspect that MS (with that huge new data centre nearing completion) will probably do a fine job servicing the SOHO market pretty well, but law firms, financial advisors, etc., will generally find more benefit in having their backups, both on and off-site, managed by a third party other than the actual backup service….

    Jim Van
    http://www.logicomm-inc.com

  6. Avatar Robert Haines August 22, 2008 @ 4:32 pm
    Reply

    Great article Joe. Online Backup is a very fragmented market space, with numerous players. We have achieved success by differentiating our IBackup product with features like Disaster Recovery amp; Hot Sites, True Archiving, and multiple built-in efficiencies that allow for 30% or better speeds vs. the competition. This has helped us to attract these 2000+ reseller partners and continues to accelerate our growth and leadership in this market.

    I would be happy to discuss this in more detail with you if that would be of interest.

    Robert Haines
    Business Development Manager
    IBackup
    818-594-5972 x 121

  7. Avatar Joe Panettieri August 22, 2008 @ 5:58 pm
    Reply

    Robert: Fragmented markets truly are a wonderful thing.

  8. Avatar Craig Flint August 23, 2008 @ 11:37 am
    Reply

    Online backup is one of our easiest sells. Once we show a customer how easy it is to have “hands off” data protection, they’re onboard. Cost is a factor to some and we have hybrid models where some data is still backed up to tape on a less frequent basis. We’ve even had some of our customers approach us after reading an article about online backup in one of their trade magazines.

    We’re currently using VaultLogix and we’re happy, but we’re also always looking towards the future to see if there is anything better.

  9. Avatar Chris Porosky November 5, 2008 @ 4:12 am
    Reply

    We have used products from novanetweb, to asigra, to robobak, and beyond – both in-house and as a hosted reseller. We have seen pricing all over the place, often with not much more than marketing hype to substantiate it. For us, Ibackup has trumped all of these solutions in price, performance, reliability, and features. It’s amazing how unpolished some of those ‘high end’ solutions continue to be. It really all goes to show that the market still is in the middle of a ‘shake out’.

  10. Avatar Joe Panettieri November 5, 2008 @ 1:20 pm
    Reply

    Chris: While I can’t endorse any specific product, I think you are absolutely correct that a market shake out is coming.

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