Asigra Summit: Is the Pure-Play Cloud Backup Partner Disappearing?

Cloud-based backup services may be destined to become high-value, high-margin add-on services as the number of pure-play cloud channel partners slowly disappear. Those who are focused solely on cloud-based backup and recovery services are in the minority, and quickly becoming even more rare within the market.

According to Eran Farajun, executive vice president of Asigra, who spoke with media this week at Asigra Partner Summit 2014 in Toronto, noted that only about 15 percent of Asigra’s partners are solely focused on cloud backup. And it’s a shrinking group as they either disappear or are acquired by larger organizations interested in expanding their own cloud services offerings.

The pure-play channel partners aren’t quite gone yet, and it’s likely many of them will evolve either through business changes or acquisition, but currently, Asigra’s channel partners are increasingly falling into of two other categories of cloud services providers. Either they are leading complementary or trailing complementary, which basically means they’re either leading their sales efforts with new customers by enticing them with cheap cloud backup services or are bringing them in with other services and then aiming to add on high-margin cloud backup services afterwards.

The dominant model, though, is the trailing complementary model. Of Asigra’s partners, more than 70 percent of partners fit into that category, Farajun said. They attract customers through lower-cost, lower-margin cloud services before offering their customers premium cloud backup and recovery services.

It appears to be a good strategy for Asigra, which is interested in helping cloud services providers reduce their overall costs for providing backup services while also being focused on recovery.

Based on discussions with partners at Asigra Partner Summit, cloud-based backup and recovery is quickly becoming a larger portion of their overall business. Pure-play backup partners were still evident within the attendee list, but if Farajun is correct, many of those will soon disappear, likely to be gobbled up by larger players interested in expanding their cloud services portfolios.

The impression is that Asigra is working with partners to make cloud backup a high-margin, high-value service that is sold after customers already are hooked on the cloud through other offerings. Not a bad strategy, but how it will roll out through the company’s partner community is so far unknown.