Managed Storage Services: Branding 101
What can two former stay-at-home moms and a 38-year-old tech guru teach you about the managed storage market? Plenty. No doubt, many managed service providers are struggling to differentiate in the storage as a service market. Sometimes, all it takes is finding a niche. Such is the case at Studentbackup.com. Here’s the story.
First, a little background: Roughly 70 percent of MSPs offer some form of managed storage, according to our ongoing MSPmentor 100 survey, which ends Dec. 11. I think it’s safe to say many of those storage services are vanilla offerings that don’t stand out in a crowd.
Now, let’s look at Studentbackup.com. I learned about the managed storage service the old fashion way: By reading an article about the company in my local newspaper, Newsday. Founded by Maggie Tolkin and Amy Motschwiller, Studentbackup.com leverages the technical talents of Adam Schwam, the story’s proverbial tech guru. The service:
“provides students with a secure, fast, and affordable online system for the daily, automated, and unattended offsite backup of their critical data files.”
What a simple but compelling idea: Take a commodity service (online backup) then brand and market around a specific market niche (K-12 and college students). The result: Newsday reports that Studentbackup.com has about 50,000 customers across the U.S., generating about $1 million in sales.
Is the backup service managed by another back-end provider? Are the data centers SAS 70 Type II certified? I have no idea. But perhaps that’s the point. Studentbackup.com knows its audience and keeps its messaging simple and only talks about one brand: Studentbackup.com.
Assuming the service works as advertise, it’s a case study for how MSPs can successfully target branded niches with recurring revenue services.
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Great posting Joe! I agree, standing out from the crowd is important and being able to offer a branded Online Backup and Recovery solution is critical to being competitive. Recurring revenue is king, providing a path to profitability. Clear messaging and good content will allow MSPs to compete more effectively, taking more market share away from their competitors. When working with MSPs, I always recommend focusing on a specific target (i.e., health care, education, etc). The more focus, the better results. Differentiating with a clear value proposition, targeting, and setting up a recurring revenue stream represent a great opportunity for success.
-Eric
Eric: I have a slightly different view on focus…
The more focus, the greater the potential reward … but the greater the potential risk. If you target a highly focused market and business doesn’t material, you’re hosed. If you stay broad, you may get a few wins but often can’t scale as fast.
Ultimately, I think intense focus on a specific niche is worth the risk.
-jp
Interesting stuff, Joe.
In spite of being in this market for 4 years, I must confess I hadn’t heard about studentbackup.com
I’m curious though about how they managed to create a ‘brand’ amongst the EDU segment, and compete against the likes of Mozy amp; Carbonite (and now, Vembu Home). It can’t be pricing since they’re similarly priced. And, creating a brand in the rapidly commoditizing consumer online backup space is a hugely uphill task (the $20+ CPC rates in Adwords – for online backup – are a good barometer)
Any idea how they marketed/sold their service?
Lux: My best guess is there marketing was mostly word of mouth. The inspiration for the business came from a student who lost data while at school. The student told his mom… and his mom spotted the niche instantly and got a team together to launch the business. I suspect once the site was up the student then went viral about the launch on social networks. One student telling hundreds of FaceBook and Twitter friends about an online service he/she likes is pretty darn powerful viral marketing…