Managed Backup-as-a-Service

Customers with substantial amounts of data need more than just software. A trusted Managed Service Provider can differentiate themselves by offering a broader range of backup services, thus attracting customers willing to pay higher prices for more customized levels of service. When designing product offerings and pricing structures, service providers should consider offering a more sophisticated level of service for businesses with specialized requirements to deliver that added value needed to meet their needs.

Examples that add value:

1. Establish service level agreements
2. Managing customer backups and outage notifications
3. Provide personal and professional support
4. On-site support, i.e., installation/setup at the customer site
5. Offer recovery as a service

So, what can you offer your clients that will provide them with an impressive degree of personalization, compassion, and a greater sense of security?

As a provider of managed backup services, one thing you can start today is adhering to a set schedule in which client backups are reviewed.

Transparency

Customers are investing in your services to protect their critical data. Transparency creates trust and a sense of accountability. Ensure that your clients clearly understand your testing schedule and procedures to give them faith in their backup integrity and your ability to recover their data in the event of a disaster. Transparency should extend to all branches within your business from pricing structure to how you manage data. This encourages customers to stick around and may even attract some new ones.

Health Checks

Schedule regular health checks between your IT support team and the client. Consider how regular health checks can pinpoint weak spots for compliance, productivity, and backup strategy. Not only are health checks good for catching problems early and making improvements, but they also offer a unique opportunity to strengthen relationships and show the client that their investment in you has added value.

Reports

Your business should provide your clients with reports with vital information such as backup statistics and when backups have last been reviewed. This helps MSPs maintain a presence and sets client expectations for achieving RTO and RPO recoverability goals. In a disaster scenario, the customer only needs to glance at the current report to understand what data is immediately restorable.

When it comes time to renew client contracts for managed backup, the customer should feel good about it. And with services like these, they will know that their MSP has their back with an ongoing process in place that ensures backup restorability and data continuity.

When IT providers decide to start selling managed services it requires changes to their sales approach, marketing strategy, and even IT infrastructure. Whether transitioning from a different business model or starting fresh as a new MSP, numerous decisions and challenges inevitably lay ahead. You may have already hit a few roadblocks while working towards your goals, but we are here to help you avoid pitfalls moving forward. As you grow, most mistakes are simply part of a learning process, but all too often they can cause severe damage – whether financial, strategic, or reputational. Being new to managed services offers the advantage of learning from seasoned MSP veterans who have endured hardships, so you do not have to.

Weak Market Position

The importance of developing clearly defined offerings for a target audience cannot be overemphasized. New MSPs are often tempted to offer everything to everyone, which is a recipe for failure. Adding service offerings requires more complex billing, additional technologies to support, training, and establishing and juggling additional vendor relationships. The answer may be to start with a single offering like Backup-as-a-Service and grow as you are ready to take on more.

Carefully consider what services to focus on and outline them clearly in your Service Level Agreements (SLAs) to illustrate the scope of your services and set the right expectations.

Reactive vs. Proactive

Perhaps the greatest argument for MSPs is the alignment of goals with the client in preventing incidents from occurring rather than reacting to them. So, it is surprising that some MSPs get hyper-focused on the technology and tend to forget that their clients are constantly being marketed by the competition. If you are not actively highlighting how you are saving your clients from disaster and demonstrating how you save them money, your apathy is sure to be rewarded with a cancellation of services. MSPs with a BDR service should be monitoring data use and reporting back to customers, as well as testing data restores regularly for a deep understanding of recovery time following an emergency. Ongoing communication with clients is paramount to retention.

Inflexible Vendor Solutions

Plug and play sounds great, until the proprietary device required by your backup vendor fails, and you are stuck waiting for a response from support. MSPs that offer services like Backup and Disaster Recovery (BDR) may regret contracts with vendors that require the purchase of a branded hardware box/appliance or have similarly strict hardware requirements. MSPs will be held fully responsible for client data if things go south and thus must ensure that vendor solutions allow freedom of choice in hardware. MSPs require maximum control to upgrade and scale as their client demands grow and can efficiently repurpose phased-out equipment with a more flexible vendor solution.

Complex Vendor Billing

Flexibility should extend to pricing so that MSPs have a choice in how to be billed rather than being dumped into a restrictive price bucket. While many vendors' per-user billing methods seem reasonable at first, MSPs often end up paying far more than they need. With endpoint backup taking off, the purchase of per-user licenses that include a set amount of cloud storage can leave MSPs paying for terabytes of unnecessary but included cloud storage space.

Regulatory Weakness

Now more than ever it is clear that our services are no longer limited by physical location. Your potential client down the street could opt to go with an MSP on the other side of the country rather than staying with you. Furthermore, that MSP may be in a region with stricter data privacy regulations. Therefore, MSPs must operate at the highest compliance standards to remain competitive.

A Race to the Bottom

While the lowest advertised price may lure the average consumer, commercial customers often require a more sophisticated level of service. Competing with other MSPs in a “race to the bottom” in terms of price forces you into providing a low-value service, comparable to a budget airline. The experience of successful Managed Service Providers tells us that business customers seek out knowledgeable Managed Service Providers to implement IT strategies that leverage technology to grow their bottom line. This same customer group is turned off by services that are interpreted as low-value, and this is precisely the target group with the highest growth potential.

Understanding Partnerships

Just as your clients extend their capabilities through your services, so too must the MSP make strategic partnership decisions to support growth. This means taking time to review pros and cons but also putting potential partners through their paces. You cannot risk having your service throttled, or your support relegated to a low priority once the vendor agreement has been signed. The right partner can even be an extension of your technical sales team, working beside you to close new business and fill important gaps in your organization. Test out support (response time, location, quality), check their credibility with similar reference accounts, and even reach out to upper management to see how seriously they are taking this new relationship.

When looking for managed backup software, the right solution is determined not only by hardware and software, but also by the manpower required to manage IT needs and even third-party services. More importantly, it's important to understand all of the costs associated with your backup solution of choice so you don't have any unpleasant surprises when you look at your next bill.

Here are a few unexpected costs to be on the lookout for:

Cloud Storage-Bucket-Only Plans

Typically, MSPs only want to pay for the storage they need. Yet, we commonly see backup vendors aggressively pushing storage-bucket-only plans, forcing MSPs to pay for a set amount of storage per user. This can result in a significant amount of underutilized storage space, which comes at a cost. As an MSP, this model forces you to pass down this cost to your clients or risk hurting your bottom line. When IT budgets shrink, this is an inefficient use of scarce resources.

Unexpected Charges

MSPs may feel misled by their backup vendor when they experience unexpected charges. Contract requirements, per-device fees, and even unexpected data charges can be problematic. Are you paying for storage utilized pre- or post-compression? Common sense would assume cost calculation after the data has been compressed, but this is not always the case. Other similarly overlooked billing details are a common headache for MSPs. Complex vendor pricing can create billing misunderstandings and frustrations.

Requirements for Cloud Hosting and Proprietary Hardware

A backup vendor should allow the MSP to self-host their client data or use a hosting provider for their clients' offsite cloud storage based on their particular environment needs. Imagine you compare the costs of hosting client data yourself, versus having someone else host it. Or you find out later that your preferred hardware and storage methods will not work. Or worse, they require you to purchase proprietary devices that can only be serviced by the backup vendor during an emergency.

If you are unable to deploy backup services using the technologies of your choice, then meeting the demands of clients is going to prove difficult in the event of a data-loss incident. Research hardware, software, and bandwidth requirements up-front and avoid solutions that require the use of proprietary hardware. Look for hardware-agnostic solutions for maximum flexibility.

Upcharges for Additional Features

You expect to have the features you need when a client needs them. However, many backup vendors charge additional fees for agents to protect SQL databases, business applications, virtual machines, and even for unlocking different types of backup storage. How can anyone anticipate the budget requirements until an emergency is at hand? Disaster recovery, bare metal restores, and local backup must be a standard part of your backup solution package.

Lack of Specialization

Many MSPs who opt for a backup solution as part of a larger security suite, eventually realize that important backup features have been implemented as more of an afterthought. When pressing their vendor for a development roadmap, they find that resources are focused on offerings other than data protection. The market contains a few security behemoths that claim to “do it all” but this does not necessarily assure a specialization in all things backup.

Deployment Support and Response Times

Estimating the time, effort, and resources required to properly deploy and maintain a new backup solution can be a challenge. Often support assistance is meticulous in the trial phase but becomes more elusive after the contract is signed. In an industry where service is king, it is critical to understand what support resources will be available to you as a customer and how responsive that support team is to your support requests. Support teams may be in distant locations, making regular communication difficult.

Lack of Compliance Training

The adherence to compliance training and the responsibilities for backup security must be thoroughly understood by both parties. Every vendor claims their solution can be used to achieve compliance with HIPAA and other industry regulations, but the responsibility of proper integration still falls upon the MSP. Few vendors dedicate resources towards specialized training to guarantee that they can provide a solution that meets strict regulatory requirements.

First, you will need to determine your customers’ backup requirements, especially regarding data recoverability. You may find it helpful to have your clients categorize their data into business-critical, important but not business-critical, and non-critical data. This may be a moving target. However, establishing a process to quickly identify, categorize, and secure new data sources as the business changes will help you navigate this key step with your clients.

Recovery Objectives

You should know how much data your client can afford to lose, and still return to business quickly. Determining a customer's loss tolerance is a key part of building a backup strategy. For example, while cloud storage enables your client to restore organizational data from anywhere, that does not mean that all data will be accessible to the client immediately. The client must be able to express to you the number of minutes between discomfort and outright catastrophe when it comes to the loss of critical systems.

You will need to understand typical backup scenarios and your customers’ RTO and RPO expectations.

If you are backing up a client with rapidly changing data, putting a backup with frequent intervals into place may be critical. Also, RPO may vary based on whether the data loss event occurs during business hours or after business hours.

In a disaster scenario, a company’s downtime can be quantified with an actual dollar amount using several popular methods. Seeing this number in writing goes a long way in getting a client to grasp the importance of implementing proper backup procedures.

Matching Data to Storage

With data classified and storage options identified, you can match appropriate systems with the best backup target. Through storage tiering, you can match the most vital data to the fastest storage devices, and less critical data using more affordable options. This may even include recycling older storage technology that could still be used for less important data.

It’s also important to consider whether your services and the client infrastructure will be able to support the movement of data between storage tiers. If your backup services are unable to meet the client's RPO/RTO requirements, then you have established a “recovery gap”. Whether stored locally, in an offsite data center, or in the cloud, the client will need to have the right set of expectations for restore time. (Read more about setting customer expectations.)

You will also need to identify customers that have specific regulatory requirements your services will need to meet. When you have a good understanding of what your customers expect from a managed backup service, you can define the best way to have all of them follow the 3-2-1 rule (three copies of data, on two media types, with one held offsite).

Access and Training

As the MSP, all responsibilities for backup may be delegated to you, but sometimes a client backup administrator will also exist. Depending on their abilities, the backup process may need to be fully automated or alternately allow for more flexibility and manual customization. You must be the judge of what the client needs to feel a sense of security and control of their data.

Businesses with a high number of offsite and roaming employees may also pose a challenge. These workers may be more likely to inadvertently violate security protocols or access unsecured devices, leading to an increased security risk. MSPs must take a close look at both the number and type of employees that operate outside of the traditional office environment, especially if sensitive data is becoming more widely dispersed. Furthermore, employees should undergo regular disaster recovery drills to reinforce security policies and limit the risk of data loss.

Growing new businesses often requires filling your MSP sales funnel as part of your sales process. A typical MSP sales process might flow from lead generation to initial contact, presentation, demo, and finally, an attempt to close the sale. MSPs that have not made sufficient effort to build a strong relationship with potential clients, especially in the initial stages, will find their win/lose ratio sorely lacking. This is especially true with data backup, as trust in the support team behind the technology solution is so important. Connecting with your prospects on a personal level, while also communicating the value you will provide their organization is what it often takes to seal the deal.

Essential Elements to Building Trust with Prospects to Close New Business and Create Long-Lasting Relationships

Organizations these days have so much information coming at them. If you were able to establish an initial meeting, they know enough about your company to consider you a potential partner. Let them know what you are all about, but the client should be doing most of the talking. Encourage them to discuss problems they have had with prior vendors and find out what their expectations are and what their plans for growth look like. Follow a general philosophy of 80% listening and 20% asking investigative questions. Pinpointing a specific way in which you can differentiate yourself from the competition is helpful in early discussions.

Salespeople get a bad rap for being dishonest, and most do not fit that “used car salesman” stereotype. But to close a sale confidently, a prospect must trust and have faith in you. Honor your commitments and promises, for phone calls, meeting purposes and even meeting length from day one. Demonstrate real empathy for the problems your prospects are facing and follow up with your approach for a resolution. Your approach might not always match their expectation, and that is fine if you can show the reasoning behind your methods.

According to the Harvard Business Review, B2B buyers rated just 18% of salespeople as advisors whom they respect. The primary reason as you might expect was that salespeople come off as focused only on revenue and generate too much pressure to purchase early on. Conversely, a prospect is willing to respect a salesperson’s initiative once they have built a close connection. A salesperson must respect the process that a business goes through to make a purchase, and never talk down to a prospect.

Content

Do you know what interests your prospect? Identify the technologies, regulations, and trends that the prospect considers important and share relevant content and insights that they will enjoy - without asking for anything in return. You are trying to develop a relationship beyond being a “sales rep.” Not only will it open the door to conversations surrounding your services, but it can build reciprocity. This, in turn, builds trust.

Audit / Assessment

Demonstrate your abilities by providing a free assessment of their environment. This will provide deeper insight into their needs and an opportunity to explain how your services will solve problems, provide value, and save them money. If they are not ready for your services, you have strategically positioned yourself as a valuable, enthusiastic resource that can help them reach their goals.

Technical Expertise

Your style and presentation should match that of the audience. So, while not applicable to every meeting, enlisting the help of a technical specialist or two has potentially high value. These experts should understand your technologies end-to-end and be able to explain how they apply to the prospects' environment. Beyond just being a source of technical advice, these resources should inspire confidence. If problems arise during the deployment of services, it should be clear that their expert problem-solving skills are sufficient to provide a workable solution that meets your needs.

References

Customer testimonials are often cited as the most valuable content for establishing brand confidence, however, this is only true if it is relevant to the prospect. Using great customer references can increase the chance of closing a sale if the referrer comes across as genuine and demonstrates how a problem was solved. While references alone may not be enough, once the major roadblocks to success have been neutralized, they can be used effectively as part of your closing process.

It is easy for Managed Service Providers to focus most of their efforts on retaining customers and delivering quality services. If you are successful in this area, your prospects already know you have the technical ability. An equal amount of energy must be put into building prospect trust to close new businesses. Following these methods will go a long way in taking your relationships, and your profits to the next level.

The vendor you select for Backup-as-a-Service should provide a central management platform allowing you to set up backup jobs remotely, easily monitor quotas and job statuses, and restore customer data. It should also offer reporting and notifications to keep you aware of what is happening with your customers and check that their backups are working (and if not, why).

Another key factor in choosing a vendor is based on how easy they are to work with. The best vendors will offer straightforward licensing and help you find the right balance of local and cloud storage for your customers. They will also give you the support you need to solve problems quickly, with in-house experts who understand your business and are available when you need them.

To compete with low-cost providers and multinational corporations, Managed Service Providers should focus on their unique data protection services and personalized support. That means, the backup software vendor you partner with is important to your success. Reselling backup software or providing cloud storage may be easy. But ensuring that terabytes of mission-critical data are available requires a higher level of accountability, that you will need to hold your partners to.

Reliable software partners provide a high level of service, which should include the following:

• Close collaboration between you and the vendor
• Phone and online/email support in English (and in your time zone)
• Additional support during installation, setup, and business model implementation
• Dedicated account management with a clear escalation process
• Help you define additional services such as local or cloud backup implementation

By choosing the business model that works best for you and your customers, positioning yourself correctly, and working with a reliable software partner, you can run a managed backup service with excellent prospects for the future.