A managed service provider (MSP) that offers a data protection service typically provides backup, recovery and high availability capabilities to their customers in the form of a subscription based service. In some cases those providers enjoy a similar pricing model from the data protection software vendors they choose to work with as part of their offering. When it comes to hardware however, the provider often has to purchase it up front and wait for their business to grow to justify the expense.
Selling a subscription based offering that is supported by a capital expenditures (CapEx) infrastructure makes for a situation that is difficult to scale or at least to be consistently profitable. Worse, if for some reason the business slows down, the service provider can’t send the hardware back.
Depending on the vendor, the software component is also a challenge. While many vendors claim to have special service provider arrangements, the arrangements usually tend to be a series of upfront purchases rather than a true OPEX model. Few vendors have an unlimited use subscription model that MSPs really need to smooth out their revenue streams.
The result of the lack of a hardware and software turnkey model leads many service providers to adopt an agency strategy instead of a true service provider strategy that adds differentiated value. As Storage Switzerland discussed in its series of blogs “Agent or Provider? The MSP Conundrum”, there are risks associated with being an “agent”.
Data protection service providers need to find vendor partners that can deliver the software and hardware in a true operating expenses (OPEX) model to take pressure off of managing the business side of being a provider.
Asigra and Zadara Partnership
Asigra is a leading provider of data protection software solutions who works almost exclusively with managed service providers. Zadara is a company that provides scale-out OPEX only storage as a service and that also works with managed service providers. These two companies have partnered together to provide a turnkey solution in which the Asigra software is integrated onto the Zadara storage infrastructure and service.
An MSP now has access to a single scalable platform, available as a purely OPEX purchase. The combination takes out the lumps in the MSP’s business and allows them to aggressively go after new business without fear of not having the infrastructure to support that business.
One of the biggest challenges for a data protection MSP is growth. While it may be a “good problem to have”, buying additional infrastructure at just the right time is no easy task. Many providers have found themselves struggling through growth spurts and an MSP who is growing rapidly may be constantly struggling with funding their growth. A model that is purely OPEX for both hardware and software allows the MSP to smooth out the curves so they can grow as fast, or as slow, as the market permits. The Asigra-Zadara solution is an excellent example of two companies working together to make MSPs more successful.