An effective business continuity and disaster recovery (BCDR) plan should be considered essential for organizations of all types. However, data protection rarely gets enough attention—even though ignoring it can have serious implications.
Revenue loss associated with IT downtime can be devastating to businesses—especially small to medium sized businesses (SMBs) that cannot absorb losses as easily as larger corporations. This represents a significant opportunity for managed service providers (MSPs).
The Cost of Downtime
Many businesses look at data protection as an operating expense akin to an insurance policy. They know it’s necessary, but they resist investing in it because it doesn’t generate revenue. At Datto, we believe that is short-sighted at best, because IT downtime can have a significant impact on a business’ ability to generate revenue.
Consider the following example. Restoring 2TB of data to a server from a local backup using traditional backup software over a typical network connection could take 10 hours or more. That’s assuming that replacement hardware is available and the local backup is usable. Restoring from an offsite backup would take considerably longer and downtime costs would be much higher. During that time, productivity and revenue generation would be severely impacted.
With a proper BCDR solution in place, downtime in the scenario above can be reduced to a matter of minutes. Here’s how: BCDR solutions, such as Datto SIRIS, use a combination of snapshot and virtualization technologies to create a replica server image on a backup device and/or in the cloud. It is kept up-to-date over time with automated, incremental backups. In the event of an outage, the backup image can be quickly ‘spun up’ as a virtual machine and normal business operations can continue on the local device or in the cloud.
When speaking to clients and prospects it’s essential to communicate the potential cost of downtime and how a BCDR solution can eliminate it.
The BCDR Opportunity
As noted above, delivering BCDR as a service is a significant opportunity for MSPs. Let’s look at some of the benefits:
- Generating recurring revenue: Because data protection requires ongoing attention, BCDR is an excellent fit for delivery as a managed service. For IT providers that are transitioning break-fix customers to managed services, BCDR can be a good place to start.
- Providing great customer support: Success in managed services is all about providing an excellent customer experience. It is often said that MSPs profit from client success rather than when something goes wrong. BCDR keeps businesses up and running—that means satisfied clients.
- Getting a foot in the door: BCDR can be a pathway to other opportunities with clients, especially those that have in-house IT teams. For example, an SMB might outsource BCDR to an MSP so they can focus on other aspects of their business. After seeing the value of the MSP’s support, they might hand over IT responsibilities such as helpdesk or network monitoring. This is often referred to as “co-managed IT” and seems to be a growing trend in the industry.
According to Datto’s 2020 State of the MSP research, MSPs that generate a higher percentage of revenue from managed services are growing their businesses faster: for every 10% increase in the proportion of revenue from managed services, MSPs’ annual growth rates increase by 0.25 to 0.75 points. So, increasing the percentage of your managed services revenue stream from 20% to 70% improves annual growth by 1-4 points. Compounded over time that’s significant. Additionally, generating a higher portion of revenue from managed services also helps MSPs improve their business resiliency by maintaining steady cash flow and revenue during economic downturns.
The bottom line: there’s no better way to grow and strengthen an IT practice than by shifting as much business as possible to the managed services model. Partnering with Datto to deliver BCDR as a service represents one opportunity to do so.
Head over to datto.com to learn more about the products and resources that Datto offers to help grow your business in 2020!