Trends in business continuity

Just what do customers expect resellers to deliver when it comes to business continuity? Austin McChord, founder and CEO, Datto has the answers

What is the most prominent trend in your field, currently?

Certainly, one of the major changes influencing the market is the rapidly decreasing tolerance of downtime. This is affecting businesses at all levels. If the new series of Game of Thrones cannot be downloaded on its day of release by subscribers, it will make the news pages.

The same outlook is to be found throughout business. It is tending to make cloud-based data backup yesterday's news and bring hybrid-cloud business continuity into the limelight, because it doesn't just protect data, it protects applications.

It is only in the last seven years or so that SMBs have been able to afford a solution that will keep them going, even in the event of something as catastrophic as site-loss. Of course most SMBs don't experience site-loss due to flood or fire, but they do have to cope with power cuts, server failures and activities by rogue employees.

These are the sorts of problems that occur relatively frequently, but tolerance of downtime after they have happened is certainly on the wane. SMBs are fully aware that when their equipment fails and they cannot restore their data or their applications, they lose customers.

What about developments among MSPs?

An exciting development is that some of the smaller MSPs are building specialised systems around backup and disaster recovery. They are then approaching larger organisations that have their own internal IT infrastructure to ask whether they have thought about backup outsourcing.

Their proposition is put to the executive with responsibility for IT, which is a good idea as they have plenty to gain. If this executive does backup and disaster recovery properly, nobody in the organisation notices. However, if it goes wrong, he or she is very clearly in trouble.

What is happening in the USA that is likely to migrate to Europe?

In the US, MSPs are building business continuity packages and embracing the idea of recurring revenue by selling the product as a service. I think MSPs are more advanced in this in the USA than here. Over there, up to 40% of an IT reseller's revenue can come from selling backup. Cloud-enabled backup solutions are often the first recurring revenue product an MSP picks up.

It is part of a trend within IT. Whether people like it or not, IT is moving from selling products to selling services at every level. The driver for it is the rapid development of technology, but on the other hand, building a recurring revenue stream also makes running a business so much easier.

It is much better to build an annuity instead of relying on single large purchases from customers.

Any other thoughts?

One simple idea that is frequently overlooked by a lot of providers is the importance of value over cost. This is about dropping the obsession with adding points to the margin when selling solutions to end-businesses and instead providing them with a convincing value proposition. That is the real way to generate margin. 

You allow customers to see how much a business continuity solution will save them by eradicating downtime. Then it becomes clear that for an SMB, the technology will pay for itself within three years, even if they just have one day of downtime in that period.

Backup is protection against data loss, but business continuity is protection against downtime. It is the latter that is so catastrophically costly for any organisation. Backup, whether to tape, software or in the cloud, will restore your data but it will not let you carry on running your business when you have a disaster. Only business continuity technology will do that.

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