May 11, 2021

Consider TCO When Evaluating BCDR

By Andrew Burton
Build Your Own & Total Cost of OwnershipDatto SIRIS

When selecting a business continuity and disaster recovery (BCDR) solution for clients, it’s essential to understand its total cost of ownership (TCO). A low up-front investment may seem attractive, but if the BCDR solution you choose incurs significant management costs, you’ll chip away at margin on services delivered quickly.

Unfortunately, there’s no magic formula for determining the total cost of ownership of any piece of technology. That being said, you should start with hard costs, such as:

  • Upfront hardware and software costs
  • Ongoing licensing fees
  • Ongoing cloud compute and storage fees

Then you can move on to other factors that impact TCO, such as:

  • Ease of use
  • BCDR capabilities that offset costs (e.g., automation, scripting)
  • Support costs (additional fees, resources spent troubleshooting)
  • Employee salaries/cost of living in your region
  • Staff knowledge/experience
  • Vendors’ partner program and volume discounts

Some of these factors, of course, can be hard to quantify. However, they can have a large impact on your ability to deliver profitable services. So, it’s important to give them careful consideration.

As an example, let’s say you need to dedicate two full-time employees to manage BCDR services for 20 clients using solution X, which has a low up-front cost. Salaries, of course, can vary widely, but for the sake of this example, let’s say they each make $75,000 a year. So, you are looking at upwards of $150k a year in salaries for managing BCDR.

By comparison, solution Y carries a higher up-front cost, but automates many of the manual tasks required with solution X. In fact, solution Y is so much easier to manage that it only requires one full-time employee for those same 20 clients. You can see where this is going. Solution Y enables you to serve the same number of BCDR clients at half the salary cost. This kind of efficiency allows you to take on more clients without increasing headcount, expanding your margin on services delivered. This is a simple example, but it’s a good one, because staffing represents the largest cost for any business.

The Total Economic Impact™ Of Datto

We recently commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study to examine the potential return on investment (ROI) MSPs may realize by partnering with Datto. In this study, Forrester conducted an independent analysis of the benefits, costs, and risks associated with implementing Datto solutions.

The study found that MSPs achieved over $100K in additional average client base growth annually by partnering with Datto. Efficiencies gained via our BCDR, PSA, and RMM management tools drove that growth by freeing technician bandwidth to support more clients.

“If you looked at all the things that Datto does for our customers, we were doing that before; it just took twice as much effort to deliver those services. Now, with these tools in place, we can do more things with the same staff that’s a value to the customer,” said the CEO of a North American MSP surveyed in the study.

To learn more, download The Total Economic Impact™ Of Datto.

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