August 04, 2020
Consider Total Cost of Ownership When Selecting a BCDR Solution
There are many factors to consider when evaluating business continuity and disaster recovery (BCDR) products. For managed service providers (MSPs), total cost of ownership (TCO) should be high on that list.
Why? Because TCO has a direct impact on your ability to build margin on your services. Think about it. When billing clients, you mark up hardware, software, and cloud costs to cover ongoing management—simple, right? Definitely, until it’s not. If the BCDR solution you deploy requires constant attention, you’ll chip away at that margin quickly. Not good. So, TCO. It’s important.
Calculating TCO of BCDR
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.
All-in-one vs. Build-it-yourself BCDR
One of the largest considerations in evaluating TCO is whether you’ll choose a turnkey, all-in-one BCDR solution or build your own using a software-only product. There are a variety of excellent products on either side, offering similar capabilities. A feature-by-feature comparison is obviously well beyond the scope of a single blog post. Instead, let's take a look at key areas where the two differ.
In many cases, build-it-yourself systems may have lower up-front costs, since you can deploy them on any hardware (e.g. inexpensive, commodity x86 servers). However, they can require considerable resources to deploy, because you need to worry about compatibility, processor size, storage capacity, etc. You also take on more risk if you build your own solution, because you need to coordinate between all the vendors if there is an issue.
All-in-one solutions, of course, come with a higher up-front price tag. However, deploying an all-in-one solution is relatively easy, since the hardware is optimized to run that vendor’s software out of the box. Additionally, all-in-one solutions can be right-sized for client deployments by the vendor—eliminating manual labor on your end. All-in-one solutions may even include hardware replacement and capacity upgrades, easing scalability over time.
Vendor support is another essential consideration. With an all-in-one solution, you get single-vendor support, eliminating finger pointing when issues arise. This greatly eases troubleshooting and ensures you can get clients back up and running quickly.
Datto SIRIS is one example of an all-in-one BCDR solution. With SIRIS, you don’t need to waste time struggling with configuration, ongoing management, and troubleshooting. This saves your techs time and reduces OpEx spending—increasing margins and driving revenue. Our recent survey data bears this out; *we found that Datto partners attributed nearly 10% of their growth to the Datto partnership.
SIRIS takes the guesswork out of delivering BCDR services—allowing you to focus on what you do best—providing excellent support to your clients.
To learn more about how Datto SIRIS can streamline managed services operations, increase margin, and drive revenue, try a free demo.
*Datto’s 2020 State Of The MSP Report