SaaS backup: The untapped revenue opportunity for MSPs

The shift from on-premises solutions to Software-as-a-Service (SaaS) applications has accelerated in recent years as businesses look for greater flexibility, scalability and cost efficiency. This transition is reshaping IT strategies, creating new opportunities for managed service providers (MSPs) to strengthen client data protection and increase profits.

According to The State of SaaS Backup and Recovery Report 2025, over 50% of workloads and applications are in public cloud environments today, and this figure is expected to grow to 60% within the next two years. However, only 40% of organizations said they trust their backup and recovery solutions to protect critical data in the event of a disaster. This presents a major opportunity for MSPs to provide robust solutions to secure their clients’ SaaS data and stay ahead of the curve.

Let’s look at how your MSP can unlock new revenue streams by offering SaaS backup as part of your MSP services.

SaaS backup is no longer optional — it’s essential 

The State of SaaS Backup and Recovery Report 2025 revealed that accidental deletion was responsible for more than 30% of SaaS data loss, while malicious insiders caused over 25% of incidents and external threats resulted in nearly 30% of cloud data breaches. Among organizations that have adopted Microsoft 365 or Google Workspace, only 66–70% report having a backup strategy in place, leaving a significant share still at risk.

Many businesses falsely believe that cloud service providers (CSPs) are responsible for data protection. However, this isn’t entirely true. CSPs are responsible for application uptime and availability and the protection of the underlying infrastructure that runs those apps. Customers, on the other hand, are responsible for protecting their organization’s data, accounts and identities.

What MSPs can gain by offering SaaS backup

For MSPs looking to differentiate service offerings or improve margins, industry-leading solutions like Datto SaaS Protection can help enhance your MSP portfolio and turn SaaS backup into your next growth engine.

Datto SaaS Protection provides: 

• Automated, 3x daily backups: Comprehensive protection without manual intervention.
• Restore across M365 and Google Workspace: Recover lost data quickly without any hassle.
• Multitenant portal: Manage all your clients in one place, with full visibility and control.

Why MSPs choose Datto SaaS Protection:

• MRR with every license: Earn predictable monthly recurring revenue (MRR) by adding Datto SaaS Protection to every client license.
• Differentiated offerings: Datto is a well-recognized brand in the SaaS market. Adding Datto SaaS Protection to your tech stack will enhance your portfolio and help position you as a full-service MSP.
• Improved client retention: Our solutions help you deliver robust SaaS data protection that your clients can rely on. By strengthening data protection and offering peace of mind, you can keep clients longer.

Stop overpaying: The departed employee data trap

Businesses keep former employee accounts active or retain data for specific periods to comply with industry regulations and legal holds for investigations or audits.

According to The State of BCDR 2025 report, 14% of organizations keep licenses active after employees leave​, which increases storage costs. Microsoft 365 licenses range from $6 per month (Business Basic) to over $30 per month (E3, E5), while Google Workspace licenses range from $6 per month to more than $25 per month (Enterprise). These numbers might seem reasonable for a few accounts or short-term data retention. However, the costs can significantly increase if your clients have to keep a large number of ex-employee accounts active or retain data for a longer duration.

That’s where cutting-edge SaaS backup solutions like Datto SaaS Protection can be your lifesaver. Datto SaaS Protection’s archive license costs less than $3 per month, delivering massive cost savings while ensuring long-term data retention.

Smart bundles, bigger margins: Positioning SaaS backup to sell

SaaS backup can be packaged and priced in multiple ways. Some MSPs offer it à la carte, but smarter MSPs bundle it with Microsoft 365 or Google Workspace security or other services. Here are a few packaging options to consider for your MSP:

Microsoft 365 or Google Workspace management plans: Bundle SaaS backup with Microsoft 365 or Google Workspace services to offer comprehensive data protection, simplified management and streamlined administration in one package.

Cybersecurity or compliance bundles: Pair SaaS backup with security or compliance management solutions to protect sensitive data and comply with industry regulations.

Tiered service levels for regulated industries: To ensure your clients get the right level of protection, offer customizable backup tiers for clients in regulated industries, such as industry-specific retention, reporting and recovery.

Protect clients, power your MSP business

SaaS protection is more than a safety net. Partnering with a trusted SaaS backup provider like Datto can transform data protection into a powerful growth engine for your MSP business. With a reliable solution like Datto SaaS Protection, you can help your clients stay secure, compliant and cost-efficient while growing recurring revenue and deepening client trust.

Ready to unlock the hidden value of SaaS backup and increase profits? See Datto SaaS Protection in action — request a demo today.