How to turn SaaS backup into an MSP profit engine

Cloud-first operations have changed how businesses work. Today, most organizations, whether large enterprises or small and midsize businesses (SMBs), depend on at least one Software-as-a-Service (SaaS) application to manage their daily operations.

SaaS platforms, such as Microsoft 365 and Google Workspace, sit at the core of daily business activity, supporting everything from collaboration and data storage to remote work and scalability. However, this rapid shift to SaaS applications has also introduced a new challenge. Many businesses that have embraced these platforms still haven’t put the right protections in place to secure the critical data flowing through them.

When SaaS data isn’t properly secured, even a simple human error or a malicious attack can trigger major consequences — operational disruptions, compliance violations, legal exposure and heavy financial losses. For MSPs, this growing risk across businesses creates a significant opportunity to step in with the right solution. By closing these protection gaps, MSPs can strengthen client resilience and unlock a steady stream of monthly recurring revenue (MRR).

In this blog, we’ll break down the vulnerabilities businesses face when relying on SaaS platforms, the essential role of SaaS backup and how MSPs like you can turn this growing need into a driver of long-term growth, stronger client relationships and increased profitability.

Cloud adoption accelerates — but so do the risks

The move to the cloud is accelerating fast. SaaS applications and public cloud workloads now dominate modern IT environments, with more than half of all workloads running in the cloud — a number expected to rise beyond 60% in the next two years.

Despite this shift, many businesses still rely solely on native data retention features provided by cloud platforms. These built-in tools may offer basic recovery options, but they aren’t designed to address the full spectrum of threats, such as accidental deletions, cyberattacks or intentional data removal.

The challenge goes deeper. Confidence in existing backup strategies is also declining. According to the State of SaaS Backup and Recovery Report 2025, just 40% of businesses feel confident that their current backup solutions can recover critical SaaS data during a crisis. Even more concerning, nearly one in three haven’t updated their backup systems in over five years.

For MSPs, this presents a dual opportunity: reduce client risk and expand service offerings. By helping clients understand the limitations of native retention and the realities of the shared responsibility model, you can position third-party SaaS backup as an essential layer of protection, strengthening your value proposition while driving a robust monthly recurring revenue (MRR).

What’s putting pressure on MSPs?

The MSP industry continues to grow, but profit margins remain under strain. According to the State of the MSP Industry 2025 Look Ahead report, more than 60% of MSPs reported revenue growth last year — yet many are still struggling to turn that growth into profit. In fact, almost 91% listed profitability as a key business concern, with 63% naming it their top priority.

Multiple challenges are driving this pressure. Operational costs are rising due to growing headcounts, expanded toolsets and the ongoing impact of client churn. At the same time, many MSPs are missing out on high-margin opportunities that could ease these financial pressures, especially services like SaaS backup that require minimal overhead but deliver recurring revenue.

SaaS backup not only solves critical client needs around data protection, compliance and business continuity but also helps MSPs scale efficiently and profitably.

It’s no surprise that over 60% of top-performing MSPs already offer third-party SaaS backup as part of their service stack. Those who don’t risk falling behind.

Without SaaS backup, MSPs face:

• Rising costs: More time and resources spent on preventable incidents like accidental deletion or ransomware recovery.
• Eroding trust: Clients in regulated industries could face compliance issues, damaging long-term relationships.
• Lost differentiation: In a crowded market, failure to offer proactive data protection can make it harder to stand out.

What happens when SaaS data isn’t protected

As businesses continue moving operations to the cloud, SaaS platforms have become prime targets for both external attacks and insider threats. According to the State of BCDR Report 2025, over half of organizations have experienced malicious SaaS data deletion, split almost evenly between cyberattacks and actions from internal users.

There’s also a sharp disconnect between how fast businesses think they can recover and how long recovery actually takes. While more than 60% of respondents expected to recover from downtime within a day, only 35% managed to do so. Almost 35% of organizations reported recovery times stretching into days or weeks. Even more alarming, around 2% admitted they wouldn’t be able to recover their lost SaaS data at all.

Yet despite these risks, many businesses still operate without a solid SaaS backup strategy. The same report shows that only 70% of Microsoft 365 users and just over 60% of Google Workspace users have a backup plan in place. That leaves a large number of organizations vulnerable to data loss, extended downtime and increased risk from security incidents and regulatory failures.

The shared responsibility model: What many still get wrong

A major misconception among businesses using SaaS applications is who’s actually responsible for protecting their data. Many assume their cloud providers handle it all. In reality, under the shared responsibility model, providers like Microsoft and Google manage the infrastructure and ensure platform uptime. However, the responsibility for data protection falls squarely on the customer.

Even Microsoft clearly states that once user-deleted data exceeds the retention window, it’s gone for good unless a third-party backup solution is in place. Whether it’s accidental or intentional, data loss without an external backup is often permanent.

This is where MSPs can add real value by helping clients understand the limits of built-in retention. Customers need to be made aware that SaaS backup isn’t an optional add-on but a critical service that protects client data, supports compliance and ensures recovery when it matters most.

Datto SaaS Protection: A growth engine for MSPs

In a competitive MSP market, standing out takes more than delivering the basics. SaaS backup has become a strategic service that not only protects client data but also fuels long-term business growth. With Datto SaaS Protection, MSPs can deliver reliable, high-value services while building predictable MRR.

Here’s how Datto SaaS Protection helps drive growth:

• Build recurring revenue with minimal overhead: Unlike traditional infrastructure-heavy solutions, Datto SaaS Protection allows you to scale revenue without the burden of high upfront investment or ongoing complexity.
• Lower support volume by reducing data loss: Proactive SaaS backup means fewer emergencies. Datto helps minimize avoidable incidents, leading to fewer support tickets and more efficient operations.
• Improve retention with bundled, high-impact services: Clients expect more from their IT providers. Bundling SaaS protection with offerings like phishing defense or Microsoft 365 management increases perceived value and strengthens loyalty. Datto’s integrated platform enables seamless bundling, helping you boost revenue and keep clients longer.

How MSPs can turn SaaS backup into a growth opportunity

As reliance on SaaS platforms continues to rise, so does the opportunity for MSPs to lead the conversation around data protection. Here are four practical steps to help MSPs make the most of this opportunity:

1. Evaluate client use of Microsoft 365 and Google Workspace

Start by auditing your clients’ SaaS environments to identify where their data lives and how it’s being used. This will help uncover coverage gaps and allow you to offer more targeted backup solutions that address real risks.

2. Use real-world examples to illustrate risk

Many clients underestimate the risks tied to SaaS data. Bring context to the conversation using anonymized case studies or examples of incidents, like:

• Employees deleting files before leaving the company
• Critical folders being accidentally erased
• Ransomware encrypting cloud-stored data

These examples make the threat real and the value of backup clear.

3. Position backup as a compliance and insurance enabler

With stricter compliance rules and tougher requirements for cyber insurance, businesses must prove they have strong data protection in place. Framing SaaS backup as essential for meeting these requirements can help clients see it as a business-critical investment.

4. Package backup with co-managed services for larger clients

Larger businesses — especially those with internal IT teams — often need layered support. SaaS backup fits naturally into co-managed service models. Bundle it with offerings like:

• Endpoint protection and mobile device management
• Microsoft 365 administration and provisioning
• Phishing defense, dark web monitoring or security training

Bundled services not only drive higher revenue but also reinforce your role as a strategic IT partner.

Power revenue and resilience with Datto SaaS Protection

SaaS backup isn’t just about checking a compliance box; it’s a core component of a modern MSP’s value proposition. As SaaS applications like Microsoft 365 and Google Workspace become the backbone of daily operations, businesses expect complete confidence that their critical data is secure, fully recoverable and built to withstand disruption. Stay ahead of client needs and market demands with Datto.

Book a live demo of Datto SaaS Protection and discover how to turn proactive data protection into reliable, recurring revenue.