July 21, 2021

Economics of the Cloud for BCDR

By Andrew Burton

For MSPs, cloud computing is a fundamental component of delivering business continuity and disaster recovery services (BCDR). However, the cloud platform you choose for a backup and recovery target can impact your bottom line. In this article, we’ll look at the economics of public cloud for BCDR.

Public cloud is often sold on the promise of affordability, and in many situations it can be. However, when you’re protecting cloud workloads on a single cloud provider, there are several additional costs you need to consider. To better understand why, let’s look at a simple example.

BCDR in the Public Cloud

In our example scenario, an MSP’s client has 1 TB of data protected in a public cloud. The MSP determines that $X will cover cloud storage costs. She then factors in her own costs (BCDR software licensing fees, maintenance, etc…) and determines that number to be $Y.

So far so good, but here’s where it gets tricky: What happens when she needs to perform (or even test) disaster recovery? In the public cloud, many operations associated with BCDR incurs additional costs. These include:

Cloud compute costs: BCDR operations require server resources. So, when she spins up a recovery virtual machine (VM), there’s a cost associated with it. Let’s call this $A

Egress fees: Public cloud providers charge fees for outbound data transfers. So, when she restores data to the primary server, that’s yet another fee. $B

MSP Management costs (Markup): These operations are not automated, of course. So, she must factor in ongoing management and support costs. $C

X + Y = Public Cloud Backup Cost
A + B + C = Public Cloud Recovery Costs
Public Cloud Backup Cost + Public Cloud Recovery Costs =
Total Public Cloud BCDR Costs

As you can see from this example, public cloud BCDR costs are unpredictable—simply because primary server outages are unpredictable, as are the amount of data being transferred across regions during a restore. So, how does our MSP solve for this problem?

She could estimate potential BCDR costs and factor them into the client’s monthly fee, but underestimating costs is a very real possibility, making this an inherently risky approach. Her other option is to pass these costs on to the client as they are incurred. However, this can lead to a bad client experience, even if it is explicitly stated in the MSP’s agreement.

BCDR in the Datto Cloud

Now let’s look at how these costs differ when partnering with a BCDR provider like Datto. With Datto, MSPs pay a single, monthly fee for backup, disaster recovery, and cloud. This makes calculating the total BCDR cost simple and predictable, with no need to estimate costs associated with cloud BCDR operations or restores. Server workloads are protected and can be quickly recovered without a spike in OPEX costs.

Datto BCDR Cost + MSP Management Costs = Total BCDR Cost

Partnering with Datto can streamline technical support and ease management, as well. These costs can be hard to quantify, but successful MSPs understand that efficiency drives revenue growth. This kind of efficiency allows you to take on more clients without increasing headcount, which expands your margin on services delivered.

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.

We’re extending this predictability and efficiency to BCDR in the public cloud with Datto Backup for Microsoft Azure. With Datto Backup for Microsoft Azure, data is replicated to the Datto Cloud, meaning it is multi-cloud by design with $0 in variable egress charges or other associated disaster recovery costs. You just receive one flat-rate bill each month.

Interested in learning more? Download The MSPs Guide to Business Continuity and Disaster Recovery.

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