March 28, 2015
Backup and Business Continuity is Not for DIY
5 Reasons MSPs Should Not Go It Alone
SMBs depend on IT every minute of every day to serve customers and make money. So if they experience a major IT outage, their financial losses can be significant. They can even go out of business. No doubt there is tremendous opportunity here for MSPs and IT solution providers, to support today’s data-centric businesses. Don’t just rush in, however. Do your due diligence in weighing the options on how you go-to-market. Is it better to build or buy a backup solution? It’s time to separate fact from fiction, and consider all the factors.
FACT: Supporting SMBs with comprehensive backup and business continuity solutions is a great market opportunity for MSPs.
FICTION: By building their own backup and business continuity environment, MSPs will make better margins.
Before any solution provider dives into a DIY backup project there are some key factors to consider. We’ve identified five, including:
1. Infrastructure Economics
Building and maintaining the infrastructure necessary to support a backup and business continuity solution is not for the faint of heart, or wallet. An infrastructure to store data, manage backups, perform restores, and enable continuity is a highly capital-intensive undertaking. MSPs that go this route are subject to razor-thin margins.
2. Operational Economics
Backup and business continuity solutions don’t just require significant upfront investments in infrastructure. They also require ongoing investment in operational diligence. This is often overlooked by anxious DIYers. Other factors to consider are maintaining infrastructure health, constantly monitoring capacity requirements, managing backup integrity and recoverability, and accurately managing utilization, billing and p/l reporting.
3. Compliance and Indemnification
Be ready to have a slew of attorneys on retainer. When a solution provider takes on their own backup solution, they also take on the responsibility of regulatory compliance—whether it’s HIPAA, SOX, PCI DSS, etc. The other option is to turn down potential customers based on their compliance requirements.
Ironically, success can be as troublesome as failure for MSPs when it comes to business continuity. As its customer base grows, an MSP can quickly find itself out-growing its projected infrastructure footprint. It then has to decide whether to expand to another facility or leverage more co-lo space or cloud capacity.
5. Opportunity Costs
Like all organizations, MSPs and solution providers have limited resources. So if they’re doing one thing, they’re not doing something else. MSPs therefore need to factor opportunity costs into any financial projections they do as part of their go-to-market plan for business continuity.