SMB MSPs Recover Margin & Account Control

Managed Services Providers (MSPs) offering online backup for Disaster Recovery and Business Continuity to their Small & Medium Business (SMB) customers now have an option to the prevailing practice of reselling services from industry heavyweights.

With the arrival of Elastic Block Storage (EBS) in the Amazon Elastic Compute Cloud (EC2) the up front cost for the data center assets to deliver an offsite storage capability have been reduced to zero. This means that MSPs in the space will be able to offer their customers equivalent data integrity while reclaiming 100% of margin and account control. This last issue looms large for many MSPs because they have seen their influence erode over time as their customers default to communicating directly with the provider. The theory is that the MSP "owns" the customer but the reality is that they are often reduced to bystander status.

There are two major costs for such an "indirect" relationship with the customer. The first is obvious; the upstream provider typically consumes the lion's share of the margin. The second is less apparent and goes by many names. For this discussion, we will use the term "opportunity cost" because every customer conversation not held means the opportunity is lost to understand what their objectives are, not just for data protection, but for their business objectives.

This is of critical importance as system and storage virtualization shift the preferred data replication methodologies from block to file and accelerate the ability and the desire of SMB customer to do lots more than just backup data. Tools like WarLock DR+ offer SMBs the chance to proactively aggregate and distribute data files to improve not just survivability but also their operational efficiency. Many of these conversations are now being held for the first time and MSPs should strive to be in them all.

Sure EC2 and EBS fullfill the promise of hardware as a service (HaaS) but as with all new technologies they require active participation and delivery. Fortunately the rewards of delivering the message are crystal clear and once again profitable.