“Backup to the Future” is a blog series that explores the state of the backup and disaster recovery as a service today—and the challenges that come with offering it—and looks forward to the ongoing new paradigms that are dramatically transforming the sector into tomorrow. Through this eight-part series, you’ll learn the forces that are shaping the business models for MSPs offering BDR today, and how to evolve to take on new business more efficiently and more profitably for long-term success. In this first post, we'll tackle how to manage the total cost of ownership (TCO) of BDR.
When MSPs try to calculate the ROI of a business continuity offering, they often look at the cost of the solution they’re leveraging and compare it to the BDR revenue they’ve captured. If the former is smaller than the latter, then they’re satisfied. And while there’s nothing fundamentally wrong with this approach, many providers may find it difficult to ensure long-term profitability and scalability if they aren’t paying attention to the TCO of the tools they’re leveraging.
Spinning the Wheels with Yesterday's BDR Tool
Tabulating the simple ratio of hard costs to revenue turns a blind eye to numerous other factors that contribute to the TCO of the BDR service you offer to your clients. This outlook eats away at profitability month over month, to the detriment of business efficiency and growth.
Start by asking yourself the following questions:
- How much do you pay for your BDR platform every month?
- How much time do your technicians spend performing daily management of that tool every month?
- How much do you pay each technician that monitors and manages that software every month?
These numbers can add up fast, and are not conducive to a scaling business that is growing.
MSPs spend a considerable amount of time searching for, hiring, onboarding, training, managing and working to retain capable technicians and engineers for their core team. These qualified IT professionals have a variety of skillsets and experience, and their efforts as team members are directly tied to the growth, efficiency and profitability of the business.
However, the reality of managing many of the BDR tools in the marketplace today is that one or more members of an MSP’s staff will spend most of their time only managing that BDR tool, day in, day out. Those are costly labor hours that could be spent further developing the MSP business, new revenue opportunities, disaster recovery testing, and advanced projects to cross-sell/upsell existing clients. Instead, MSPs are paying skilled core team members to jockey a BDR tool to perform routine, recurring tasks. If a client (or more than one, in tandem) were to experience a data loss incident, or if there are any other spikes in service requests, those core team members are going to be stretched thin, and service delivery standards risk being compromised for all clients.
If this sounds familiar, it’s time for a change. This dynamic is shut in by reactive operations, and caught between an outdated labor model and a skills gap.
It’s not cost effective to hire technicians to scale—it leads to inefficient service delivery, resulting from fixed costs in staffing to meet the demand of the peaks and troughs of service delivery. More often than not, hiring to scale leaves technicians under-utilized at some points, and overworked at others. This inefficiency leads to wasted expenditure into labor—all of which can be factored into the total cost of ownership to offer BDR.
Additionally, the well-known skills gap in this industry continues to widen, even as BDR systems and client environments are becoming more complex. It is a limiting factor on the size and scope of many MSP businesses—as well as the amount of clients they are physically able to take on. The reality is that it’s increasingly difficult to hire a full staff of engineers with the right experience, skillsets and certifications to support existing and future clients, not to mention the soft skills inherent to be an appropriate fit for small business teams. And, once those employees are signed, retention becomes a major issue, because the skills gap empowers this IT professional to seek a competitive marketplace advantage for the position and salary they desire.
With so much at stake, MSPs must be selective in both who they choose to hire for their core team, and how they utilize their talent day to day. These soft costs can cut deeply into profitability and raise the total cost of ownership far beyond the cost of the BDR tool itself.
Fortunately, There's Now a Better Way
Continuity247 is much more than a run-of-the-mill BDR tool, and is unlike any other BDR solution in the channel. It’s built on the idea of “fully-managed backup and disaster recovery,” which solves the issues of reactive hiring and the skills gap challenge.
Fully-managed BDR extends an MSP’s workforce from the moment the first Continuity247 agent is installed. Continuum’s Network Operations Center (NOC) absorbs time-consuming tasks, routine maintenance and problem resolution, so the core team of technicians can be refocused on the work that best meets their valuable skills—those efficient, more profitable projects discussed earlier.
This also enables MSP business owners to spend far less time hiring, training and retaining new talent, and can spend more time closing new business with full confidence that the NOC can be scaled to meet the demands any client. This ability to scale resources up or down to meet demand is key to a drastically lower total cost of ownership over time for Continuity247 compared to any other BDR tool in the marketplace. Coupled with the skilled and certified technicians in the NOC, this new model for BDR service delivery in Continuity247 improves on the outdated labor models of yesterday and delivers a more efficient and more profitable solution for MSP businesses.
Click here to read part two of the series!