You might expect Backup as a Service, considered one of the more mature subscription-based services and among the most recognized business use cases for cloud services, to have infiltrated a significant portion of the backup market.
While research suggests that the pace of cloud backup use for all data types is picking up, only 13% of IT organizations are backing up their servers using the cloud, according to recent data from Forrester Research Inc. And while backup and disaster recovery rank among the top priorities for IT shops, according to late-2012 TechTarget research, they are not considered strategic at most companies.
Still, industry participants say that data protection services is a growth opportunity, a lucrative addition to a partner's product portfolio and a critical technology on the IT resiliency landscape.
One reason: Backup and disaster recovery provisioning are chores that many IT organizations would be happy to offload. Backup is a challenge for companies of all sizes because of its complexity and the fact that the process is error-prone, according to Rachel Dines, senior analyst at Forrester.
These backup-related challenges are expected to remain for some time, according to analysts, making backup and disaster recovery tasks great candidates for outsourcing, especially when the two services are combined.
"That's a great value-add opportunity for the channel, and organizations' budgets are growing for disaster recovery initiatives," Dines said. There's also growing interest in Backup as a Service at the branch and remote offices of larger organizations as well as for endpoint devices, such as PCs and laptops, she noted.
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In addition, the sheer growth in the volume of data that companies need to back up is, in and of itself, a revenue generator for partners.
"Without any new customer growth, we see a 30% increase in business growth just based on the growing volume of data that our customers want backed up," said Matthew Chesterton, CEO of OffsiteDataSync, a cloud-based data protection services company in Rochester, N.Y. With a sales force to bring in new customer opportunities, projected revenue growth becomes significantly higher, he added.
Services pricing is another factor that points toward increased uptake. Cloud backup is a commoditized market with falling prices not keeping pace with increases in data volumes, said Eran Farajun, executive vice president at cloud backup vendor Asigra Inc., making it a clear value proposition for customers.
For instance, cloud backup services that four-plus years ago cost about $5 to $10 per gigabyte (GB) per month dropped to $2 to $3 per GB per month about three years ago and fell even further to a current price of 50 cents to $1 per GB per month for hardware, software, expertise on the back end and data replication. Farajun said he's observed that the average volume and velocity of data generated at companies of all sizes has grown from 500 GB to 10 terabytes (TB) per month to multiples of 10 TB and upward per month.
This was first published in March 2013