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Developing managed backup services with key questions

Managed backup services are not easy to offer initially. Resellers have to consider questions of technology, sales strategy and business considerations before managed backup services will be profitable both to you and customers.

When developing managed backup services, you must consider technology alignment, sales and marketing strategy,...

and a plan involving a financial internal rate of return (IRR) model, which will help you develop your business case. A successful managed backup service offering will strike a balance without compromise among these three areas, outlined with key questions to ask yourself in this tip.

Key managed backup services technology questions

  • How can you position a service to scale to customer needs, whether it's a single PC or laptop, SOHO (small office home office), small to midsize business (SMB), enterprise or other?

  • What are your client software deployment options? Should you use the Internet for downloads, or provide CDs or some other media, such as a USB thumb drive?

  • What type of training is available from the manufacturer?

  • Will the software do what you need it to do to accomplish your business plan objectives? Will the technologies work as advertised?

  • What other features can you include with your managed backup service offering? Consider service provisioning features, such as billing and reporting, invoice generation, branding options, service level agreement (SLA) management and ease of use.

  • What will the requirements be for customer or client-side hardware, software and networks, as well as those for the back-end architecture, in order to support scaling with stability and resiliency?

    Key sales and marketing questions

  • What is the market focus and can you offer value-added features like clustering for high availability (HA)?

  • How will you sell the managed backup services, who will sell it for you, what are their skill sets and can they sell a service without significant retraining?

  • Will you sell MSP services direct or via a channel reseller network?

  • Will you private label the product for your own identity or for that of your resellers?

  • Can you deliver multiple levels of service to your clients?

  • What price will be able to support your business model and IRR along with billing capabilities to scale to various customer and client needs? Seek out value beyond the software features and look for template tools to help launch a managed backup service so that you do not have to reinvent the wheel for contracts, documentation and associated marketing collaterals. Other considerations pertaining to technology include how it is licensed, how renewals and upgrades are handled, is the software agent or agentless, and what is the user interface like.

  • Can your existing sales people sell backup services, and if not how long it will take to either retrain or hire people who can sell a service? What will that that cost be?

  • Test the market by talking to close customers to see if they would be interested in purchasing your proposed service, what they would be looking for and what they would like to pay for different tiers of service. Also ask your customers if they would be a reference as an early adopter in exchange for a discount or favorable pricing.

    Key business questions

  • Which vendors can help you determine your IRR model? For example, which vendors have templates and other tools to help develop your business case and guide you through the ins and outs of managed service data protection.

  • How much money will you have to invest in delivering managed services, which include hardware, software, network, facilities, staff and other business expenses?

  • How long will the sales cycle be and when can you expect to sustain revenue generation to recoup your investment?

  • Who is your competition? If there is no competition, what if any alternatives exist and why is there is no competition? Do others know something you don't or is it truly an untapped opportunity?

    The key to a successful model as a backup managed service provider is to do your homework, looking at the three main areas of technology, sales and marketing, and having a sound business plan that you can validate. Look around, talk to others, and get multiple opinions from vendors and independent consultants to leverage their experience.

    Return to the first part of this tip, How to develop managed backup services.

    About the author: Greg Schulz is founder and senior analyst with the IT infrastructure analyst and consulting firm the StorageIO group. A 25-year IT veteran, Greg has worked as an IT customer, vendor, author and industry analyst. He has worked with applications, servers, databases, networks, storage, DR/BC, performance and capacity planning and associated management tools in IBM Mainframe, OpenVMS, Unix, Windows and other environments. Greg is also the author and illustrator of the book Resilient Storage Networks. (Elsevier) and has contributed material to Storage magazine and other TechTarget publications. Greg holds degrees in computer science and masters in software engineering from the University of St. Thomas.

  • This was last published in October 2006

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