What if a data backup and storage provider charged its customers for recovering the data, and less for backing it up in the first place? A Queensland, Australia-based reseller called LiveBackup is doing something similar, and it is not the only one.
Todd Brooker, sales director at LiveBackup, told trade mag CRN Australia last month that for its customers, a lower need for restore services can win them a discount of up to 50 per cent of their backup costs - worked out and credited every 12 months.
"The whole idea of this model is to reward good behaviour," he said. "Every 12 months we review and see whether our customers are following best practices and [if they are] then they are rewarded with a better rate."
In that country, backing up 1TB normally attracts a charge of A$1,100 (￡610) or so per month, he said. So firms are especially keen to save.
As it turns out, LiveBackup is one of a global network of services provider partners of backup and recovery software vendor Asigra - a company barely known even a year ago that is swiftly making a name for itself.
Asigra to an extent might be said to have turned the traditional per-TB pricing model for backup on its head, and partners are following.
Eran Farajun, executive vice president of Toronto, Canada-based Asigra, says its patented Recovery Licensing Model was introduced in July last year after about two years of thought and development. The benefits are available to all its partners of its channel-only business.
"The first problem is around the growing cost of backup and recovery. People who pay for backup and recovery software primarily pay for how much they are backing up, and they have to make more backups and store more data, so it is constantly growing as data volumes increase," Farajun says.
"Customers are basically going to vendors and the reseller channel and having to beg at the end of every quarter and year, because they don't have any more budget but they have even more data."
Vendors and resellers then offer discounts, and the discounts can be deep and long lasting. This is clearly not a sustainable situation for any of the stakeholders.
Also, it's about fairness - a company that dotted its ‘I's and crossed its ‘T's when it comes to backup can end up paying just as much or more than one which has been careless, perhaps subsidising the latter's expensive restore requests.
"So we decoupled the cost of backup and recovery," Farajun says. "We split them into two licences, so we have a price for backup and a price for recovery and you buy them at the same time."
Recovery prices are adjusted according to usage data harvested and processed using Asigra analytics, on a year-by-year basis. "You recover less, you pay less," he confirms.
Adaptations to backup pricing have been considered by many but Asigra's model thus far stands virtually alone in the market. It has about 60 channel partners in the UK currently, including distributor Zycko, and more resellers are welcome to contact the company.
"The sign on our door is in neon, and it is open. And we are happy to license the model," says Farajun. "That's if you want to run and operate your own backup services, or if you're not a services provider and you're a software company. We would be happy to take you through the sales cycle, do a proof-of-concept and so on, or if you just want to broker the service."
Phil Bridge, managing director of data recovery, forensics and e-disclosure services provider Kroll Ontrack, says the model could indeed work, at least as applied to software. Kroll both offers its services per job, or can be kept on a retainer in case recovery services are required.
"We kind of see things both ways. Sometimes they can pay in advance, to insure themselves. A lot of our clients have to keep data for up to 10 years," he says.
Bridge notes that one problem with backup is that companies may back up but not check that the data can actually be recovered. Things can and do go wrong at any stage of the backup and archiving process, and should be considered in the first instance.
Also, the whole area becomes more complex with the advent of virtualisation, big data, and mobility, with firms continuing to take shortcuts to save money if they can.
Therefore any structure that encourages customers to do due diligence on their backup strategy can be a positive move.
"People may not see a lot of value in paying for backing up - because it is the recovery they need. So they're paying for a kind of insurance, in advance," he says.
Rod Mathews, general manager for storage and vice president for business development at internet security and storage vendor Barracuda Networks, notes that not paying for backup at all - instead charging just for recovery - fails to recognise that people can feel like they're being held to ransom.
If they've paid next to nothing up front, and are then levied a charge for restore services, they may feel cheated.
Also, it fails to recognise the capital costs that do exist - for example, for disks and other hardware, connectivity and maintenance. For that reason, a hybrid charging model such as Asigra's that recognises those facts may well work best.
"Amazon has a similar pricing model on its storage, where it's a very low cost to route the data and then they charge a premium if you want to access more than a certain amount at any point," Mathews says.
"It does cost an amount of money to operate a cloud and the value of having that cloud must be recognised when you need to restore."
The key, he says, is to get the balance right and make the margin while not "injecting any more frustration" into the data and app recovery and management process, including disaster recovery testing. That is Barracuda's preferred philosophy.
"Backup traditionally has been a bit of a hodge-podge. So we package it up and provide it through a single point," Mathews notes.
Peter Groucutt (pictured, right), managing director of an Asigra partner - infrastructure and disaster recovery services provider Databarracks - says there is a role for a pricing scale on backup versus restore lines, and it is certainly working for Databarracks' customers.
"Over the past 12 years, we have tried just about all of them - all-you-can-eat unlimited storage, pay-for-restore, through to a ‘bucket' pricing model that gives people ‘bursts' of storage," Groucutt says.
"You can charge ￡300 per TB, and make a loss on [individual] GBs. And we've seen the likes of Mozy retreat from their unlimited storage offering, Carbonite retreat from theirs, and people such as HP Upline move out of the market."
The problem is that many organisations simply cannot afford to keep paying for more and more storage, and storage providers need to make money on the products and services they provide.
So there is a place for different and innovative pricing models in the market, although Groucutt hesitated to bet
the whole market might eventually opt for an Asigra-like model.
"Nobody ‘needs' backup; everybody needs capability to restore," he says.
CRN's Nima Green caught up with Chris Labrey for a quick Q&A at CRN's recent European Channel Leadership Forum
We caught up with the Atea chief exec at CRN's European Channel Leadership Forum in London
Andy Gillett has been appointed GM for the UK and Ireland
UK is one of two countries to see rollout of vendor's newest subscription service