At its partner event, Asigra discussed its continuing strategy for keeping itself and its partners competitive in a world of sinking backup margins, including new ways to cut partners’ hardware costs and create new revenue opportunities for them.
TORONTO – At Asigra’s Global Partner Summit, the company outlined a potentially tough future for the backup software industry, where prices will continue to go down, possibly to nothing. They also outlined a comprehensive strategy to deal with this, in a way that won’t have the company and its partners begging on the streets to survive.
“The bets we are making are based on the belief that over the next 5-7 years, the price will continue to go down and there will be a shift in the investments customers will make,” said Eran Farujan, Executive Vice President, Asigra. “Those dollars will begin to shift towards replication and shorter, smaller solutions.”
Farujan said that customers will still always need backup, and that won’t go away, but that the decline of backup margins to basically nothing is likely only about 5-7 years away.
One step the company took to respond to this was made in 2013, with the option of a shift to recovery-based pricing from the standard price per GB backed up. It moved the costs from paying for backup to paying for recovery, and like the insurance industry, worked on the principle that those who incur the greatest costs – by restoring the most – pay the most. .
At that time Farujan said this would change the “race to the bottom” pricing model that even then they believed would be unsustainable. Now, less than a year and a half later, he said that the results have been incredibly positive.
“The change in pricing has superseded our expectations,” he said. “We didn’t expect the outcome to happen so soon. We gave ourselves 4-5 years to get to the point where we are now because we are taking a percentage of cash off the table. It has only taken us 14 months to get ahead of where we were before. It has had a better effect than we thought, sooner.”
The company has also followed a consistent strategy of trying to lower its MSP partners’ hardware costs. At last year’s partner event, Asigra announced a new open source-based software stack it said could replace higher-end storage with JBOD in a managed service provider’s data centre – which could cut their hardware costs in half. At this year’s event, they introduced the Asigra Converged Data Protection Appliance for Managed Service Providers, which will give partners an entrée into the archiving space, and continue to lower their hardware costs.
“We did this as a way to execute on the challenges you raised to us,” Farujan told the partner audience at his Wednesday keynote. “You asked us to help you lower the cost of the hardware infrastructure you have to buy and refresh on a regular basis.”
Farujan said the appliance meets that request.
“The cost is pretty low, he said. “Take the cost of that appliance we have created for you [which starts at under $USD 5000 per month]. “Amortized over three years, it is less than one cent per GB per month. It takes cost out of the stack you need to spend money on.”
“The relationship with Oracle is premised on lowering the operational cost for you,” Farajun said. “That’s the goal, to lower costs, not just to do business for the sake of doing business with Oracle.”
Farajun said the deepening relationship with Amazon came from both partner requests and outreach from Amazon.
“Many of you have told us you are working more with Amazon, so we looked at accelerating our relationship with them, and have become a technology partner with them,” he said. “We want to help the data sitting in AWS get backed up so you can monetize it.”
Farajun also said that Amazon came to them regarding their Amazon Workspace desktop-as-a-service offering.
“They are very serious about this market,” he said. “They came to us and wanted to partner with us because they thought we were a service provider. We said, ‘no, we are a software company, it’s our partners you want to work with’ — but we can match partners up with them.”
Farajun said they are already having dialogues with partners about this, and told partners to let their Partner Success Manager know if they are interested, and they would set up a contact.
Farajun also discussed AWS Snapshot Manager, a free piece of software they created for their partners’ customers.
“Managing snapshots around AWS instances isn’t a smooth experience because it is very command line driven,” he said. “We created a tool to give away for free to make it smoother for the customer. You put your brand on it, and it lets you say ‘we can help you with this, and can we help you with anything else?’”
Farajun also discussed some upcoming projects to benefit partners that are still some time off, one of which is object storage.
“We are not ignoring this,” he told partners in his keynote. “It’s top of mind, but its likely 12-18 months away. It is another way we will execute on our business objective of lowering your operational costs. We are taking action on it, rest assured.”
Farajun also told ChannelBuzz that while the appliance they just announced is designed for the MSP’s location, they are working on another that will go at the end-user site.
“While this one was an appliance for the partner at the partner site, and we want to see how that plays out, we are very much looking forward to releasing an appliance at the end customer location that will be competitive with ones offered by Unitrends and Symantec,” he said.