Perhaps one of the more noteworthy announcements from the Asigra partner summit this week in Toronto is the revelation of a new pricing model aimed to disrupt the entrenched backup and storage profession. This new model called the Asigra Recovery License Model (RLM) gives organizations the option of selecting a fair pricing model based on how little they recover. The model is enabled by technology and follows what many experts agree is an evolving movement toward performance-based pricing that aligns with the value derived by the customer. In many ways, this is precisely what many MSPs have been doing all along by getting away from billable hours and shifting to pricing models that promote alignment with the customer.
In terms of the economics, this pricing change could force other backup storage vendors to rethink their own approaches to pricing, including the big public cloud vendors like Amazon. While Amazon and other storage vendors have steadily decreased their prices in attempts to increase market share, the Asigra model turns this approach on its head. The concept is to stop viewing backup as a commodity and start looking at the recovery of data as the real value. I certainly applaud anything that helps MSPs accomplish this goal.
With this approach, fees are based on a Recovery Performance Score that is calculated over a 12-month period (every 6 months in the first year). This allows customers who recover less to pay less, and costs are capped so customers never pay to recover more than 25% of their data which provides predictable costs.
If this model seems counterintuitive, it shouldn't; it's the same billing concept that has worked for MSPs for over a decade. If break/fix VARs used to profit from customer downtime then the economic shift to profiting only when customers experienced uptime exemplified a realignment of customer values with the MSP. This is precisely what Asigra has done with their RLM model. By changing costly backup strategies to pay not for increases in storage but instead the recovery of data, MSPs are now more aligned with their customers than before.
“Across the technology spectrum, more vendors are moving away from established pricing models to alternatives based on performance and overall value,” said David Farajun, CEO, Asigra. “The backup and recovery market now enters a new era to address the industry value proposition on data recovery…not backup. The Asigra Recovery License Model introduces a very clear pricing differentiator based on recovery that provides both immediate and long-term value to the customer on a significant scale.”
A lot has changed within the managed services universe this year. It seems only logical that Asigra would take this opportunity to challenge the status quo and change the backup storage industry by beginning a pricing revolution that actually can help MSPs sell more effectively into their customers.
