My chat with Erik focused on how to successfully price and package a backup and disaster recovery (BDR) offering for the end-user market. I really enjoyed my discussion with Erik, because he bucks a lot of the conventional wisdom in the market today.

Here are Erik three pieces of advice to any MSP looking to grow and thrive with BDR services:

1.  Start with a discussion about their tolerance for downtime; don’t sell speeds and feeds

Many IT consultants and budding MSPs got their start as technical people. In the sales and marketing process, unfortunately, these folks often lead with the speeds and feeds or technical advantages of their service offerings. This is a huge mistake. Doing so focuses the conversation on costs to the client, rather than the value created by a managed service. More importantly, leading with this approach misses the main concerns of any business owner or C-level executive. At the end of the day, decision makers care about three things: driving revenue; reducing costs; and reducing risks. Erik reinforced the need for a consultative, question-based sales approach with the decision maker that focuses on their tolerance for the risk of downtime and the real potential costs of downtime to their business.

The whole point of a BDR installation is to reduce the likelihood of a computer outage and the resulting business costs when things do go wrong. Erik recommended using Microsoft’s Assessment and Planning Toolkit [http://www.microsoft.com/download/en/details.aspx?id=7826] to walk the client through a discussion about their business and its unique needs. If done correctly, the smart salesperson spends all of their time asking open ended questions, listening, and letting the client articulate the harm that will occur to their operations, sales, relationships, and reputation if there is every any form of computer downtime. The conversation should focus on the client’s own business and their needs and how they operate and utilize their technology to serve their customers and grow. The key part of the dialog is to ask the client in various scenarios about their tolerance for downtime. How many minutes can their email system be down? How would they sell if their VoIP phone system failed? It is also important to ask a series of questions about what they think an hour of downtime would cost. Naturally, understanding the economic costs of downtime to the client positions the MSP perfectly for showing the tremendous value and return on investment of a BDR service.

2.  Unbundle and thrive with a la carte add on services

In designing a service offering, there is always a natural tension between simplicity on the one hand and customer choice and customization on the other. There is a strong trend in the managed services space to create monster, all-you-can-eat bundles to simplify the selling process. For example, a managed server offering may include everything under the sun, for a single price. There are advantages to bundles, but there are big dangers as well. In Erik’s view, too many partners are adding too many features, commitments, and labor intensive options to their base BDR offering and thereby increasing their future labor costs and reducing their ongoing operating margins.

Erik recommended a different approach where the client is offered a base package that just covers the basics of the solution and nothing more. In the case of the BDR, this means Erik’s base offering includes the BDR appliance (“standby server”) as a part of the service; the software to do the server imaging; and the ongoing backup to the cloud, but nothing more. Massive data growth that consumes more cloud storage comes extra. Recoveries in a big or small disaster come extra. Monthly or quarterly testing comes extra. Recovery in the cloud comes extra. The idea is to have a base offering and then several additional a la carte offerings which can be layered on top to drive more recurring revenue; drive special one-time professional fees; and cover the potentially labor-intensive tasks with additional revenue streams. The result should be a highly profitable core offering, along with enough flexibility to meet the unique needs of clients, while avoiding the bad habit of giving away valuable features and add-ons for free.

3.  Begin with the end margin in mind

If a partner follows the two steps above, they are halfway there. The way to guarantee that BDR becomes a partner’s most profitable offering is to plan ahead; begin with the end in mind; and sharpen your pencil on the planned gross margins. For Erik, his company’s blended recurring gross margin is over 75%. To get there, Erik starts by looking for a reasonable and predictable gross margin on the core offering. In Erik’s case, he takes his core BDR costs form eFolder and triples them, resulting in a 66% recurring gross margin. In the case of the extra storage costs many clients will face, he quadruples his wholesale cost, resulting in 75% gross margins.

These margins are predictable, because his wholesale costs from eFolder are fixed and he has pushed the less predictable labor costs into the add-on service offerings. To further ensure his success, the margins on his other add-on services are even higher, upwards of 80%. Blend all these together and he has +75% margins. In Erik’s view, there should be no shame in high margins. These margins guarantee his success and drive sufficient cash flow for his business to run a strong and high quality operation that keeps its promises and commitments to their clients. If the clients want a cheap and fly by night partner, they can search elsewhere. The key takeaway is to start with a margin goal in mind and craft offerings that will yield predictable, high margin revenues.

If you are not yet deploying eFolder BDR, every qualified partner can request a free trial by going to www.efolder.net/join or calling 800-352-0248.

]]> http://www.efolder.net/blog/uncategorized/three-secrets-to-pricing-and-packaging-your-bdr-offering/feed/ 0 http://www.efolder.net/blog/backup/three-myths-of-cloud-recovery-revealed/ http://www.efolder.net/blog/backup/three-myths-of-cloud-recovery-revealed/#comments Wed, 28 Mar 2012 17:11:21 +0000 Ted Hulsy http://www.efolder.net/blog/?p=280 . . . → Continue reading Three Myths of Cloud Recovery Revealed]]> MSPs face a continual series of make or buy decisions. One decision before most growing MSPs is how to deliver disaster recovery in the cloud. Server image backup is a must-have offering for clients. Fast, on-site recovery takes things to the next level; most partners are able to commit to fast server recovery by deploying a BDR appliance to the client’s location. This BDR appliance serves as a local storage point for the server images and steps in as a standby server in the case of an outage of some kind. Virtualization technology enables the fast recovery of the servers on the BDR appliance.

But what happens if the client location is totally wiped out in a natural disaster or fire? MSPs need to offer a disaster recovery location where the servers can be brought up in the cloud and run just like the production servers to keep clients up and operational. Unfortunately, there are a lot of misconceptions about the costs, complexity, and capabilities of many cloud recovery vendors. Here are three myths deconstructed.

1.  Cloud recovery requires large upfront investments.

There are two high level options for partners: build your own disaster recovery private cloud environment or buy access to a public cloud recovery service. MSPs who have shopped these choices soon discover that the investments required can be large. Building out your own colo requires large capex and labor expenses, to say nothing of the required technical expertise to do it right. Other options are partnering with a public cloud service provider. The catch is many of the public cloud service providers require the MSP to make a large financial commitment upfront, in order to gain access to the cloud recovery feature. For instance, one service provider requires the MSP to commit to 1 TB of annual storage, billed in monthly increments of $680 dollars per month. Whether or not the partner has enough client data to utilize the 1 TB of storage, the bill comes due in month one. And under this plan, there is a minimum one year commitment or a minimum of $8k per year.

There are other choices on the market. Learn more about them below.

2.  Cloud recovery costs more, every day of the year.

The ability to recovery client servers in the cloud is a killer app for managed services. It allows MSPs to commit to very stringent SLAs and command premium pricing from clients. But the key to managed services profitability is to make big, real, and deliverable promises to your clients, without getting eaten alive on fixed and variable costs. Many of the public cloud vendors want MSPs to pay a higher per GB fee for every byte of data backed up to their cloud environment. Many of them advertise the cloud recovery capability as “free,” but there is no free lunch, as they say. In most cases, the cloud vendor extracts a higher per GB fee every day of the year for the ability to recover servers in the cloud, even if this capability will only rarely be used.

There is a different way to price and package cloud recovery for partners. Learn more about them below.

3.  Cloud recovery only supports simple network configurations.

MSPs need to be able to recover client servers in the cloud with full functionality, connectivity, and access. Though running virtually, the servers and applications need to run just like they did in the production environment. Secure remote access and performance needs to be seamless. Reconfigurations of VPN credentials on employee endpoints or VPNs at other locations should not be necessary. Unfortunately, many cloud recovery suppliers only provide limited networking and remote access options to the recovered servers in the cloud. The lack of robust virtual firewall and networking features can be a serious drawback with cloud recovery.

There is a different approach. Learn more below.

eFolder Continuity Cloud is an add-on service to eFolder cloud backup solutions, including eFolder Backup, eFolder ShadowProtect BDR, and eFolder AppAsssure Cloud. eFolder Continuity Cloud enables eFolder partners to provision a cloud recovery node at eFolder on an emergency, as needed bases only. The Continuity Cloud allows partners to recover server images in the cloud, run client servers virtually, and deliver business continuity and disaster recovery services. eFolder does not require large upfront financial investments to access the service. For instance, an eFolder partner may access the Continuity Cloud if they have only a single eFolder ShadowProtect BDR deployed. eFolder only charges for the service when the partner needs it, in one calendar week increments. And eFolder delivers a virtual compute node to each partner, complete with rich virtual firewall and VPN configuration options. These advanced networking features allow partners to simulate the downed client environment completely, without cumbersome reconfigurations of remote sites and users.

To learn more about the eFolder Continuity Cloud, check out a recent webinar with eFolder partner Dave Watts from NetFusion. Webinar on demand.

Wholesale pricing is available upon request. Interested MSPs may join the eFolder Partner Program by going to:
www.efolder.net/join

Here are Lloyd’s tips:

1. Stay flexible for small clients
   • A full BDR solution backs up server images; includes an on-site appliance for storage and server recovery; and backs up the images to the cloud. However, some small clients don’t need or can’t afford the total solution. Partners should not approach the small business market with an “all or nothing” approach. Rather, it is important to tailor the disaster recovery solution to the client’s real budget and needs. Many small businesses may not need an appliance for on-site recovery. Simply put, they have longer Recovery Time Objectives (RTO). They would rather be out for a few hours than spend a few thousand dollars more for a BDR appliance. eFolder supports an alternative deployment scenario for clients like these, called the eFolder ShadowProtect Cloud. In this deployment, the client gets best of image backup and cloud backup, but there is no BDR appliance included.
2. Stay current with the latest software versions
   • In many cases, software developers will supply their products to other vendors under OEM deals. For instance, eFolder BDR utilizes StorageCraft ShadowProtect software. These deals are fine, unless you are acquiring your licenses through one of the OEM partners and they are forced to supply “back rev” versions of the software, usually to protect the retail distribution of the developer. Being stuck on a previous version means that the deployment of critical features gets delayed, generally driving up an MSP’s costs and labor burden. Lloyd recommended all partners to double check this key item with their vendor. eFolder has contractual relationships with StorageCraft and AppAssure, guaranteeing access to the latest versions of their software.
3. Look out for silent data corruption
   • Nothing can ruin a client relationship than lost data. Even when cloud backup and replication systems are employed, not all cloud systems are created equal. The fact is, if a partner is using cloud backup with a vendor operating at petabyte scale, silent data corruption will occur and the vendor must have systems to detect and automatically correct it. If a cloud backup provider doesn’t specifically address the silent data corruption problem and address it at every level of their system, your data is not safe. Lloyd recommended that all partners ask their vendor about their process for proactively ensuring data integrity.
4. Exchange granular recovery
   • BDR solutions can help an organization recover from a server outage or site-wide disaster. However, it is the everyday disasters that happen more frequently and chew up needless man hours. The granular restoration of lost or corrupted Exchange items, such as mailboxes and emails, usually just adds extra labor cost to a managed service contract. Partners need to be able to quickly and easily restore individual Exchange items. Lloyd recommended that partners treat Exchange granular recovery as a table stake item – a “must have” for any robust BDR offering.
5. Continuous innovation and improvement
   • The BDR market is highly competitive. Lloyd recommended that partners work with a vendor that will continually innovate and deliver new technology. Lloyd has had great success working with eFolder’s product development staff to bring new innovations to market, such as the soon to be announced eFolder Continuity Cloud. The vendor partner must not only innovate on the technology front, but in the business model arena as well. Vendors need to help solve the technical challenges of clients, while enabling the partners build a robust and profitable recurring revenue stream.

To view the whole webinar, check it out on YouTube:
Webinar: Five Ways to Reduce Your BDR Support Costs

Our web portal has long been overdue for a comprehensive overhaul. It’s been a long time in coming, but we feel you will not be disappointed!  Can’t wait to try it? Login here. Here’s a quick preview to keep your interest:

Now, here’s what we set out to accomplish:

Death to horizontal scrolling. Our own #1 complaint about the old interface (and we’re 100% sure it’s your #1 complaint too) — the account list had so much information you had to constantly scroll horizontally back and forth. It’s the virtual equivalent of fingernails on a chalkboard. Horizontal scrolling might work for some sites that foster an edgy design and don’t also scroll vertically (some examples), especially if the mouse wheel still works. But scrolling in both directions? Few things are worse torture.

We avoided horizontal scrolling in our new design by organizing different kinds of information into 4 “views,” each suited towards specific work tasks. Account Details, Contact Information, Resource Usage, and Account Status. You can instantly switch between these views without having to wait for the data to reload. Voila! No more finding-that-tiny-horizontal-scrollbar pain, and without any extra waiting time from additional page loads. You can have your cake and eat it too.

Optimize use of screen space. This one goes hand in hand with the previous one. Since there truly is so much information, it has to go somewhere. Sometimes you need to see it, sometimes you don’t. Enter the account details pane, which is docked to the bottom of the browser window. To show the details pane, double click an account, or right click and choose “Show/Hide Details.” While it’s visible, the information in the pane automatically populates as you change the currently selected account, all without having to talk to our web server, for lightning fast access to information. When it’s hidden, it stays out of your way, so you can get the most out of your screen trying to view all those accounts you have.

No page reloads. This is considered one of the hallmarks of a true “Web 2.0″ application, so we need not go into too much detail. Suffice it to say, the new web portal is AJAXian to its core. ‘Nuf said.

Support all browsing styles and allow easy copying of hyperlinks. When you follow a hyperlink on a web page, do you prefer to see it in the same window, a new window, or a new tab? We’ve found users each have their own style of “browsing” — there is no correct answer. Many modern web apps obscure their hyperlinks by directly putting javascript as the target of the link, breaking things horribly if you right click and choose “Open in new window” or “Open in new tab.” Such impolite behavior also prevents you from easily copying the hyperlink and sending it to a co-worker.

The #1 offender in my opinion? Google. Ever try to right click a link in a Google search result and email the link to a friend, only to find the URL is 4 lines of text? Seriously, why should a search result for www.efolder.net become something like http://www.google.com/url?sa=t&source=web&cd=1&sqi=2&ved=3CGYOFjAA&url=http%3A%2F%2Fwww.efolder.net%2F&ei=AGBtTej5PMG88geco6iPQC&usg=AFQjCKDeqlQ7WP-vSwpDp43R5H4HI2d3aE ? Come on Google, you love simplicity; why obfuscate your URLs?!

The right thing to do? Let the target of a hyperlink be the true destination (that works in a new window or tab), and if you need special behavior in your web 2.0 app, put the special behavior into an onclick JavaScript event. Worried about losing functionality for non-JavaScript browsers? (as I’m sure Google must be) No problem! Let the hyperlink target be the obfuscated / complex URL, but then use a little javascript magic to change the hyperlink target as the page loads back to an unobfuscated URL (and rely on a JavaScript onchange event).

Our previous web portal was careful to follow this design rule, and we made sure that despite the richness of the new user interface, we wouldn’t force our users to live through “URL hell.” For example: when you left click on the View Remote Backup Log icon, it will show the latest log within an embedded log viewer (2.0 style!). But you can still right click and choose “Open in new window” or copy hyperlink and it will do the right thing. We try hard not to get in your way.

Easy account creation. Click the add account button on the toolbar, and up pops the new create account wizard. It’s easy to create a new customer, or add accounts to an existing customer. It guides you through step by step:

Edit multiple accounts at the same time. Some of our partners manage hundreds or even thousands of accounts. Updating certain settings individual for each account by hand becomes mind-numbingly painful and a waste of time. Doing this in the new web portal is easy. Select one or more accounts that you want to edit, right click, choose an action, and it will perform the action on every selected account. Especially common scenarios: updating a notification email address, converting one of many sub-accounts into the new parent account, and changing the account service plan. Any action is supported.

The system is smart enough to only perform the action for the accounts where it would make sense to do so. For example, if you selected all of your accounts, but then performed the “Extend Expiration Date” action, it would only actually perform the action for trial accounts, not billable accounts.

Ease pain of timed automatic logouts. Ever go through the account creation form and almost finish, but then get interrupted by a long phone call, only to come back, click submit, and be told you have to login again and fill out the form again? Yeah, we’ve been there. In the new web portal, when you submit any action, if you’ve been logged out due to a timeout, it will show a modal dialog allowing you to login, and then it will let you try again without reinputting data if you wish. Or if you don’t want to login again just yet, just click cancel, and you’ll be taken back to what you were doing (with all form fields intact, etc.):

Use dialog windows for complex tasks. In the previous web portal, certain actions (like changing the mailing address associated with an account) required impersonating that account, choosing the correct location from the top menu, performing the action, and ending the impersonation session. We’ve eliminate the most common reasons to impersonate an account through dialog windows. For example, here’s the window to edit the details of an account:

Avoid obscure text hyperlinks (like [S]). There sure were a lot of these obscure bracketed text-style hyperlinks in the old web portal. Once you got the hang of them, they made enough sense, but for new or returning users, it’s not always obvious. And waiting for the tooltip to popup to explain is annoying. Now, all actions to manipulate accounts are organized into the context menu. Just right click and choose the command.

Avoid commands that jump to another part of the page. In our previous web portal, commands that required additional input would jump down the page a ways and ask for additional input (e.g., select the service plan from a list). For example, if you now choose to change the service plan, here’s what will popup:

Automatically convert units and common date formats. Users shouldn’t have to remember if a field expects a value in MB or requires that a date be specified in YYYY-MM-DD format. In the new web portal, you can type “1.5 gb” or “1536 mb” and it knows what you mean. And all dates are selected by a calendar pick tool.

Emphasize status. We give you lots of visual queues when something is wrong with an account, so you’ll be sure to notice. Row background colors, icons on the left, etc. For those who find all that green annoying, you can set it to only show row colors for accounts with warnings and errors. Speaking of which… When combined with our all-in-one dash panel status report, email notifications, and PSA integration (e.g., ConnectWise), you’ll always be sure you’ll know about any kind of error or warning, whether it be for online backup, local backup, email archiving, or the BDR.

Make everything customizable, and remember what you customize. Feel free to re-arrange columns (drag/drop), hide/show columns in different views, change color schemes, turn off status colors, etc. All of these customizations are saved into a browser cookie, so power users won’t have to continually retweak the interface to their liking.

We hope you like the new web portal. Access it by going to the Accounts menu and choosing Account Center:

Of course, the old interface is still accessible as well. You’ll still need that if you want to export your data to a CSV or XLS file, or if you happen to like horizontal scrolling.

We’ve just hit the highlights here; dive in, and give us feedback on your experience!

If you’re an eFolder partner reading this, you may not have even heard about DoubleCheck yet. Yes, we’ve been really quiet about it. We’ve been integrating it into the eFolder product family and making a lot of cool enhancements, to ensure that when we deliver, it will live up to the eFolder mantra of delivering services that intuitively just work the way you would expect it to, with very little ongoing maintenance required.

So why did eFolder acquire DoubleCheck? It fits well into our long-term plans for building a suite of data protection services. The technology platform itself is very scalable, modular, and efficient. And the product was built from the ground up to be focused on providing branded service through partners, so it fits extremely well into eFolder’s channel-only, fully branded strategy. While there are many email filtering services out there, you can really only count on one hand those vendors that are 100% channel-only (you know who they are). We’re applying the same recipe that has brought success to our data backup and business continuity services to DoubleCheck: services that just work, excellent support, and partner-friendly business practices. We’re aiming to make your life simpler by offering more services under one umbrella, saving you time and improving your margins.

Now on to the good stuff, here’s what’s kept the DoubleCheck development team super busy this past year:

An adaptive statistical spam classification layer, leveraging hierarchical orthogonal sparse bigrams.

My, isn’t that a mouthful! Such a phrase really deserves a blog post of its own, so look for part two of this post quite soon with the details.

To summarize, different domains and even different users within the same domain can have drastically different views of what is and is not spam. Additionally, certain companies may work in industries (e.g., medical) that may frequently receive legitimate email with keywords that could otherwise be considered spammy. This new technology provides the means to automatically adapt to the individual patterns of users, while also still benefiting from the collective pattern analysis of domains, groups of domains, and users across the entire system. Thus, if most users across the entire system consider a particular email as spam, when similar emails are received in the future, it will decide for most users that these emails are also spam, but this decision may be overridden for specific domains or individual users whose past behavior indicates they probably think otherwise. The details are quite interesting, so we’re going to post more about this.

Secure yet password-less end-user self-management of quarantine and reporting of false negatives.

DoubleCheck should be easy for end-users to use, without causing an administrative burden on IT staff and IT service providers. We view quarantined email and the ability to interact with DoubleCheck as an extension of a user’s mailbox. If a user has access to their mailbox, they should also have access to DoubleCheck (for just their mailbox). With this feature, an end-user self-authorizes their particular computer by clicking on a link sent to them in a one-time activation email. When traveling, a temporary authorization can be performed, allowing interaction from computers they don’t normally use. Administrators can also configure password authentication (integrated with active directory) if desired.

So what can an end-user do? Release messages from their own quarantine, report spams that weren’t properly identified (to help train the new adaptive classification layer), search their own mail logs, and view reports. Which features they can access are controlled by their IT service provider. End-users also interact with the system through quarantine report emails and automated reports.

Administrator-enhanced training (optional).

Administrators that want an extra degree of monitoring and control can optionally choose to have email that may be spam (but the system is not sure about) to be BCC’d to an administrator address. The administrator can train these messages as spam or as clean in bulk by forwarding the messages to specific trainer email addresses. Many end-users will not want to use this system, but it’s available for those power users that insist on keeping a close eye on email in the “grey area.”

Additional real-time global spam insight and analysis networks.

We tap into analysis networks that process billions of email every day, allowing us to react to new global spam patterns within seconds. Reputation information of different elements is based on a number of real-time data sources, including honeypots, proxypots, known botnets and zombies, open proxies and relays, domain age, domain registration characteristics, and patterns of user-reported spam from those participating in a global spam feedback system. DoubleCheck had partnerships with global networks prior to 2010; however, we’ve added to our network and formed faster data synchronization links, improving the quality of the data. Additional networks were selected based on our quantitative analysis to best broaden our coverage of new areas and new types of spammers.

Real-time classification of hyperlinks in emails.

Most unwanted email includes one or more hyperlinks, referring users to sites that sell contraband, host phishing attacks, or host malware to attack visitors. We leverage our partner global anti-spam and anti-malware networks to scan every hyperlink in every email and block those known to be undesirable. Partnering with the right networks gives us as much reach and visibility into global spam patterns as any of the larger anti-spam filtering vendors.

URL de-obfuscation to unmask the true website a spammer is linking to.

Spammers go to great lengths to hide their “payload” (links to websites, images, advertisement text) from automated classification systems yet still have them be visible to users reading the spam. One such technique is to use URL shortening services one or more times to make a link to a malicious site appear benign. For example, http://bit.ly/YZL will actually redirect a user to http://www.google.com/, but could just as easily have redirected a user to a malicious malware or phishing site. DoubleCheck automatically unshortens URLs from dozens of known shortening services. (We’re adding more all the time.) We then analyze the reputation of the final target URL. We’ve also identified additional ways that spammers abuse these services and block messages with such abusive links.

Auto-whitelisting.

DoubleCheck performs both inbound and outbound filtering of email. As such, it can detect who users communicate with on a regular basis and ensure that email from these people are always allowed through. However, it is carefully implemented so that spammers cannot easily spoof the system and exploit this feature. Even if a spammer spoofs the return address of someone a user regularly communicates with, this alone is not sufficient to activate the auto-whitelisting entry. That being said, our system is smart enough to still recognize email from legitimate senders even as their location changes or as they send email from different sources (their office and their phone). This provides the best of both worlds, ensuring users receive the mail they want, while keeping the spammers out.

Under the covers.

Lots of effort was spent by the team adding smartness throughout the system to further increase reliability and self-healing. Full text log searches got a lot faster (10x faster or more in some cases). And backend classification performance improved by up to 10x as well.

In conclusion.

Whew! Are you still reading? Lot’s of exciting things are planned for DoubleCheck in 2011. We’re gearing up the sales and marketing engines. If you’re an eFolder partner, ask your sales rep about how you can save money through our multiple services loyalty discount.