Why backup is losing your hosting business money
Backup is a crucial business operation. All companies, and even consumers, consider some form of backup. Historically it’s been a major pain point, with companies needing to purchase backup media capacity, rotate media and stay on top of all backup requirements.
What if your business is hosting other business’ content? Then backup becomes an even more pressing and urgent business need. And yet, for most companies in the hosting space, backup is still done in a traditional way — with server-side software and on-site media (tape, disk, DVDs). When customers change their data, add or remove data from their hosted content, or any other modifications, hosts are naturally expected to adjust automatically and capture any new data in their backup sets. However, customers typically must contact hosting providers to restore data. Customer service around retrieving backups is a cost center. Hosts must bear all these costs and requirements:
- Managing the growth in their media storage costs
- Managing customer support costs in backup and restore customer service requests
- Optimizing performance of backup media and operations as data volumes grow
Most hosting providers will have to pass that cost along to their customers.
DropMySite decided to take a different approach — by combining off-site storage with customer self-service. Providing this service over the Internet, and wrapping it together into a SaaS offering, backup can become a revenue and profit center for a hosting provider. This falls into the growing Value-Added Service (VAS) sector for hosting providers.
How much are you losing on backups?
Estimates for enterprise storage range from $10/GB/YR to as high as $360/GB/YR!2 When compared the global trends for disk storage pricing:
That means that estimates on a restore job come to roughly $100 USD per support incident4. Multiply this by the number of support incidents for backup restore requests per year, and the prices add up quickly.
Imagine turning that from a cost to a revenue opportunity!
Is backup a good VAS offering?
With competition in the hosting industry being as fierce as it is, every hosting provider is looking for a way to differentiate. In general, value-added services are a great way to offer a higher level of service to your customers. Higher levels of service typically lead to
ActionTec has noted that backup is a strong VAS5, and they’ve also drawn the connection that applications and value-added services boost overall average revenue per user (ARPU) for hosting providers. Creating bundles makes it easier for customers to get all the services they need in one simple purchasing decision. That’s a natural fit for hosting companies that already offer a variety of service packages, such as website hosting, email hosting and mobile app provisioning.
How DropMySite can help your hosting business
DropMySite is a leader in online backup, focused on backing up Internet content. DropMySite provides several different types of backups as a service:
1.DropMySite (DMS) – backing up websites
2.DropMyEmail (DME) – backing up email mailboxes
But DropMySite provisions backups differently from traditional models. DropMySite provides backups for the Internet age. DropMySite backs up the Internet. The goal is to make it easy to backup critical, but unpredictable data repositories.
How DMS and DME are different than traditional backups
DMS/DME Internet backups
|Backup software runs on the server and accesses local disks and file systems||Backup software runs on DMS/DME servers. There is no software to install. Backups access customer data via IMAP with one-time authentication of customer accounts, stored as an encrypted authentication token|
|Backup is written to a local medium (disk, tape, etc)||Backups are written to infinitely scalable Internet-accessible object storage|
|Backups must be rotated to preserved media||Backups are compressed and written to infinitely scalable object storage|
|Backups are not always encrypted||Backups are always encrypted in transit and on disk|
|Backups are a cost that hosting providers must bear||Backups are a value-added service that customers pay for|
|Restoring a backup is a customer support ticket||Customers can self-serve for getting access to backups and restoring files|
|Must pay license fees for backup software||Free to you; your customers pay for their backups. We share revenue.|
|Other costs are incurred for software, media, labor.||Pay only if your customers use it.|
|Backup has no intelligence||Backup provides search across data and content.|
In essence, DropMySite shifts backups from being something hosting providers have to do, and costs them money to being something that saves them time and earns them money.
DropMySite makes backup a powerful value-added ARPU boost
Hosts aren’t the only ones who need better backup
Increasingly, enterprises are viewing the Internet not only as a communication channel, but as a storage channel. Content is migrating from office documents, to online content management systems, wikis, intranets and websites. As this growth pattern continues, backing up web content is crucial. Yet, the challenge remains mostly mishandled by traditional backup approaches.
The technology behind DMS/DME/DMM
DMS & DME use a blend of open-source and proprietary components. DropMySite takes the heavy lifting of running backups away from our hosting partners. Providers specialize in hosting; DropMySite specializes in backups. Here are some key technology differentiators:
- ·All services (DMS, DME & DMM) have full APIs around them for account setup, provisioning and management
- ·Plugins for the leading control panels are available and provide full, turnkey integration and support. Over 90% of the world’s web content can be accessed using cPanel, Plesk and Parallels APS (Application Packaging Standard) plugins.
- ·APIs also include the ability to create, access and manage backups
- ·Two partnership models are available: 1) a reseller or affiliate model; and 2) a white-label and co-branding integration model using our APIs and control panel plugins
- ·DMS & DME write to object storage, such as Amazon S3 (default option). Any API-compatible object storage that supports read/write/update functionality can be integrated. So if you have your own storage solution, such as DreamObjects, JungleDisk or OpenStack-based Ceph/Gluster object storage, these can be integrated as the backup storage medium.
Summary: Backup is a great opportunity to shift from cost to profit
While necessary, backup does not need to continue to be handled in traditional ways.
linked to your hosting business as a value-added service,
represents one of the best ways to boost ARPU,
reduce costs, and increase profits.
- Computerworld; Tape versus disk: The backup war exposed; http://blogs.computerworld.com/data-storage/22114/tape-versus-disk-backup-war-exposed
- 2. IT workers estimate the cost of enterprise backup – peer estimates; http://hardware.slashdot.org/story/10/07/29/1952235/internal-costs-per-gigabyte-what-do-you-pay
- Backblaze; Farming hard drives: 2 years and $1M later; http://blog.backblaze.com/2013/11/26/farming-hard-drives-2-years-and-1m-later/
- 4. Based on normal read/write speed, and an average customer data set of 2GB, a restore job should take around 10 minutes of disk read off of tape or CD media. With fully-loaded labor rates of $70/yr, a 30 minute estimate of total labor per restore job, and a monthly storage cost of $72 for 2 GB.
- Actiontec; Apps improve ARPU; http://www.actiontec.com/products/datasheets/AppsimproveARPU_whitepaper.pdf