Time for a New Backup and Recovery Pricing Model?

Eran Farajun, executive vice president, Asigra

Eran Farajun, executive vice president, Asigra

Business IT users are seeing their budgets contract even as the amount of data being created and stored in their organizations spikes. That’s putting pressure on backup and recovery pricing models that traditionally ask users to pay higher fees to save and protect more data.

New research from the Enterprise Strategy Group finds a majority of enterprises feel BCDR licensing models that charge by actual recovery events rather than the capacity for data being stored would better suit their organizations, which are under increasing pressure to cuts IT costs.

The survey of 500 financial and IT decision-makers and influencers found that 2 out of 3 feel some pressure to reduce IT spending. The motive to cut IT spending increases the need for cutbacks, with respondents from large companies being nearly twice as likely to say they feel strong pressure to reduce IT costs, ESG found.

The concerns come even as the IT decision-makers say they expect to see a substantial increase in backup and recovery purchases over the next five years due to the growing amount of data being created and stored by their businesses.

The conundrum has many organizations with burgeoning critical business data stores looking to software pricing models that offer more pricing and technical flexibility, recovery-based pricing as an alternative to traditional capacity- or agent-based software licensing.

“In the backup space, both software and service vendors have competed effectively on price and market position. said ESG analyst Jason Buffington. “However these vendors base their pricing on the volume of data protected. For IT users, this means more data requires more backup servers, more licenses and increasing costs.

“Recovery-based pricing counters agent- or capacity-based pricing models, allowing users to decouple backup pricing from data volumes. In this fair pricing model, IT professionals that manage recovery more efficiently are rewarded with substantial savings over time,” Buffington said.

One vendor offering such an alternative in BCDR pricing is Asigra Inc., maker of agentless cloud-based software for backup and recovery of servers, virtual machines, endpoints, databases and applications. Rather than charge for the amount of data under protection, which can be unpredictable and ever-increasing, Asigra monitors clients and assigns a Recovery Performance Score to an organization based on the number and size of actual successful recovery events.

The approach generally results in lower and more predictable costs to the client. According to Asigra officials, the recovery-based pricing model can save an organization around 40 percent in BCDR licensing costs up front, long term savings of up to 70 percent.

“Linking value to how products and services are priced will be one of the clear metrics in how leading products are defined and selected in the coming years,” said Asigra executive vice president Eran Farajun. “In backup and recovery, there is a growing divide between backup expenditures and the value provided.

“The value of a recovery-based license model will increase as data grows and capacity-based pricing models put an unfair burden on users who recover less,” Farajun said, adding that the vendor’s alternative pricing model “a financially innovative approach that closes this gap and directly links recovery to product value.”