Arcserve thinks the new model, which is likely to be introduced on a project basis in more mature markets, responds to partner requests for more recurring revenue and the ability to grow deal sizes.
Data protection vendor Arcserve has announced a new subscription-based universal license model based on front-end Terabyte pricing. The new optional model, which is presently being tested in the U.S., Canada, and Latin America, is designed to make billing easier for customers, and to make it easier for partners to grow deal sizes.
“Data protection and storage are both going through seismic changes, around what to protect, where to protect it, and how to protect it,” said Ivan Pittaluga, Arcserve’s CTO, who joined the company from Veritas in July. “In the mid 1990s things all changed around Windows, and then Linux. That degree of change is happening again, with a growth spurt in new applications which are decentralized by nature, and thus perfectly suited for cloud protection. We have seen an amazing growth in those applications that will need protection. I came to Arcserve because it is at the right place with the right people and right mission to do these things.”
Arcserve has been using multiple pricing models, with capacity pricing being most common among larger users, and with socket-based pricing at the lower end of the market.
“Capacity licensing doesn’t have anything to do with billing,” Pittaluga stated. “The stimulus for this move was satisfying the requests we have been getting from customers more and more often, to make recurring costs predictable. There is growing user demand for subscription-based models. Partners also felt they would be helped by having more deals with predictable recurring revenue.”
The new model is based on capacity front end Terabyte pricing, which encompasses all forms of data, from any source – physical, virtual or cloud – and regardless of the number of devices. It allows for unlimited retention, unrestricted recoveries, and copies of backups to secondary locations or public clouds for disaster recovery. The subscription-based licensing will be
available now in the Americas through one- and three-year options, with an annual commitment required, It includes 24/7 enterprise maintenance and support, with response within an hour to severe issues.
It does not include usage-based billing, not for now at least, but that may be coming.
“It’s not in the road map yet, but as we test, we are also looking at true usage-based billing and seeing how that can be done,” Pittaluga said.
“The first phase is trying it out in North America and Latin America, understanding how our infrastructure will take it and how appealing it is,” he added. “We will then look at expanding it further. Service is a trend we can’t avoid, so let’s make it appealing and attractive. We have very good pricing, and can match pretty much anyone subscription license style.”
Pittaluga said he expects this option will be particularly strong in developing markets.
“We think that it will be appealing in those markets, and that in Latin America in particular it will bring people to the table right away and be an immediate success,” he said. “In more mature markets, we expect that customers are more likely to break it in on a project basis to test it out. It should appeal in those markets to those who want to restate their expenses in a more predictable way, and break it down into digestible chunks.”
For partners, Pittaluga indicated this model will have multiple benefits.
“MSPs can explain the model to customers and take advantage of the fact that the business is easy to predict and explain,” he said. “Partners talk to us about wanting to grow deal sizes, and this will help with that. It will also grow recurring revenue as a portion of their business, which is predictable and healthier. Both them and us are under pressure to show we have reasonable growth patterns, because the old high tech growth patterns are now suspect. We all have to show respectable, measurable and predictable EBITDA.”