From The Expert Feature Article
December 13, 2013

Backup Pricing May Never be the Same

There is a backup war going on and it is just as much about pricing as it is product. Gartner (News - Alert) is covering all this action as you might expect, and one Gartner storage analyst has more than a few things to say.


We’ll hear from Gartner’s Dave Russell and put his words in the context of the entire goings on in backup pricing, especially as it relates to the cloud.

Backup, as it moves to the cloud, changes insofar as how it is licensed. Instead of buying packaged software and a bunch of disks, the cloud ushers in usage and subscription-based pricing. While the CAPEX is now nearly naught, IT shops aren’t always keen to keep on paying and paying.

And with storage, usage-based pricing means you are paying evermore since storage volumes always go up, and never down.

Vendors are reacting, first by lowering costs, and more recently changing pricing such as getting rid of usage-based pricing which is what Asigra is moving towards. But this all means terrible inconsistency. “In addition to making the cost of backup challenging for all parties to feel like the right cost and the right value is being exchanged, there is the even bigger challenge that every costing model that I have ever seen can be highly variable depending on the specific environment and implementation,” Russell argues. “At one point, charging for backup agents was common. This meant that a larger server with more storage, even if that model of server (e.g. an 8-way Solaris machine) had a larger cost.  Fast forward many year, and the proliferation of virtual machines started to force changes in backup licensing, with things like “per socket” charges or “partial server pricing.”,” he concluded.

The move away from agents, in this cloud era, was a move towards volume or usage-based pricing. This all sounds good as this usage model often includes premium features to handle your volumes. And you dispense with all those pesky agent charges.

But one of the ongoing rubs is that backup is not a productive function, but rather a form of insurance, one that IT often loathes paying. But Russell believes IT should believe in this value. “The reality is that there is value in insurance, and backup, even if you don’t restore.  What!  How?  Well because you know that you safe and can remediate against the “disaster” no matter how localized or broad that is may be, and this security and ability to continue operations has real benefit, even if not utilized.”

While IT needs confidence in its backup vendor, the more pressing issue is cost, at least that’s what Russell argued three years ago. And the same is true today, he still believes.

“Back in August of 2010 I published the cost was the #1 reason that people switched backup vendors.  Typically this is maintenance cost.  I concluded this after examining over 2,500 end user data points.  I recently concluded a more ambitious view that looked at five years’ worth of data and concluded the same thing.  In fact this year I updated a predication that “Between 2012 and 2016, one-third of organizations will change backup vendors due to frustration over cost, complexity or capability,” he said.

One of the biggest bugaboos, and the one tackled by Asigra is usage pricing. Storage is not an exact science. How do you predict what you’ll need in the future? And if you can’t do that, how can you predict costs?

Russell latched onto the Asigra move. “This summer one backup vendor, Asigra, introduced a new backup pricing model. This model that has a smaller base charge, but charges on successful recoveries performed,” he explains. “Gartner expects that the industry will begin to pressure backup software vendors for lower costs at larger backup volumes to avoid the similar issue where backup appliances become viewed as cost-prohibitive when broadly deployed.”

IT and partners are already weighing in, with one commenter tackling the IT angle. “The same pricing changes are going to continue to hit the MSP providers too. With the birth of cloud “everything” their traditional pricing models are falling apart. I’ve seen some begin to adjust but many more just have their heads in the sand,” noted JD Helms.

Another talked in terms of pure value. “At the end of the day, the value perceived must be as great or greater than the total expense in any transaction (including backup), and there is value in knowing that you can protect your data, even if you don’t have to restore often, but the costs need to match the benefit, and each organization must determine this for each class of data” the commenter said.

The Asigra Approach

Asigra got a lot of notice when it moved much of its fees away from backup volumes to what is actually restored. And shops with stable servers and reliable primary disk backups benefit the most from this scenario. Asigra is now pointing to research to back its approach. The company points to a study by Winning Research of more than 160 IT pros. The results demonstrate the fear, uncertainty and doubt over backup pricing.  Here is some of what Winning found. “90 percent of survey participants expect the cost for backup and recovery to go up over the next five years. As a result, there is willingness-to-switch to recovery-based pricing, showing that fear of cost growth is a strong motivator to make the switch,” the research noted.

In Asigra’s favor is the finding that 84 percent of those polled would switch over to recovery-based pricing if they lost no features. Of course, a pricing scheme is different than pricing itself. As storage hardware costs plummet, vendors can offer lower and lower and lower usage-based fees, which could make the argument mute. And a liberal use of deduplication makes these usage costs all the lower.

Asigra thinks its model is the wave of the backup future.  “Pricing alternatives for technology have evolved significantly as cloud computing has taken center stage. The need for change in the pricing of software and software-based services has finally come to a point where users are more educated on the topic and demanding that pricing be aligned with business value,” said Eran Farajun, Executive Vice President, Asigra. Asigra’s Recovery License Model is a leap in this direction, providing immediate value that scales as data volumes grow. The Winning Research study highlights the demand for such a model which is in line with feedback we receive from our partners and customers."

Edited by Stefania Viscusi