As margins shrink for selling data storage, the founder of the Canadian backup pioneer advised that IT services providers build practice areas around backup and disaster recovery, and related consulting.
Omry Farajun first got into the online storage game before there really was much of an online storage game to speak of.
When he launched Toronto-based Storage Guardian in 1999, Farajun recalls how converting a sale meant convincing customers in the value of backing up data remotely and digitally.
“That was the big pushback to online backup: ‘Oh, I have a tape drive and that’s good enough for me,’” he said. “Fifteen years ago it was hard to convince companies to back up their data.
“We’re one of the original SSPs – storage service providers.”
Farajun recognized from the start that his fortunes would be linked to those of IT services providers.
“When I started this business, there was really not much of a market,” he said. “Protecting data was very small in terms of what critical data there was or the management of the data.”
“Very early on, it was good to align myself with IT consultants and forward-thinking companies that wanted to do managed services,” Farajun went on. “That was the way to go to market.”
In those days, Storage Guardian’s online backup was a premium product, intended for early adopters and other well-resourced customers
Farajun priced the data storage at $50 per gigabyte.
Fast forward to 2017, and the right price for that same data storage has fallen much closer to $50 per terabyte, the CEO said.
“It became too cheap,” Farajun said. “There were startups that wanted to take market share and they didn’t care about fundamentals.”
“On a daily basis, we get legacy customers that will ask ‘will you match this pricing,’” he continued. “Ridiculous pricing with no fundamentals, that’s what we’re seeing now.”
Farajun questioned the ease by which some new players are jumping into the storage business.
“There’s low cost of entry to protect data, with no certifications,” he said.
As the market for data storage has changed, so too, has Storage Guardian continued to evolve its products.
The firm operates data centers in Toronto; Montreal; El Paso, Texas; and Buffalo, New York.
One of the data centers contains workspace for several hundred employees, which can be made available to customers whose own facilities are knocked offline by a disaster.
In addition to backup and disaster recovery (BDR), Storage Guardian provides disaster recovery as a service (DRaaS) and analytics.
Last week, the company announced an integration with ConnectWise Manage, allowing IT services providers to more easily offer a full suite of automated BDR services through that platform.
The integration enables automated billing and a new feature that auto-resolves tickets that are unnecessarily created during backups.
“The number one request we hear from MSPs was to find a way to drastically reduce the number of non-necessary alert tickets in their systems,” Farajun said in a statement announcing the integration.
“We listened closely and found a way to meet this need with our new self-healing ticket functionality,” the statement continued. “Open file alerts that do not require a technician’s attention are automatically resolved and closed, eliminating unnecessary tickets that clog an MSP’s help desk and divert attention away from more critical issues.”
Farajun said he doesn’t fear the presence of new dominant storage companies entering the market.
In fact, he welcomes it, suggesting it adds steam to demand for cloud storage.
“Anybody that moves the market, like a Datto, can only be good for business,” he said. “Everybody benefits from it.”
The storage business is also changing for MSPs, resellers and the other businesses among Storage Guardian’s more than 1,700 partners.
Instead of relying on margin from reselling storage, IT services providers should look to profit off of business continuity expertise, Farajun said.
“I think that a more modern way of looking at it is, absorb the cost and add a value service from a managed service provider: (DBR) drills, testing the recovery, orchestrating the recovery,” he said.
Farajun frequently refers to RTO, or recovery time objectives, as key to the MSP’s storage service offerings.
“We’re managing expectations of their recovery time,” he said. “With the virtual disaster recovery in the cloud, how quickly do you want to have the service spun up?”
“That translates to more meaningful discussions,” Farajun said. “When you have those discussions with your customers, there’s more chances for better profitability.”