What Factors Affect End User Pricing for Online Backup Services?

There are so many factors that help determine what your end users will pay for your service that they cannot be covered in a single article. There are emotional factors, competitive factors, financial, technical, and other factors. 

Online Backup CEO Rob Cosgrove

Rob Cosgrove, CEO Remote Backup Systems

I will discuss the technical factors. Of course the technical stuff doesn’t do you any good unless you can market it effectively. Your customers will pay for the perceived value of your Online Backup service.

Remember that the more features you offer your end users, the more there is to go wrong, and the higher your support costs will be. So, when deciding which features to expose to customers, remember to take into account your costs of supporting those features.

Many of the features discussed in this article are functions of our RBackup software. Use these technical features to adjust your marketing and sales process to increase the perceived value of your service.

Generally, turning off features lets you offer lower priced service tiers and lowers your support costs. Turning on features raises prices.

Versioning – Some Online Backup services do not have the ability to store multiple versions of client files. Yours does, and you can turn it off and charge less or turn it on and charge more.

Retention period – Increasing the amount of time you store files will increase perceived value. The cheap services usually save files for only 30 days. You can charge more for saving files longer – even offering a multi-year archive service.

Method of Retention – Will you store files for a number of days, or for a number of versions? You can do either or both.

Number of Backups per Week – Most services offer once a day backups. You can reduce your costs and your prices by offering once a week backups, or backups every weekday.

Quota – This is the amount of data you will store for a price. The public is becoming desensitized to “unlimited backup” plans that just don’t seem to really be unlimited. Charge by native file size and take advantage of the compression ratio. One GB of data for your customer can often be stored on your server as one-half GB compressed.

Backup Targets – Exchange, Active Directory, SQL Server, System State, Sharepoint – many online backup services are unable to back up these special Windows services. Charge for them. They are critical services, and business will pay for them.

Restore Time Objective – RTO is the amount of time between a loss of data and a restore to normal. The shorter the RTO, the more you can charge.

Service Level Agreement (SLA) – If you are willing to give the customer a written guarantee of your service level, with recourse for the customer (like a rebate on a month’s charges,) you can charge for it. Don’t give away your SLA.

Degree of Customization of Backups – Some RBS Partners offer a fully automated, self-service Online Backup service, managed by the end user through a website with little interaction between the end user and the Partner. Others provide a fully managed service with on-site visits and a high degree of customization for each customer. Charge more for customization.

Level of Technical Support – Can your customers phone you 24×7 and get to a live person? Will you do on-site visits? If so, charge more.

Availability of Onsite Backup and Bulk Restore – RBackup lets you offer on-site first full backups and on-site restores using a portable hard drive, significantly reducing the time needed for the first full backup, and shortening the RTO from weeks to hours. These are very valuable services. If you offer them, charge for them.

Bare Metal Restore (BMR) – If you offer Bare Metal Backup and Restore, charge extra for it. Your cost for the software is on a per-customer basis, and end users will rarely be able to set it up themselves. BMR backups are automatic, but BMR restores (by definition) are virtually always an emergency that the RBS Partner will need to handle on site. Charge a reasonable fee for BMR and perhaps even charge separately for restores, since you cannot predict how much time they will require.

Local Backup – RBackup can do local backups at the same time as online backups. It’s called “Hybrid Backup,” and many services can’t do it. You can.

Cloud Backup – RBackup can do backups to Cloud services like Google Drive and DropBox. This is called “Redundant Hybrid Backup,” and RBackup is the only software that can do it. Charge extra for it. (coming in v11.7, early October 2012)

Type of Target Computer – (server, workstation, laptop) – You can charge more for Servers, less for Workstations, and even less for laptops and personal computers. That’s why RBackup comes in three versions, and why we charge you less for each one to let you charge less.

Type of Service (personal, commercial) – Charge more for Commercial and Business computers, and less for personal computers.

Level of Encryption – RBackup lets you select from various levels of encryption, including NO encryption. This lets you charge more for higher levels of encryption.

Availability of Web Restore – RBackup comes with a web restore agent that you can post on your website. End users can restore files from your website without installing the Client software. Consider charging more for this feature, or just use it in your marketing.

Ancillary Services – For many RBS Partners, Online Backup is an ancillary service, offered as an add-on with a full managed services suite. For some, Online Backup is the primary service and you can offer other services.

Anything on the Client Locks Screen – With the Client Locks screen you can turn off many features of the Client software. Have a look at it to see how you can tailor your software for different service levels and prices.

Maximum File Size – RBackup lets you set the maximum file size that can be backed up. Consider using this feature to limit Personal accounts from backing up movie files, and setting Business accounts to Unlimited.

Key Escrow – ON by default, the Key Escrow feature allows you to securely restore your end users’ files if they forget their encryption key. You can turn it off. Consider charging for this feature. RBS will charge you $500 to do a key recovery, so be sure to charge your customers.

Delete Files from Server – Some Online Backup services do not have an interface that easily deletes files from online storage. It comes with some liability, so consider charging for it.

Number of Backup Sets – RBackup lets you optionally allow your end users to define multiple backup sets, or you can limit them to just one. Consider charging for additional backup sets.

Session Quota – RBackup lets you set a quota for the maximum amount of data that can be sent daily. Consider charging more for a higher quota.

Bandwidth Throttle – RBackup lets you throttle the backup speed for individual accounts. It just makes sense to charge more to customers who use up more of your inbound bandwidth. Consider limiting Personal accounts and running Server accounts wide open.

Keep Latest Version – This feature of RBackup guarantees that regardless the file retention protocol selected, the latest version of all files will always be available for restore. You can turn it on and off, and it uses more storage space if it is on. Your service is more valuable with it turned on.

Interface Mode (simple, advanced) – RBackup has two graphical user interfaces. The Simple interface is used most for personal and workstation accounts. It contains a small number of features when compared to the Advanced interface. Your software might seem more valuable with more features exposed. Your support costs might be lower with fewer features exposed.

Availability of the Web Manager – Some customers prefer a web enabled self service interface. Your Web Manager PlugIn gives you the ability to provide an end user portal for each user. You can also provide a portal for each company, and allow them to manage their own accounts online. This reduces your support costs.


Rob Cosgrove is the President of Remote Backup Systems, founder of the Online Backup Industry, and a vocal advocate for maintaining the highest standards in Online Backup software. His latest book, the Online Backup Guide for Service Providers: How to Start and Operate an Online Backup Service, is available online now, on Amazon.com, and at bookstores.

Remote Backup Systems provides brandable, scalable software and solutions to MSPs and VARs enabling them to offer Online Backup Services.



About The Author

Steve Roberts / http://remote-backup.com

Steve Roberts is VP of Engineering at Remote Backup Systems (http://remote-backup.com), developers of the RBackup Online Backup software platform, providing software powering more than 9,500 Service Providers in 65 countries since 1987.