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What is the Best Pricing Model for Cloud Backup Services

Nov 15, 2016, 16:46 PM by Peter Ely

You Can Pay for Capacity, By the User, By the Number or Types of Devices, By the Location or By the Number of Restores. Which Model is Best?

As cloud backup and recovery services become ubiquitous, vendors and service providers are continuously coming up with unique ways to charge for these services.

Each pricing model claims advantages over the others, but trying to weigh the pros and cons of all of these options can leave customers completely confused.

So let’s dive into these options and attempt to identify the best.

• Capacity-Based Pricing

In this model, the customer pays for the amount of data they need protected. Some providers charge on the amount of compressed data (as it sits in their vault) and some charge on the amount of raw data on the customer’s own devices prior to backup. In my opinion, the compressed model makes more sense because it more accurately reflects the total storage the customer needs.

• User or Device-Based Pricing

This model is based on a fee per-user-per-month and/or per-device-per-month. It can be a flat fee or incorporate capacity-pricing as well. In my experience, however, the number of users and/or devices does not necessarily reflect the amount or quality of support required. A small but demanding customer might require much higher levels of support than a larger one. So in my opinion, this is not a sustainable model.

• Location-Based Pricing

Some vendors have introduced unlimited-capacity flat-fee models based on the number of locations a customer has. But you should be leery of “unlimited” pricing models, because there is usually a catch. For example, a company with multiple branch offices or work-from-home employees can be penalized under this pricing model.

• Restore-Based Pricing

This unique model focuses on the frequency of restores instead of the amount of data backed up. This philosophy mirrors that of the insurance industry, where customers that don’t require many data restores pay a lower fee than customers constantly requesting restores. Companies that are well-run and better protected are rewarded for their track record of fewer incidents and outages. And although this makes sense conceptually, the fine print in the pricing (just like in your insurance policies) has become a barrier to this model going mainstream.

And the winner is… the simplest model you can find!

I recently switched cellular providers because the pricing model seemed cheaper than the provider I was with — but my monthly fees almost doubled because of all the hidden overage and roaming charges!

Reading your monthly invoice and trying to decipher the fees should not be a punishing experience. The pricing should be clean, simple, and make sense. Do your homework on the service provider. Make sure they deliver a quality service and have a no-hidden-charges pricing model that you can easily understand.

Greg Onoprijenko

Regional Sales Manager, KeepItSafe

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