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New disaster recovery pricing system bases charges on how much data is recovered, not backed up

Brandon Butler | July 11, 2013
Asigra offers performance-based pricing model for disaster recovery services.

There's a dirty little secret in the disaster recovery industry, according to Dave Simpson, who tracks the storage market for the 451 Research Group. Usually, customers require less recovery than industry vendors make them believe, he says. But vendors charge customers based on how much data they back up, when in reality it's rare for an organisation to require a complete recovery of all its backed up data.

Disaster recovery and backup software maker Asigra introduced a new pricing system today that changes the traditional model by charging customers based on how much information is actually recovered annually, not just how much is backed up.

The new Recovery Licensing Model (RLM) which the company has a patent pending for introduces a performance-based pricing model for the DR industry, which other industries have already seen. Instead of buying music albums, iTunes now lets consumers buy individual songs; some auto insurers charge customers based on their driving habits using in-car monitors; cloud computing has ushered in pay-by-the-hour virtual machines for rent.

Asigra's RLM pricing model works similarly: Customer pay based on the amount of data they recover. Customers with resilient,fault-tolerant systems that require less annually recoveries pay less than customers to have frequent recovery events. The pricing structure is capped at 25% of backup costs and each customer's single largest annual recovery is waived.

Each customer is provided a Recovery Performance Score which dictates their payment. If customers recover less than 5% of their data in a year, they would pay $0.167 per GB per month; customers recovering 25% or more of their data annually would pay up to $0.50 per GB per month, according to Asigra list prices. Asigra sells mostly through channel partners though.

"There is no value in backup up, only in recovering," says Enterprise Strategy Group analyst Steve Duplessie. "By charging based on recovery versus what every else has always done — charge you for backup — they are aligning the cost with the actual value."

Simpson, the 451 researcher, says the model has the potential to be disruptive, if Asigra competitors like Symantec, IBM, BMC adopt the model as well; otherwise, it will be a market-differentiator for Asigra and its partners. For most customers, he believes it would likely save them money compared to the traditional model if they have a lot of data to back up and few large-scale recoveries.

 

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