By Gina Roos and Michael Vizard
As part of an effort to rectify what it describes as a fundamentally broken pricing model for cloud backup, Asigra, a cloud backup, recovery and restore software provider, has introduced a new pricing model that seeks to decouple backup from the recovery process.
Instead of charging customers a flat fee based on the amount of data they back up in the cloud, the Asigra Recovery License Model (RLM) drops the cost to a nominal amount per gigabyte, and then charges customers a higher rate for recovering that data, depending on their recovery time objectives.
“The capacity license model has been the dominant licensing model in the market today,” said Eran Farajun, Asigra’s executive vice president. “Customers are paying for 100 percent recovery, and nobody recovers 100 percent of their data.
“We think that model is running out of steam. The velocity of data growth is so tremendous that customers are required to pay more for backup software as the amount of data they back up keeps growing. Backup should be a fixed cost, while recovery should be treated as a variable cost.”
Pricing for recovery should be based on how much data customers recover and how often they need to recover, he added. “Customers that don’t need to recover as much data should be rewarded for running a better IT shop,” Farajun said.
If rival vendors don’t have the deep pockets required to support that kind of pricing, Asigra would expect to pick up additional market share at their expense, he said.
“The explosion in data growth, accelerated by the growth in social media and rich multimedia content, as well as the proliferation of cloud and mobile technologies, has put increasing pressure on backup administrators worldwide to constrain costs,” Dave Simpson, a senior analyst at 451 Research, said in a statement. “Recovery-based pricing is a potential game-changer for the data-protection industry, breaking the mold of traditional backup software pricing. While this may be disruptive for some vendors, it can be a serious win for organizations under assault by growing volumes of data and budget constraints.”
However, while Asigra claims this is a revolutionary pricing model for cloud backup, Ashar Baig, a principal analyst for channel consulting firm Analyst Connection, said the new pricing model borrows heavily from practices that have already been pioneered by providers of disaster recovery services. That approach should be more effective, he said, because, from a customer’s perspective, it looks like any other low-cost insurance policy that the customer is betting they will never need.
“That’s not really a whole new approach,” Baig said. “It just looks like Asigra is going to put more marketing muscle behind it. They’re essentially telling partners they can price it any way they want.”
With Asigra RLM, fees are based on a Recovery Performance Score that’s calculated over a 12-month period—though it’s every six months in the first year. The company divided the new model into two licenses: one for recovery and one for backup.
Pricing for the backup license is a fixed cost, while pricing for the recovery license is variable, based on how much a company recovers during the year, with an upper and lower cap limit set at 25 percent. The licenses are purchased together in a 1:1 ratio.