Kaseya Community

Pricing/Profit

  • What strategies are people using to actually make money offering BUDR?

    When I run the numbers, it seems like a lot of work and potential liability for limited return.

    Is this a profit center for you or just a way to tie the customer closer?


    Legacy Forum Name: Pricing/Profit,
    Legacy Posted By Username: rvines
  • Strategies....liability.... hmmm

    You know that you do not have to assume any out of the ordinary liability.
    I do not warrant that my BUDR solution is fool proof or else I buy you new servers, and data, and all that jazz. It is better to have a solution than no solution at all.

    I do not warrant that the backups are completed daily and that if they are not then I am responsible.... no way.

    That is like taking liability for the actual tape medium you are backup up to. You did not manufacture it so why warrant it?


    I offer it as a solution. I make good money with it. I assume no liability for it.

    Gamer-X


    Legacy Forum Name: Backup and Disaster Recovery,
    Legacy Posted By Username: Gamer-X
  • Gamer-X,

    Please don't take offense but that is a very naïve way to run your business. Even if your contract says exactly that and even if your customers don't mind signing it while waiving all of their rights, it won't stop a disgruntled customer from suing you and forcing you to spend a lot of money defending yourself and that contract. And depending on other circumstances, agreements, e-mails, and even some verbal conversations, you could find that the contract language was undermind and is no longer valid. Then you could be forced to pay damages for the lost business from your customer.

    In our contracts, we do indeed avoid committing to any major liability if there is a failure or backups don't work. And we only commit (on paper) to damages totaling the amount of services paid by the customer. But we also carry $3M of E&O (errors and ommission) insurance so that in case it doesn't work, we're not put out of business. (FYI - E&O insurance is very different than general liability insurance).

    Rvines,

    You are absolutely correct that most backup services (we use a combination of Kaseya's and other remote backup solutions) are not as easily profitable as some would have you believe. We use it as a mechanism to remain "sticky" not to make a lot of profit.


    Legacy Forum Name: Backup and Disaster Recovery,
    Legacy Posted By Username: kentschu
  • Thanks for the feedback.

    My experience has been even if something bad happens that is not our fault, it ends up being our fault in the eyes of the client.

    There is some pricing resistance on BUDR and I appreciate your experience and comments.

    Now that I have all of these ways to keep the clients, I just need to figure out a way to make money! (Just kidding, but it does seem true sometimes!)


    Legacy Forum Name: Backup and Disaster Recovery,
    Legacy Posted By Username: rvines
  • rvines wrote:
    Thanks for the feedback.

    My experience has been even if something bad happens that is not our fault, it ends up being our fault in the eyes of the client.

    There is some pricing resistance on BUDR and I appreciate your experience and comments.

    Now that I have all of these ways to keep the clients, I just need to figure out a way to make money! (Just kidding, but it does seem true sometimes!)


    I know this is going to sound confusing, but I don't know any other way of explaining it. The client will pay whatever you make them feel it is worth.

    -Farzon


    Legacy Forum Name: Backup and Disaster Recovery,
    Legacy Posted By Username: far182
  • My powers of communication and persuasion are sometimesthwarted by my clients inability to comprehend anything but the hard costs. Unless they have had a recent disaster of course

    If you have had success in over-coming this obstacle, I sure would like to hear your pitch.

    Thanks,

    Rick


    Legacy Forum Name: Backup and Disaster Recovery,
    Legacy Posted By Username: rvines
  • Ah a good discussion. I do not take offense. I am not naive in any way regarding my BUDR solution. I do not warrant it. It is a tool. We can split hairs on the subject, but if you do your job, typically there is never an issue.

    As far as a suit goes, and contracts for that matter, Anyone can sue you for anything.... period... contract schmontract.... I protect against such things, but never worry about them at all. It is a waste of time. Typically a customer that is the "suit" type rubs me the wrong way early enough that I pick up on the fact that they are assheads, and I drop em. There are always other fish in the sea. Sorry if you are in the N.E. the asshead density/ratio is much higher there. Smile Final thoughts on that subject... life is too short to bother. I want to come to work loving what I do, not loathing going over to asshead and asshead to do some work and some ass kissing. NOPE NOPE and NOPE. Do understand that it IS a choice, not a fact, or a necessary evil.... its a choice.


    We stand by our work. Our reputation is all that we really have, and we protect it. If a customer loses data, we bend over backwards to ensure their comfort, which is what this really is all about COMFORT. You hold the customers hand every day, and even drop by just to say Hi. You cannot sell this stuff without making them feel that the solution they are truly buying is YOU!!! YOU are the Solution ... not some stupid piece of sotware.

    It is just the way it is sometimes. The preceived value or "Comfort" and "piece of Mind" is how you sell this stuff. It is indeed worth what you make them think its worth... as was stated earlier by some highly evolved individual.

    Regarding E & O insurance, we have it, yes its expensive, and yes its worth it. It is our last ditch BUDR so to speak. Smile

    Selling BUDR is not hard. It can be intimidating when you have to determine # of times to back up and # of computers, and types of data storage. Depending upon what you are doing, it can get expensive fast.
    I feel for you, but it does not have to be difficult. You can set up a basic back up plan and stick to it. This is what you get for this price. It does not cost you anymore money to back up 1 time vs 10 times, unless you are also storing it offline. Offline storage is an additional cost that is calculated seperately. I usually suggest a small business set up a small storage system at home for under $600.00 and then we keep images at the physical location and also occasionally move some data to the offsite drive.

    A Secret to an easy sell.... the data stays in their possession, their drives, their bandwidth, and does not increase your cost a bit... just selling some more COMFORT.


    I suggest that IF you have already bought a BUDR license and you are having trouble selling it, start by offering it in a package with Kaseya and give it to them"SO CALLED" for free and let em taste it first. Hell for that matter, make em lose some data.... HA HA... kidding.

    Include what you are going to do and build in your cost for the BUDR lic. You do not have to figure in bandwidth, unless you are off siting it to your location as well, which I do not suggest nor recommend to anyone that does not know what they are getting into. Storing other peoples data on your equipment can be VERY dicey business.

    I have not looked in a while, but I do not remember BUDR being that expensive.

    Part of your costing system should really take into account the fact that it may take you 3-5 years to truly break even. You cannot charge for BUDR and pay for the entire lic in a year... well some can, but most can't, and you should not even try. You should be costing your BUDR over a 3-5 year period, and amoritizing your software yearly. In the end you cost should look more like $2.00 bucks, not $20.00. At $2.00 bucks you can publicly charge $8.00, and in the negotiating, give in to $6.00 and there ya go.

    This pricing is totally made up BTW
    . You will also have to figure out what makes your BUDR solution better than the silly free FTP backups out there today, and tell em why you are so much better.

    In the end it is all about selling YOU.... not the silly software.

    BTW, since this thread is entitled pricing/profit, ... technically a $4.00 profit on your example BUDR is pretty good. cost 2.... made 4. Lets go out for drinks to Chili's. Who's buying the first round?

    Gamer-X





    Legacy Forum Name: Backup and Disaster Recovery,
    Legacy Posted By Username: Gamer-X
  • Don't charge less than $100 a server/month. The value is much higher infact. You could easily charge twice/thrice that.

    Legacy Forum Name: Backup and Disaster Recovery,
    Legacy Posted By Username: far182
  • I don't know about anyone else, but a 3 to 5 year payback doesn't thrill me.

    We all may be working for Dell or HP by then? :-D


    Legacy Forum Name: Backup and Disaster Recovery,
    Legacy Posted By Username: rvines
  • rvines wrote:
    I don't know about anyone else, but a 3 to 5 year payback doesn't thrill me.

    We all may be working for Dell or HP by then? :-D


    Depending on what you call payback. Each one of us is going to have a different profitability model - our companies are different.

    Our BUDR paid for iteself day 1 (monthly expense). In less than8 months we completely paid for the "wholeproduct" in revenue.


    Legacy Forum Name: Backup and Disaster Recovery,
    Legacy Posted By Username: far182
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    Legacy Forum Name: Backup and Disaster Recovery,
    Legacy Posted By Username: itopsr