MSP customers are moving to the cloud and as the transition continues, they have a choice as to how to be part of this migration. One option is to pass along the customer to a cloud provider – as often happens with UCaaS and receive a commission.
Another option is to become a cloud provider for your customers. There are a few options to choose from if this is your choice.
One good one is HostedBizz, co-founded by Paul Butcher who served as Mitel President and CEO for over ten years. HostedBizz is a flexible platform which allows resellers to deliver numerous services to customers cost-effectively.
In an exclusive interview, Paul said, “We only sell through IT partners and resellers.” He continued, ” What we are attempting to do is to be the IT cloud provider of choice for MSPs.”
Some of the services they provide are cloud sync, telephony and production workloads.
Cloud BDR or DRaaS is two-thirds of revenue and is growing by 8% or 130-140% per year.
Paul mentioned about 80% of the time, BDR is needed due to ransomware or another type of cyber attack.
Cloud DR customers only pay for storage costs and backup licenses. When there is an outage and to use cloud servers, there is a charge for processor usage.
There are no fixed terms or minimum purchases and Paul says churn is well under 1% per year.
We asked about whether there is an onsite appliance and Paul said often, when a Ransomware infection hits, this malware also looks for and tries to infect the backup machine, making it useless.
“It can also lock-up devices such as backup repositories,” he exclaimed.
What they do instead or perhaps similarly is provide and bundle-in an on-prem storage device which is replicated in the cloud.
Since our cloud is not connected to the LAN or WAN, it is not discovered as part of a Ransomware attack,” he exclaimed.
Continuing the contrast, he said appliance-based solutions often have large upfront costs or minimum terms – neither of which apply to HostedBizz.
Not surprisingly, telephony has become a big part of the services running on their cloud. Mitel hosted machines for example – in this manner the MSP is white-labeling a solution, rather than handing off the relationship.
To run Mitel MiVoice Business Express, it costs around $100 per month – not including the cost to license Mitel’s software. They also run Asterisk-based UCaaS but there is no limitation on provider type – if you want to host a different solution, we suggest you contact the company.
MSPs also run Microsoft Remote Desktop as well as VMWare Horizon View for VDI.
Paul explained they have golden templates for VMWare, allowing them to light up machines quickly if needed.
“This really is elastic computing,” he exclaimed.
Another use for their cloud is to sandbox – an MSP can replicate a client’s server, for example, Microsoft Exchange in the cloud and then upgrade it and test it for 4-5 days to ensure everything works.
“This might cost $40,” he exclaimed.
Paul was adamant that no contracts was the way to build his business – he wanted to provide the opposite of telecom.
“We are trying to take elasticity to market,” he exclaimed.
In addition, there are no charges for ingress or egress and other similar charges associated with the large providers in the market.
He said, “What you cant do is ask AWS to restore machines. They aren’t set up to do this. We can add 4 gigs of RAM, via a phone call.” He continued, “MSPs can also do this themselves if they choose but most ask for assistance.”
The MSPs themselves vary in how they charge for services. Some charge the going monthly rate for UCaaS – some bill month-to-month, others sign three-year contracts.
We should point out that MSP valuations can depend on contract length – acquirers like contracts. Paul pointed out that if you can prove your churn is low, this too can boost valuation. We advise you to think these issues through before pricing your services.
Learn about the latest in everything IT needs! UCaaS, the Channel, IT, IOT, Edge, Cybersecurity, AI, SD-WAN, and the Future of Work at the world’s only SD-WAN Expo and MSP Expo, part of the ITEXPO #TechSuperShow, Feb 12-14, 2020 Fort Lauderdale, FL.