Blowing Up The Business Model: Asigra's Recovery Based Pricing

I wrote about the Amazon Effect in this CW article a few months back where I rambled about how its business model disruption that has the biggest impact to markets over time - positively or negatively. It's business model changes that upset the traditional way of doing things.

In the backup market - a very old, very boring, very well entrenched $5B annual market - the players, old and new, have effectively competed on price and incumbency - all selling SOFTWARE licenses so customers could "back up" their data. More data requires more backup servers and thus more licenses. A wonderful model.

Except it isn't. People pay to back up, but there is zero value in backup - all the value is in recovering - but no one charges for that. Until now.

Asigra, because they can, have come out with a new (optional) pricing model for their MSPs (Asigra is a cloud based backup/recovery solution delivered by MSPs) that blows up the previous model. Essentially, Asigra allows you to backup for pennies - and gives you the opportunity to pay for recoveries. They cap the cost so you never spend more than you plan - but you could spend less! If you recover less than 25% (the maximum charge) of your data, you pay less. The better you become at this, the less money it costs you over time. If you never recover - because you are very good and very lucky, you might save 99% of what you'd end up paying with someone else.

I'm sorry, but that is just brilliant! It's like saying that if you buy car insurance and don't make a claim, the insurance company gives you 90% of your premium back. How great would that be?

It's different - and people are confused and scared by different so I'm not sure how fast the uptake will be, but I love it. I love it because it not only makes total sense, but if it does take hold, it is almost completely impossible for the existing players (certainly the public ones) to react in any way other than to discount their products significantly in a competitive situation - which lord knows they don't want to do because Wall St. will torture them. Once you establish a revenue model, turning it upside down (even though it may be the right thing to do) is impossible.

This could be a fascinating one to watch as a microcosm of our IT industry in general.

Topics: Data Protection Data Platforms, Analytics, & AI