Solving The Enterprise Vs. SMB BDR Sales Dilemma

By The Business Solutions Network

Four BDR (backup and disaster recovery) experts weigh in on where IT solutions providers should be focusing their sales efforts.

After a few years in business, nearly all VARs and MSPs (managed services providers) run into a proverbial wall where sales start to level off, and they recognize a change is needed. A common strategy entails moving upstream into the enterprise space or downstream into the SMB mark et, depending on one’s starting point. The strategy seems logical enough; after all, by staying within the same vertical market you have the advantage of being familiar with industry rules and regulations, for starters. So how could the IT needs be that different between the two groups?

I recently spoke to BDR experts from Carbonite, MAXfocus Backup, Unitrends, and Vembu to get their input on this topic. As you’ll soon discover, they were not on the fence about this topic and had a lot of good advice to share.

Key BDR Similarities And Differences Between SMBs And Enterprises
To address this topic, it made sense to focus on BDR because it represents an IT solution that’s applicable to businesses of all sizes and, additionally, it’s often the first solution IT solutions providers (ITSPs) sell to new customers. So what are the similar BDR needs between large and small companies? “Protection of data is mission critical regardless of which business size — or segment — the VAR/MSP focuses on,” says Mike Dalton, senior vice president, worldwide channels and international field operations, Unitrends. “Government regulatory compliance continues to drive increasing adoption for archiving and retention solutions that are fueling demand for on-premise, hybrid, and cloud-based BDR.”

David Maffei, VP, global channel sales, Carbonite, concurs and adds, “Like large enterprises, SMBs are becoming increasingly dependent on the continual availability of information and systems to run their business. They are aware of which applications are mission critical to their businesses, and according to IDC, they are looking for an RTO [recovery time objective] of less than 4 hours.”

Despite the significant similarities between the two groups, ITSPs would be wise to not confuse the above information as an endorsement to sell BDR to both. Here is a summary of the differences between SMBs and enterprises, beginning with Chris Groot, VP of sales, MAXfocus Backup. “Enterprise companies have the luxury of internal IT staffs dedicated to backup and disaster recovery. They also can afford to invest in the training required for procuring and implementing complex systems. Additionally, enterprises typically run hundreds of servers with many legacy systems, which locks them into using legacy BDR solutions.”

SMBs, on the other hand, have a much different set of BDR needs. “Many small businesses are still doing backup to tape or USB drives, and they need a lot of hand-holding to understand why they should upgrade to a real BDR solution,” says Larissa Simone, marketing manager at Vembu. “The upside is that they’re much more open to talking to ITSPs, unlike their enterprise counterparts who prefer to work directly with BDR vendors or large IT consultants.”

The SMB market also typically has a technical resource that wears many hats, or perhaps a business lead making the decisions on what technology to adopt, says Groot. And an SMB’s IT environment typically consists of fewer than 10 servers. An appropriate solution for the SMB market requires a different level of turnkey usability, proactive monitoring, and simplicity in purchasing. The reason, says Maffei, is, “SMBs lack the financial and technical resources of larger enterprises to deploy and maintain traditional BDR solutions, which tend to be complex, expensive, and require on-premise equipment. SMBs also require solutions that are more powerful and sophisticated than the consumer options at the lower end of the market.”

If You’re Debating Between An SMB And Enterprise Focus, Consider This
So just because we’ve identified key differences between small and large companies regarding their BDR needs, does that mean ITSPs can’t sell to both? The experts I spoke with all suggest it does. Vembu’s Simone advises, “You can’t serve SMBs and enterprises unless you’re selling a commodity. The sales process is different for each — enterprises are high touch and require a longer sales cycle. SMBs require a lot of education, some of which can be done over the phone.”

One of the biggest risks ITSPs make when they try to sell to both groups is commoditizing their BDR offerings, says MAXfocus Backup’s Groot. “Ninety percent of MSP services will look the same if their services are placed on a checklist. Differentiation, or getting noticed in the crowd, is one reason to focus on a specific market segment. Perhaps more importantly, defining the markets you serve is a key way to build trust with prospective customers.”

The best piece of advice, says Unitrends’ Dalton, is to expand your services technology portfolio within your current target audience. “For example, if an MSP already offers the essentials — network management, security, telephony, storage — then consider adding disaster recovery and assurance, archiving retention, collaboration, and mobile services. It would be ideal to start building out cloud-based solutions for all of these offerings, too.”

Carbonite’s Maffei agrees that it’s better to stick with one group, but says the bigger opportunity is in the SMB market. “The enterprise BDR space is crowded — it’s filled with legacy players and, after implementation, a lot of larger companies will handle the monitoring and maintenance in-house, which limits a solutions provider’s ability to provide add-on services to increase the margin,” he says. “Carbonite and IDC recently found that 35 percent of SMBs will deploy business continuity solutions in the next 12 to 24 months, and 72 percent of SMBs with a solution already in place are planning on investing additional dollars in the next two years. So rather than break into the enterprise market, I suggest partners go after the SMB space — there’s a proven need, the clients are willing to invest in solutions, and they’ll likely need ongoing support after an initial purchase is made.”

For those taking Maffei’s advice, he has one final suggestion, which is, “Bundle, bundle, bundle.” BDR and business continuity are areas that aren’t defined in black and white terms, he says. Partners have a lot of leeway to create comprehensive solutions that serve their clients’ BDR needs, but also help increase their margins and provide ongoing income through services. “So instead of just selling a server because the old one crashed, you should be selling a comprehensive data protection package that includes a server, hybrid backup and recovery software, NAS [network attached storage] device for the local backup, antivirus, and a services package that includes regular monitoring and testing of the solutions. In that case, your clients are happy because they don’t have to worry about their data, and you’re happy because you’re able to take advantage of margin enhancers and recurring revenue opportunities.” In other words, the proverbial wall that was causing your sales to stagnate has been knocked down.