Hosters: How to Profit From SaaS Email Backup

 In Email Backup, Hosting, Industry Insights, Resellers & MSPs, Sales & Backup
  1. Meet the challenges facing your web hosting business for ways to mitigate security, business continuity, and storage issues with hosted email.
  2. Offer your web hosting customers a more complete solution that results in revenue opportunities, including when those customers choose external/third party email services.

The workplace relies more on email than ever before. With messaging alternatives such as chat, social inboxes, and productivity tool inboxes fragmenting where people communicate, the primary mailbox has become a funnel for storing the most important messages. Additionally, increased mobility requires email to be hosted online, whereas a decade ago downloading it to one’s local computer was the norm.

The Stats

Storing and accessing email online has turned into a multi-billion dollar industry, creating both challenges and opportunities for web hosts offering email services to their customers. In fact, the market size for email archiving is estimated at $4.9B for 2015 by technology market research firm Radicati, which is nearly double that of 2011 at $2.5B. On the whole, the sizes of the electronic information archiving market is estimated at $5.4B in 2015.

According to the 2014 Report on the State of Data Backup for SMBs released by Carbonite, small and medium sized businesses (SMB) are facing an overwhelming amount of financial and non-financial exposure because of their backup practices. What’s worse, 78% of respondents felt their business’s data was “somewhat unlikely” or “very unlikely” to be exploited by an outside force.(3)

Email security and backup is a natural extension of the role a web host plays in a company’s online infrastructure. Web hosts who offer tools that assist in keeping a business’s online infrastructure out of harm’s way, and who can educate their customers as to why a backup plan is important, will enjoy a higher lifetime value per customer.

This opportunity is appealing to all web hosts, whether or not you provide email services to your customers; by becoming a trusted backup solution provider, you are essentially increasing the switching cost for that customer by creating a stronger tie between the two of you.

For those web hosts who are facing these scenarios, Self-Serve SaaS email backup may be a viable solution to meet customer needs.

The Self-Serve SaaS Email Backup Model

The model uses SFTP over a public cloud infrastructure to automatically back up files, email accounts, and databases. As a web host, you offer the product to your end-users as an add-on, either at signup or through their control panel. As the web host, your investment in the infrastructure is only through integration – configuring the service and using an API or control panel plugins to set up signup and access in your account control panel and commerce engine. End-users get direct access to their email for account recovery through self-serve SaaS backup, and an administrator account emulates the same environment as that in a third party hosted email service.

By moving the backup to a third-party solution, several revenue opportunities arise:

Opportunity #1: Increased Customer Stickiness

As we suggested earlier, web hosts are missing out on the opportunity to generate revenue on email usage. A self-serve SaaS email backup solution is compatible with third-party email services but offered by the web host, typically at the hosting account signup process as an add-on feature.

Once email backup is connected to the hosting account, the customer will be less likely to move to a new web host. The host has increased the stickiness of the account, and also helped improve the customer experience by offering a valuable, flexible, business-critical solution at a low cost.

If a disruption occurs for whatever reason, the backup structure of Self-Serve SaaS en- ables faster recovery through an intuitive interface. Both a web host and end-user (or administrator) can troubleshoot and resolve the issue with minimal business disruption. Now, if the email disruption were to occur at the same time as a site disruption (hacking, malware, etc.), more energy and resources can be put into isolating and cleaning up the site issue because the email disruption is easily managed. It should be noted that Self- Serve SaaS backup exists for websites and databases as well, offering the same intuitive interface and benefits for a positive customer experience with their web host.

Opportunity #2: Zero Overhead and Higher Revenue Per Account

A self-serve SaaS email backup solution creates no-risk revenue opportunities for the web host, especially when offered as a low-cost add-on during the account signup process.

Since this is a self-service product, the web host does not need to invest in the human re- sources necessary to support email backup. Even for larger accounts, there will typically be an administrator at the company who will handle issues, just as that person handles issues with regular email.

As we said above, it also creates revenue opportunities for a service (email) that the host- ing customer doesn’t even buy from the web host.

Opportunity #3: Attract Accounts with Specialized Requirements

Self-serve SaaS backup combines all three types of email backup needs into one service (note: most service providers will offer compliant solutions at a different product or pricing structure than general backup, but all types can usually be done through the same service provider).

This means a web host who offers fully-compliant email backup can prospect lucrative verticals that would ordinarily pass over their shared or managed web hosting services.

Conclusion

From the market estimates referenced earlier, we can estimate that 90% of the revenue from all information archiving is attributed to email archiving for 2015. Web hosts have ample opportunity to capture a share of that market by adding self-serve SaaS email backup and archiving solutions to their service mix.

As a web hosting company, ask yourself these questions:

  1. Are you looking to increase your average revenue per user?
  2. Are you looking to increase your web hosting margins?
  3. Would you like to reduce your customer support costs and in- crease customer stickiness?
  4. Would you like to increase customer satisfaction and reduce churn by delighting your customers?
  5. Would you like a share of the projected cloud services market of $47B by 2018, and specifically a share of the current $5B of email backup and archiving market?

Why Dropmyemail

Dropmysite is comprehensive backup for email and websites specifically built to serve the SMB with self-service SaaS. Automation and ease of use for both the SMB and hosting providers provide a significant opportunity for web hosting companies targeting the SMB market. Customers will demand backup as a service because of ease of use of the service and peace of mind along with the ability to get their website and email back up and running when something bad happens.

Benefits to Resellers

  • Recurring revenue
  • Boost your ARPU
  • Improved customer stickiness
  • Reduces churn
  • Reduce support costs
  • Zero product development cost
  • Cross sell opportunities
  • Flexible pricing
Next Steps

To speak to our sales team about how you can offer Self-Serve SaaS Email Backup solutions to your SME customers, send an email to sales@dropsuite.com.

REFERENCES:
  1. Email Archiving Market, 2011-2014, The Radicati Group.
  2. Information Archiving Market, 2013-2017, The Radicati Group.
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