What's In a Cloud? Purpose-Built vs. Public

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1. SLIDE 1 We've got a really interesting topic today. Something that I feel isn't talked about as much as it should be. It will become even more relevant as time goes on.
2. SLIDE 2 Understanding the objective of this webinar is, we want to find a safe, cost-effective, off-site place to store all business data. That's really what we're looking for. When you think about backup to the cloud, you're thinking about that final destination. You're thinking about what do you need from that cloud and what makes it scalable as well as future-proof, so that it'll be able to grow with you as you grow your business.
3. SLIDE 3 Let's talk about the players that we're comparing today. We're looking at private clouds versus the public clouds. I will be looking at the Datto cloud on the private side. Then on the public cloud we're going to be looking at AWS, Azure and the Google cloud. Those are really good comparisons and three biggest players out in that market.
4. SLIDE 4 Understand the categories here. We're going to look at five different categories and kind of go in-depth in all of them. Then we're going to recap it at the end. I even have something free for you guys at the end of this webinar. Some further reading that's really interesting from one of the great analyst firms out there.
5. SLIDE 5 The first category is support. Why would you call cloud support? What is really the top four needs of cloud support.
6. SLIDE 6 We did a poll with our partners and this what we came up with. Either the solution is broken, something is wrong, it's not taking backups, or backups are not going to the cloud. Or there's a customer disaster and you need to do a restoration. You need to get them back up online. A configuration or an installation. Finally, some licensing or payment.
7. SLIDE 7 When we look at the urgency of all of these, we found all of our partners marked every single one of these reasons as urgent. You need to get them solved. When you look at a solution not backing up, that's really urgent. A client disaster, that's the most urgent possible scenario you have. Then configuration or installation, that's tech time, which is cost coming out of your bottom line. You really do need to get that done as fast as possible. When you pick up the phone, that's just money that's coming out of your cost and something that you want to be resolved as quickly as possible. Finally, licensing and payment, that's right to the bottom line. You want to get those issues resolved as fast as possible. When we look at public cloud technical support, they need to support all customers, not just cloud backup customers. Your urgency may be missed because they're building a support department that fits all of the reasons why anyone would call for support for that public cloud product. The urgency on those really does vary. Also, it's not an end-to-end solution. It's really just a component in a larger complex solution. When you're using Google or Azure or AWS, they're just housing the data. They're not owning the software that houses the data. They're not owning the solution that is doing the backing up, so they're really just a component to it. You may need to call multiple support teams to figure out what the problem truly is. Finally, IVR and outsourced support can really bring costs down for investors for these large public companies. They're thinking about how do they rise the stock price, how do they make the investors happy. Some of these things are on the docket for bringing those costs down and making the company more profitable.
8. SLIDE 8 When we look at private cloud, or the Datto cloud technical support, urgent calls are the only ones we have. We polled our partners and they all marked those calls as urgent. That's really all we deal with, is urgent calls. We provide the end-to-end solution. You're not going to be needing to call multiple support departments. We really do the entire process of getting through to that problem, fixing the solution. That may be going to the network. It may be going to the specific machine that was being backed up. The restore could come from different angles, depending on what's operable at that time. Finally, we have direct to US technician 24 by 7 by 365. That's really important. Sitting on the phone dealing with an automated system is very time-consuming. It's cost that comes out of your bottom line. It's something that no one says they really enjoy, calling in and getting an automated answering machine and going through those answering machines poles and trees.
9. SLIDE 9 Next I want to talk about scalability. This is really important. When you look at public cloud scalability, what they do is they really want to get you in at the lowest price. They want to get you in basically for free. That way you don't have to invest in any infrastructure. Then as you grow, that's where they make profit. Storage is really their sale price. That sticker that you see, you go, "Wow, look at that. Glacier storage for two cents a gig, or three cents a gig. That's such a great deal. No one could be able to compete with that." The reality is, that's not profitable for them. It's not where the bulk of their profit comes from. The bulk of their profit comes from the bandwidth usage of in and out, the CPU and memory, those are the fine print items. Those are the high-ticket items. Your backing up and getting data into the cloud, as well as restoring data out of the cloud, is actually very expensive when you think about what it would be if you had it as a fixed cost. As a variable cost and using it as a metered price, it becomes very expensive and very intensive. As you grow within those public clouds, that's where the pricing and the expense becomes a lot more. We know this from experience. Datto acquired a company called Backupify back in December of 2014. Backupify utilized AWS for its cloud storage. It's a great platform. We were really happy with it, but we noticed that the expenses from it was far larger than we deal with in the Datto cloud, in our private cloud. That's because they're utilizing all of the variable features here, which is the bandwidth usage. Typically the first backup was as expensive as storing 6 months worth of the data that they backed up, just utilizing that, trying to get it into the cloud. The CPU and memory that was associated with doing restores and doing multiple backups made it a limiting factor where we couldn't allow people to take backups as often as we wanted, or they're not allowed to do a ton of different restores because it becomes very expensive for the vendor. We saw this model and that's why we actually moved, and we're in the process of moving Backupify from AWS to the Datto cloud.
10. SLIDE 10 When we talk about Datto cloud scalability, with our time-based retention, costs are set per customer. Disasters do not cost anything extra. We never look to a customer's wallet in the time of a need of doing a restore. Whether that's a high bandwidth intensive restore or it's using multiple CPUs or a lot of memory, we never look to charge for those. We want to make sure that when you grow with the Datto cloud that you're only becoming more profitable and it's not an exponential cost model, like we see in some of the public clouds. That bandwidth usage and all of the storage that you have just seems to just raise the cost, even though your data is not growing and your customers into the cloud is not growing. One thing we say around here at Datto is we don't make money if you don't make money. A Datto partner that has one device is the least profitable partner possible for Datto. If we're charging something that's too high and you're not making money on reselling the Datto solution, then you're not going to be reselling Datto products. We're not going to see that. Since we're 100 percent channel-only, we don't benefit from that. We don't profit from that in any way. It's really in our best interest to make our pricing model as low as possible to give you more incentive to move more Datto units out there, whereas it's a totally different model when we look at the public cloud, they're not necessarily incentivized in that way. Also, just a much smaller fish in their general business that it doesn't really seem to be that important to them, necessarily, for just the cloud storage side.
11. SLIDE 11 Disaster recovery. When a disaster happens with one of your clients, this is your time to shine. This is absolutely the time for you to prove yourself and to prove that all of the money they've been investing with you is worth the restoration that they get. The time to restore, that RTO, as it's commonly referred to, that is so critical. That's what they're going to be measuring your performance on, is how fast you get the data back or how fast you get the systems up and running. One thing that I've learned, definitely, in the years that I've been working in disaster recovery is that when a disaster happens, Murphy's law is in full effect. Typically it's not one thing that breaks, it's a bunch of things that break. That means that even when you're going to do the restore, who knows, maybe something goes wrong in the restore process. You're dealing with computer hardware and computer software. Things tend to break in those type of processes.
12. SLIDE 12 You really need a team. A team behind you to make sure that you're getting the restore and to use all of the different possible options. You want a specialist, when you're communicating in a disaster recovery scenario, who works on disasters. Who is used to this scenario, used to doing disasters and has a bunch of different opportunities or ways for you to get your data back. You also want someone who knows your entire solution, so that they can have multiple ways to get your data back. Like I said, when Murphy's law is in full effect, anything that can go wrong, does go wrong. That way you really do need to [inaudible 00:10:52] someone thinking about the entire solution and not just two-point people, or three-point people that say, "Well, this is what I can provide for you. Maybe you should call the person who owns your software. Really I just do the hardware and the storage side." You want someone who's thinking about your entire solution and thinking about, "How do we get this customer back online?" or "How do we do this restoration in the fastest possible way?" You just never want to wait. You absolutely never want to wait. That's why you want to be calling a company, or a support department, that knows your urgency, knows that urgency level and knows that this is the one moment for the backup part of your business to shine for this customer. A lot of times if things go wrong during that process, that you'll lose that customer. That customer will not return to you. We actually see out there that any type of failed restores or failed virtualizations are the most common for rollover within managed service providers. Just because the customer, once they've lost the trust that the backups that they were taking and the money they were investing turns out to be bust, then they really don't want to trust any part of their IT business with that provider.
13. SLIDE 13 The next slide, and I find this to be extremely important, the channel commitment. This is something that really isn't talked about. That's that where you invest your business matters. Absolutely. The money that you spend builds whatever business that you're spending it with. You got to make sure that you're using your purchasing power for the good of your own community. You want vendors that have natural incentives to grow the channel community. Anyone can go up onstage and say, "We love the channel," but actions speak louder than words. Actions are like a channel commitment, or 100 percent channel-only, that's an action that a company's made in front of their investors to say, "Look, the channel community is the only community that we want to interact with. We're going to build that community." It sets up a natural incentive. Whereas, if you just say, "Hey, we got a great channel program, but we also have a direct program because that's what our investors want, and quite frankly, we want to make money any possible way." When you fuel those businesses, it's just potentially damaging to the community that you're already in. Using your buying power for good is something that helps you in the future. It's something that really should be discussed because I think that the channel community can actually get more from their vendors by challenging them to not go direct. To challenge them to say, "Look, the channel community is here to stay and we want you to make a commitment to us, just like we make a commitment to you by buying your products." Also, creating a unique value add for the customer. This is something we talk about a lot when we talk about business continuity. Business continuity, if you're not familiar with the term, is getting businesses up and running as fast as possible. It's really the evolution of backup. Because we've separated backup from business continuity, we've created a new value add. We're doing beyond backup, essentially, with business continuity. One of the reasons behind that is, quite frankly, they can get backup on their own. They can purchase backup from multiple different providers. They can purchase backup directly from the internet. If you're reselling backup to them, why do they need you? Why do they need you in that interaction? Couldn't they just do that on their own? When you're selling business continuity, this is a solution that requires the managed service provider, it's a solution that's far more intensive, in terms of security of your data and security of your business applications to keep them running. It's more of a commitment. It's something they just couldn't buy on their own. You're creating a unique value add. You're really being useful in that relationship. That's important for the future of your business. Finally, it should always be a partnership between vendor and partner. If they have a partner program, if they call you a partner, it should be a partnership. That means giving back to that community. That means MDF funds. It means all of the different community aspects of rising up in a partner program and getting the incentives in that partner program. Challenging your vendors to really treat the relationship as a partnership, that's really what I would say is most important when picking an off-site location.
14. SLIDE 14 Where do we go from here? Understanding a roadmap for off-site data is extremely important because this is one thing you don't want to change. You never want to go from cloud to cloud. Sometimes it's not even possible to go from cloud to cloud. When you're picking a cloud to put your customer's data in, you really want to pick a secure one, and you want to pick one that's going in the same direction you are. You need to have input on the roadmap and you need to be exposed to a roadmap. If you get involved with a company that's doing a lot of different things, chances are they could get rid of the thing that you're buying their product for. If it's not the most profitable, if it's not the most lucrative for them, or their investors, they just don't have a whole lot of incentive to stay in that business. They haven't made a huge commitment to it. When you're investing your business into that off-site location, you want to make sure that you've got input into the roadmap. You also want your investments to fuel the progress and the products that you buy. You could be buying off-site storage and they could be investing the money somewhere else in the business. There's a ton of different things some of these larger companies are doing. They can be using it to pay the debts from their other departments. There really is a ton of different ways that that money's going to. While you'll never be able to, with any company, track exactly where your dollar goes, at least when you've picked one that's in the specific vertical that you're selling your product in, you know that it's furthering that vertical and that's what they're going after. Finally, the smaller the fish, the less control you have. If you're a tiny microscopic fish in a ginormous pond, the swimming that you do just has no effect on that pond. While you don't want to be the largest fish in a tiny pond, you do want to have your purchasing power have an effect on the company that you're purchasing it with. That's an important message. You do have that ability to control when you pick private cloud.
15. SLIDE 15 I want to introduce an article written by Storage Switzerland. A fantastic analyst within the IT community. They wrote an article on this private and public cloud. It's got a lot more detail than what was in this short webinar. You can find that at datto.com/swiss. It's a really great article and it has some good further reading. For additional information on Datto and its total data protection solutions go to datto.com Thank you.