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For Managed Service Providers, cost unpredictability is the single greatest threat to profitability. With 51% of UK firms overspending on cloud storage, the traditional hyperscaler model is broken. Egress fees and surprise API call charges can eliminate 60-80% of potential margins on backup and disaster recovery services. This article details a strategy for MSPs to reclaim control over their costs by adopting an affordable, S3-compatible object storage solution designed for predictable growth and enhanced security.
Key Takeaways
- Eliminate unpredictable costs and increase margins by 60-80% by choosing an object storage solution with zero egress fees or API call charges.
- Protect clients from ransomware with immutable storage (Object Lock), which makes backup data unchangeable and ensures reliable recovery.
- Avoid vendor lock-in and ensure seamless tool integration with a fully S3-compatible API, allowing for a simple, drop-in replacement of existing storage.
Escape the Margin Erosion of Hidden Cloud Fees
Hyperscaler pricing models actively penalize data usage, creating massive budget overruns for MSPs and their clients. In the UK, 48% of cloud storage bills are consumed by access fees alone, not actual storage capacity. This volatility makes it impossible to forecast job costs or maintain stable margins. Over half of European organizations have delayed critical IT projects due to unpredictable egress fees. For MSPs offering BaaS or DRaaS, this directly translates into quoting uncertainty and shrinking profits. The solution is a transparent pricing model. An affordable cloud storage platform with zero egress fees, no API call charges, and no minimum storage durations provides the predictability needed to build competitive, high-margin services. This shift away from punitive pricing models is essential for sustainable MSP growth.
Deliver Enterprise-Grade Security Without Enterprise Cost
Ransomware remains the top threat identified by 57% of managed service providers. Attackers increasingly target backup infrastructure, making robust security non-negotiable for client trust and business continuity. A recent ransomware attack on a single UK MSP resulted in a £3.07 million fine and exposed the data of nearly 80,000 individuals. To counter this, MSPs need advanced security features built into their storage foundation. The following capabilities are critical for a modern MSP backup storage solution:
- Immutable Storage: Using Object Lock technology, it creates a WORM (Write-Once-Read-Many) state, making backups unchangeable and undeletable by ransomware.
- Multi-Layer Encryption: All data is secured both in-transit and at-rest, protecting it from unauthorized access at every stage.
- Granular Access Control: Identity and Access Management (IAM) with Role-Based Access Control (RBAC) and Multi-Factor Authentication (MFA) ensures only authorized personnel can manage data.
- Certified Compliance: Look for enterprise-grade certifications like SOC 2 and ISO 27001 to meet the needs of clients in regulated industries.
Only 17% of UK businesses now pay a ransom, relying instead on robust backups for recovery. This highlights the market demand for secure, reliable recovery solutions that MSPs can provide with the right storage partner.
Achieve Seamless Integration with S3 Compatibility
Vendor lock-in is a major strategic risk, with 41% of businesses feeling trapped by the high cost and complexity of migrating away from their current cloud provider. The S3 API has become the industry standard, and choosing an S3-compatible storage alternative is the most effective way to build an exit strategy from day one. Full S3 API compatibility ensures that all existing tools, scripts, and backup software work without modification. This drop-in replacement capability allows MSPs to migrate client data by simply changing the service endpoint and updating credentials. This seamless transition protects technology investments and reduces migration risk by over 90%. It also enables MSPs to leverage a broad ecosystem of S3-native applications for backup, archiving, and data management, including out-of-the-box integrations with leading vendors like NovaBackup. This operational consistency is key to scaling service delivery efficiently.
Boost Performance and Simplify Operations with an Always-Hot Model
Complex storage tiers create hidden operational costs and introduce dangerous delays during recovery operations. Many MSPs find their backup retention policies are constrained by local storage capacity, a problem tiering is meant to solve. However, waiting for data to be restored from an archive tier can cause API timeouts and break service level agreements (SLAs). An "Always-Hot" storage architecture eliminates this complexity entirely. All data is immediately accessible, reducing restore times and ensuring consistent, predictable performance for backup and recovery tasks. This model can deliver up to 20% faster backup performance compared to traditional tiered cloud storage. By removing the need to manage complex lifecycle policies, MSPs can simplify their operations, reduce the risk of human error, and guarantee that client data is always ready for a fast restore. This approach provides a superior client experience and strengthens the reliability of any DRaaS offering.
Build a Predictable and Profitable MSP Business
The UK MSP market generated £52.6 billion in 2022, demonstrating a massive opportunity for growth. Profitability in this competitive space hinges on cost control and service differentiation. An affordable object storage partner designed for the channel provides the tools for success. Key features for MSPs include:
- A Multi-Tenant Partner Console: Manage all your clients from a single dashboard with robust RBAC and MFA for security.
- Automation via API/CLI: Streamline onboarding, management, and reporting to reduce your operational overhead by up to 40%.
- Predictable Margins: With zero egress or API fees, you can quote clients with confidence, knowing your margins are protected from surprise charges.
- US Presence and Geofencing: Keep client data within specific geographic regions to meet data residency and compliance requirements.
By partnering with a storage provider that understands the MSP business model, you can build competitive BaaS and DRaaS offerings that deliver real value to clients while ensuring your own profitability. Ready to see how much you could save? Calculate your savings and discover a more predictable path to growth.
More Links
Statista presents a market outlook for public cloud services in Germany.
The European Data Protection Board (EDPB) provides a document concerning cloud-based services for the public sector.
DLA Piper offers information on data protection laws in Germany.
The Toulouse School of Economics presents a working paper on economic topics.
GDPR.eu provides information and resources about the General Data Protection Regulation (GDPR).
ITPro discusses cloud storage spending, highlighting that over half of cloud storage budgets in Europe are spent on usage fees.
Campus Technology reports that a significant percentage of IT leaders encounter unexpected cloud storage costs.
CIO Dive discusses the issue of cloud storage overspending.




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