ጷ
Cyber
Protect Cloud
The Essential Guide to Pricing and
Packaging Cybersecurity Services
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ጷ Cyber Protect Cloud
THE ESSENTIAL GUIDE TO PRICING AND PACKAGING CYBERSECURITY SERVICES
Contents
Security Services: A Growth Opportunity............................................................................3
Recurring Revenue Model Primer..........................................................................................5
Advantages of the Acronis Cyber Protect Cloud Model................................................7
Practical Packaging and Pricing Models............................................................................10
Going to Market Effectively and Profitably.......................................................................15
Additional Resources...............................................................................................................17
About Acronis.............................................................................................................................17
About 2112 Group.....................................................................................................................18
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ጷ Cyber Protect Cloud
THE ESSENTIAL GUIDE TO PRICING AND PACKAGING CYBERSECURITY SERVICES
Security Services: A Growth Opportunity
Security is one of the most omnipresent concerns in the digital
world. Any product or service that includes computer code is
vulnerable to attack and exploitation, and attacks are becoming
increasingly more sophisticated and voluminous. No one is immune
to attack or compromise, as many businesses and governments –
large and small – are acutely aware.
As the need for more and better security is paramount, the business
managerial talent. By some estimates, the U.S. alone has more than 4 million
open security jobs. The market can’t keep up with security demand.
Enter the managed security service provider (MSSP). MSSPs provide security
services through the aggregation of expertise, automation, and support that
scales over scores of business domains and exponentially more endpoints.
Through managed security, businesses acquire the data protection and active
response that they can’t attain or support on their own.
to tap into a burgeoning market and generate recurring revenue. According to
the 2112 Channel Forecast for 2020, solution providers believe security is the
best growth opportunity in 2020. The perception of security as a growth driver
comes as no surprise as the overall security market continues to expand at
rates of 8% to 10% annually – as much as three times the industry growth rate.
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Most MSSPs operate with heterogeneous technology platforms and
While this “best-in-breed” approach should provide MSSPs with the leading
resources for delivering services, they often lack interoperability and data
An alternative approach is the homogenous model, in which MSSPs build
their portfolio of services on a single platform that provides the essential
security services under a single pane of glass. The homogenous model makes
it easier for MSSPs to sell, deliver, and administer their service portfolio. And
the homogenous model makes cost management simpler, so MSSPs have an
easier time pricing and selling their services.
This e-book provides an overview of the Acronis Cyber Protect Cloud platform,
as more customers adopt distributed infrastructure, hosted services, and
cloud computing support.
As solution providers sell core cloud and on-premises products and services,
they need add-on security products and services. Likewise, when solution
providers sell security products and services, they have an opportunity to
sell complementary technologies such as storage, backup, and professional
services.
The challenge facing MSPs and MSSPs is twofold:
• Building and maintaining optimal security service delivery platforms
• Creating a balanced cost and price framework that’s equitable to
themselves and customers
In 2019, the average solution provider earned
as much as 20%
of its gross revenue from security
services
as much as 40%
from recurring managed security
services
Acronis, a leading provider of cyber protection solutions that combine backup/
data protection with cybersecurity solutions, is changing the way MSSPs are
building and delivering security services. Through the Acronis Cyber Cloud
platform, MSSPs gain access to a collection of integrated and interoperable
security services for smooth delivery to their customers. The framework provides
MSSPs with the ability to segment their services, tailoring oerings and prices to
customers’ specic needs.
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Recurring Revenue Model Primer
The bedrock of managed services is the recurring-revenue
model, in which providers collect incoming payments from
customers periodically. The basic principle of recurring revenue
is that the provider fractionalizes the cost over time to make
the service expense more aordable and predictable for the
customer. Correspondingly, recurring revenue gives providers
steady and predictable income, unlike transactional product sales
that are unpredictable and episodic.
face a tough hurdle of covering expenses while building an income stream.
delivery and maintaining unused capacity. Over time, though, as more customers
subscribe to a service, revenue compounds faster than expenses as automation
and service capacity spread over multiple accounts.
Revenue/Cost
Cash Flow
Positive
1 23
45 6 78
Recurring
Revenue
Operating
Costs
Time/Accounts
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Determining the cost of a service isn’t as tricky as most providers believe. A
common misconception is that a service cost should be lower than the price
of a legacy product’s total cost of acquisition. That’s not necessarily true. A
good rule of thumb is that providers can and should charge between 200%
and 250% of their base cost per unit. For instance, if a service vendor charges
$1 per unit, the MSP should charge between $2 and $2.5 per unit. This price
increase gives MSPs enough income to cover their operating expenses –
labor, operations, administration, and infrastructure – while maintaining a
According to research by The 2112 Group, the average managed service
provider earns gross margins as high as 40% on remotely delivered services
sold under the recurring-revenue model. Moreover, MSPs enjoy a higher
solution providers reliant on product sales alone.
Selling services under a recurring-revenue model isn’t enough to ensure
success and steady income. MSPs must think of themselves as sales and
customer service organizations as much as technology companies. The
stability of recurring revenue depends on two primary factors: new sales and
high renewal rates.
Recurring revenue compounds only if MSPs continuously add new customers.
in the recurring revenue model depends, though, on renewals as well. If
between income and expenses – will come under pressure. Correspondingly,
MSPs with high customer attrition rates must gain more new customers to
recurring-revenue model comes under stress when customer attrition rates
exceed 10% annually.
MSPs have two options when building managed service portfolios and pricing
service bundles: decrease the revenue yield per bundle to contain the price to a
marketable level or create a holistic service platform that has a lower organic cost.
The key to pricing under a recurring-revenue model is to not let the street price
exceed the customer’s ability to pay for multiple services. If an MSP follows
the “double-up” pricing model, as dened above, and adds multiple services
to packages, the cumulative price quickly rises above the customer’s ability or
willingness to pay.
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Advantages of the Acronis
Cyber Protect Cloud
Acronis, best known for its data protection and backup products,
is tackling one of the thorniest issues in the managed services
market: putting several services under the proverbial “single pane
of glass.” Acronis Cyber Protect Cloud has several critical security
services, integrated and manageable through a single platform
and management console, giving MSPs the ability to more easily
manage their workloads and contain costs that – when executed
eectively – results in higher profitability.
Most MSSPs and MSPs are selling security services by cobbling together
that meet their customers’ data protection needs. In practical terms, they
and no integration and automation between the solutions.
The services provide the function customers need, but the operations are
the need to operate multiple systems simultaneously. Such heterogeneous
across numerous providers, maintain multiple backends, acquire licenses
and services from various vendors, manage multiple supplier contract
relationships, and navigate disparate support systems.
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Acronis Cyber Protect Cloud, which has features that map to the National
Institute of Standards and Technology’s (NIST) security framework,
combines the most needed security, policy management, and data
protection technologies in one platform. Rather than making MSPs acquire
licenses from multiple vendors, Acronis Cyber Protect Cloud provides
vulnerability assessment, anti-malware, ransomware protection, secure
remote management, patch management, security policy management and
data protection, response time counts. A key metric that hackers use to pick
their targets is the amount of time it takes to penetrate whatever security
protections are in place. The more time it takes to get into a network, the
less likely hackers will target it. Through the interoperable and integrated
management, Acronis Cyber Protect Cloud makes it easier for MSPs to identify
threats and respond accordingly.
Identify Protect Detect Respond Recover
Auto-discovery
of new devices
Remote agent
installation
Defenses against
malware / ransomware
Patch management
integrated with backup
Backup and Desaster
Recovery
Vulnerability
assessment
Backup and Desaster
Recovery
Hard drive
health control
Malware quarantine
Forensic information
in backups
Data protection
map
Unied Protection
policies management
Dashboards
and reports
Dashboards
and reports
Remote desktop
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problem with security and data protection technologies. Multiple backups and
anti-virus clients and their agents running on a single machine often overtax
the processor, resulting in CPU lags and reporting mistakes. With Acronis
Cyber Protect Cloud , all complementary modules work seamlessly together,
ensuring optimal endpoint performance and user experience. Agent fatigue
integrated solution will greatly reduce these probems.
Some MSPs may say they want to use only best-of-breed applications in
their security services. The “jigsaw puzzle” approach described above isn’t
necessarily bad, but building such service portfolios is often time-consuming
and costly. Acronis Cyber Protect Cloud is not an “all-or-nothing” proposition.
use whichever services they want. And Acronis’ individual and full packages
numerous third-party testing organizations.
Acronis Cyber Protect Cloud provides the best security and data protection
technology for MSPs to deliver to their customers with the exibility that meets
their business models and customers’ needs.
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THE ESSENTIAL GUIDE TO PRICING AND PACKAGING CYBERSECURITY SERVICES
Practical Packaging and Pricing Models
Acronis designed Acronis Cyber Protect Cloud with flexibility in
mind. While it’s a holistic platform that provides MSPs with most of
the security tools they need, it doesn’t require the use of every
tool. MSPs can create flexible plans that allow customers to pick
the services they want. This flexibility is particularly useful when
selling data protection to customers that already have a solution
in place. MSPs can toggle most of the services on and o at their
customers’ discretion or by plan.
Manageability is another excellent feature of Acronis Cyber Protect Cloud.
plans. In practical terms, MSPs can create packages that let a customer
and a lower but adequate level of security for remote workers. With
this ability to segment levels within accounts, Acronis MSPs can create
segmentations that align with customers’ security policies and budgets.
Acronis oers three editions of Acronis Cyber Protect Cloud: Standard,
Advanced, and Disaster Recovery. Each oers dierent features, which MSPs can
use to create plans and enable/disable features ensuring MSPs deliver right-
sized solutions to their customers based on need and budget.
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packages. MSPs can choose to sell Acronis services through one of two
models: capacity-based or per-device.
The capacity-based model enables MSPs to buy services based on the
volume of data stored plus a fee of $2.50 per every server, workstation, or a
virtual machine per month. In situations where customers have variable data
volumes, MSPs can opt to sell based on consumption rather than set prices.
supported; users also pay for storage capacity based on consumption
volumes. This model gives MSPs and their customers greater cost
predictability.
MSPs have choices when it comes to pricing and selling Acronis Cyber Protect
Cloud. Under the “sell to” model, Acronis’ pricing is the cost to the MSP,
not the customer. MSPs have the latitude to establish pricing for whatever
their respective markets and customers can support (within regulatory
parameters).
The general rule of thumb of doubling the cost of service applies to Acronis
Cyber Protect Cloud. MSPs can provide a full array of security and data
Features
Acronis Cyber Protect Cloud
Standard Advanced
Disaster
Recovery
All features in Acronis Cyber Backup Cloud Standard edition, including:
• Vulnerability assessments
NEW
• Basic auto-discovery remote agent instalation
NEW
Advanced anti-malware security management features, including:
• Patch management
• Anti-malware protection (including anti-virus, anti-ransomware,
anti-cryptojacking)
• URL filtering
• Continuous data protection
• Anti-malware scanning of backup
• Safe recovery
• Smart protection plans
• Windows Defender Antivirus and Microsoft Security Essentials management
• Drive health monitoring
• Remote desktop
• Forensic data backup
• Data protection map
All features in Acronis Cyber Backup Cloud Advanced edition, including:
• Scalable group management of devices and backup plans
• Support for advanced workloads like SAP HANA and Oracle Database
• Advanced auto-discovery and remote agent installation
NEW
All features in Acronis Cyber Disaster Recovery Cloud, including:
• Failover to the Acronis cloud recovery site
• Disaster recovery orchestration with runbooks
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protection features and functions, knowing the total cost to their business.
In this pricing scenario, doubling the cost to set a street price is relatively
in packaging, though, which makes street pricing a little tricky.
MSPs can sell Acronis Cyber Protect Cloud multiple ways and in multiple
combinations. The two primary ways to package Acronis Cyber Protect
Cloud are:
• Holistic: The customer must buy the total package with all services turned
on at a price established by the MSP.
• Select: The customer buys select services at a reduced price that
the MSP sets
To calculate an appropriate street price, MSPs should consider
the following.
Cost of goods and services (COGS)
Service-level targets/agreements
Service sta
Sales and commissions
General administration
The amount of the underlying service cost paid to
Acronis
The quality of service provided to customers and
the resources to deliver such service levels
members who deliver services
The cost of sales salaries, commissions, and
business expenses
The cost of running the business and
administrative activities apportioned to the
services delivered
According to 2112’s research, MSPs typically have 30% to 40% gross margins
(earnings after costs but before taxes and other fees). MSPs should apportion
the total cost of ownership to the service cost to arrive at an appropriate
base price for individual services. In other words, they should ensure that
each service package includes the cost of doing business plus a margin for
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When setting service prices, MSPs should consider three levels at which
they’re willing to sell a product.
• Street price: The generally marketed price of any product or service. Many
people will recognize a street price as MSRP (manufacturer suggested retail
price). It’s the sticker price without discounts or other considerations. Street
prices are often 200% to 250% cost.
• Floor price: The minimum acceptable sale price for a product or service.
In this context, MSPs should figure out what their minimum price for selling
a product is by determining cost and then applying a minimum profit
margin. Floor prices establish a boundary for negotiation with customers in
competitive engagements. Crossing the floor price tells MSPs whether the
engagement is worth the lower profitability. In many cases, a floor price is
cost plus a 125% to 150% margin; in some cases, MSPs may take the floor
price to zero to win competitive deals.
• Strike price: The target price for most sales engagements. By establishing
a strike price, MSPs can provide salespeople guidance and latitude for
negotiating prices that will typically fall between the strike and street prices.
Strike prices carry margins of approximately 150% to 200% above cost.
100% to 150%
of Base Cost
Losing
Money
200% to 250%
of Base Cost
Highly
Protable
150% to 200%
of Base Cost
Adequate
Protability
100%to 150%
of Base Cost
Covers
Costs
STREET
STRIKE
FLOOR
COST
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MSPs should apply a premium pricing strategy to accounts that don’t want all
the included services. This means charging more for the fewer applications
used. Such a pricing strategy will give customers an incentive to use all of the
Acronis features and migrate from their existing applications.
This premium pricing strategy doesn’t apply when a customer opts for
customer wants a Standard package for the marketing department but
(before discounts) should apply. They would simply have to create two tenants
to do this.
As with all pricing strategies and approaches, the actual price framework for
services should take into consideration local market and economic conditions,
ability to pay. Pricing strategies for Acronis Cyber Protect Cloud should cover
reach of the target customer.
A complicating factor for Acronis Cyber Protect Cloud is the ability to turn o
services. This feature is useful to MSPs that have existing services by other
providers, but still want to use pieces of the Acronis platform or work with Acronis
until the contract expires. However, MSPs pay Acronis for the totality of the
package, meaning the price doesn’t change if certain services get turned o. MSPs
must account for that in their pricing, as customers may expect variable pricing.
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Going to Market Eectively
and Profitably
Security is an omnipresent issue for all businesses. No business
can aord to operate without applying appropriate levels of
protection to its data and infrastructure. The reality, though, is that
most businesses can’t aord to build and maintain security for
their data and infrastructure. The best solution is eective and
scalable managed security services. That’s where Acronis Cyber
Protect Cloud comes in.
Acronis Cyber Protect Cloud provides solution providers and managed service
providers with a holistic platform that allows them to apply greatly improved
the integrated and centrally managed Acronis platform, MSPs and MSSPs
won’t spend time and money on training and managing disparate tools and
them greater leverage in taking products to market.
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Managed security services are in high demand because businesses know
they can’t secure their data and infrastructures independently. They need the
assistance and ongoing support of trusted, expert providers that use market-
leading tools to meet current and future security needs. Through the process
of discovery, calculation, and strategy, MSPs can leverage the powerful,
When planning to take Acronis Cyber Protect Cloud to market,
solution providers should employ a few useful strategies
before setting prices.
1. Dene the target customer:
needs and spending power.
2. Calculate the TAM: Every company and product have a TAM, which is the total value
can calculate sales and market share goals, as well as determine relative value to the
segment.
3. Understand competition and competitive pricing: When calculating TAMs,
MSPs should also identify the competition and their pricing models for comparable
products and services. MSPs should approach this exercise with the intent of
undercutting competitor pricing. The goal is to avoid looking too pricey or low-value
and thus becoming an outlier in the market.
4. Determine the value of services delivered: Calculating the relative cost of building
real value of what they’re getting from a managed service.
5. Figure the total cost of service: As noted earlier, MSPs must understand the total
cost of their goods and services, inclusive of overhead expenses. Calculating total
costs per unit will establish the foundation on which MSPs can determine the fair
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Additional Resources About Acronis
• Acronis Cyber Protect on the
Partner Portal
• IDC White Paper: Addressing
CyberProtection and Data
ProtectionHolistically
• White Paper: The Five Levels
of Integration
Acronis leads the world in cyber protection - solving safety, accessibility,
privacy, authenticity, and security (SAPAS) challenges with innovative backup,
security, disaster recovery, and .
Enhanced by AI technologies and blockchain-based authentication, Acronis
solutions protect all data in any environment: physical, virtual, cloud, mobile
workloads, and applications.
With 500,000 business customers, and a powerful worldwide community of
Acronis API-enabled service providers, resellers and ISV partners, Acronis
is trusted by 100% of Fortune 1000 companies and has over 5 million
customers. With dual headquarters in Switzerland and Singapore, Acronis is a
150 countries. Learn more at acronis.com.
The Five Levels
of MSP Platform
Integration
WHITEPAPER
How MSPs can efficiently leverage integrated cyber
protection services to make money and grow by
protecting customer systems, applications and data
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The 2112 Group is a business strategy and research firm focused
on improving the performance of companies’ direct and indirect
channels through a portfolio of market-leading products and
services.
The 2112 Group leverages proprietary intelligence with qualitative research,
market analysis, tools, and enablement programs. Industry experts approach
each engagement by applying innovative solutions customized to meet the
needs of clients. By looking at the technology market from the viewpoint of
vendors, partners, and end users, The 2112 Group is uniquely positioned to
About The 2112 Group
Learn more at www.acronis.com
are reserved; errors are excepted. 2020-05
