While the cloud backup and disaster recovery (cloud BDR) market continues to grow, channel partners need to keep this long-term question in mind: Do you (and your cloud BDR provider) know how to dance among the elephants in the room -- namely Amazon Web Services (AWS) and Microsoft Windows Azure? Here's why I ask.

At least four cloud BDR market segments are set to converge and compete. They include:

  1. Cloud-agnostic BDR and management providers: One prime example is RightScale, which offers disaster recovery and cloud management tools for Amazon, Azure, Google Cloud, HP Cloud, Rackspace and more. RightScale also support private cloud platforms like CloudStack and OpenStack. Other examples include Cloudberry Lab and Veeam, each of which can back up on-premises data to multiple third-party clouds.
  2. Consumer Services Embracing the SMB Channel: Examples include Carbonite and Mozy (owned by EMC), each of which increasingly work through resellers and VARs, with a growing MSP (managed services provider) focus taking shape now. Also, both Carbonite and Mozy have their own clouds.
  3. MSP-centric Cloud BDR Services: Names like Axcient, Datto and Intronis often come to mind. A few companies are pure channel and don't really sell direct.
  4. Vendor-centric Cloud BDR Services: An example here is Microsoft SQL Server Backup to Windows Azure.

Within each of those segments, many companies are in growth mode. And channel partners in the market appear to be thriving. In fact, IT service providers that promote cloud services (including BDR) are growing at more than twice the industry rate, according to new research from Intronis, Business Solutions and The 2112 Group.

For VARs and MSPs that have yet to enter the market it's time to get going.

The Big Squeeze

Over time, the lines between those four segments will blur or disappear completely. The big question: Can small, nimble cloud BDR upstarts innovate faster than the big cloud providers -- and the companies (i.e., RightScale) that plug into the big cloud providers?

Think of the math this way:

  • MSP-centric Cloud BDR Services: Many companies in this market are growing rapidly. But if you combine the annual revenues of Axcient, Intronis and Datto -- just an example -- I suspect the sum would be under $200 million.
  • Amazon Web Services: Pundits think AWS will generate about $1 billion in cloud revenue this quarter -- putting the annual run rate at $4 billion. Admittedly, only a fraction of that involves Amazon Simple Storage Service (S3). S3 is not a turnkey disaster recovery solution. But some MSPs are finding ways to adapt. For instance, Corsica Technologies uses N-able's software to manage CA ARCserve backups in Amazon's cloud.

The examples above show multiple Davids will ultimately need to face Goliath. And even beyond the first Goliath (Amazon), you must also keep an eye on Microsoft's Azure cloud, which is adding 1,000 customers per day.

The good news for the channel: Many of the cloud BDR upstarts are fiercely loyal to MSPs and VARs -- offering co-branding or white label services, price and billing control, marketing and sales materials designed entirely for partners. VARs and MSPs, in turn, should reward those suppliers with their loyalty.

But external pricing pressures can't be ignored. Amazon has cut AWS prices at least 37 times since launching the cloud service in 2006. Plus, Amazon is now reaching out to MSPs. With that reality in mind, I suspect customers and channel partners will increasingly demand cloud flexibility -- the option to move data from one public cloud to another, based on ever-evolving SLAs, pricing and more.

Sizing Up the Situation

Bottom line: The cloud BDR market is big and getting bigger. Plenty of scrappy cloud BDR upstarts are in the market supporting VARs and MSPs. Just make sure your cloud BDR provider knows how to dance among the elephants -- because the elephants are getting pretty darn big.