‘Backups Are Dead,’ CEO Of Backup Vendor Axcient Says

‘As a backup vendor, I’ll tell you, backups are dead. If you only do backups, you will be out of business,’ says Axcient CEO David Bennett.

For solution providers, data protection is a part of their everyday business, despite the fact that no one likes dealing with data backups and the fact that backups fail.

That’s the message from David Bennett, CEO of Axcient, a Denver-based data protection technology developer for which backups are a core part of its business.

Bennett, speaking this week to MSPs at CRN parent The Channel Company’s XChange 2022 event in Texas, said backups fail regardless of what industry MSPs work in.

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“Constant security threats, lack of technical talent, hybrid workforces, tech stack complexity, and multiple different vendors with different licensing, things like that,” he said. “It’s hard being in my seat. Imagine being in your seat and dealing with all of these things day to day. That’s really, really tough.”

MSPs all know security threats are huge, Bennett said. Different reports state that about 85 percent of MSPs report that their SMB customers have been subject to ransomware attacks, and that’s just the companies that report it, he said. About 15 percent of people who have been successfully phished will get phished again within a year.

“And then the scary thing is, 70 percent of SMBs will go out of business if they have a large data loss incident,” he said. “We as businesses, and the SMBs, are the target now. [But] consumers are going to be the real target for ransomware attacks, and [attackers] are going to use attacks as a way into your business and your end-customers as well.”

So why is the guy from a backup company coming on-stage to say backups fail, Bennett asked. Because in reality they do, he said. About 37 percent of backup jobs will be unavailable, while 34 percent of restore jobs will be unavailable, he said, citing information from the Veeam 2021 Data Protection Report.

“That’s a pretty sucky kind environment to work in,” he said. “And it doesn’t matter the vendor you’re working with, that’s a pretty horrific kind of statistic.”

MSPs have to deal with that day in and day out, Bennett said.

“As a backup vendor, I’ll tell you, backups are dead,” he said. “If you only do backups, you will be out of business.”

Bennett estimated about 50 percent of MSPs have cyber insurance for their customers. However, he said, one of Axcient‘s large partners who had cyber insurance when a customer was hacked was told by the insurance company that it was not allowed to restore data, despite having a good copy that data ready to be restored.

And as an MSP or as an IT provider, in that kind of situation, it‘s not just the partner that is affected, Bennett said.

“It might be every one of your end clients,” he said. “Imagine having every one of your end clients calling you and saying, ‘Why the hell can’t I get my business up and running?‘ And your answer is, ’I‘m sorry, it’s going to be some time before you can recover from the backup.‘ I don’t want to have that kind of conversation with my customers. I‘m sure you don’t. But that‘s the reality. Because what happens is, the cyber insurance comes in and says, ’Hey, I want to do a technical analysis of what went on. I want to understand the risk.‘ These are risk guys. They don’t want to deal with backups. They go through all of this, and spend all their time and effort because they want to analyze what happened.”

This, Bennett said, is why Axcient says backups are dead.

“It’s because you are not offering business continuity or have the ability to virtualize your clients instantly and have them up and running while in the background the cyber insurance company can do the forensic analysis,” he said. “And then you can choose to restore to a particular restore point and things like that. It‘s going to be super important, because otherwise you are going to be out of business as an MSP.”

The average recovery time from a cyber attack is 21 days, Bennett said, citing the Sophos State of Ransomware 2021 report.

“Imagine if your business is down for 21 days, and you couldn‘t do business with anyone else or you couldn’t pay your employees,” he said. “And 60 percent of everyone in North America lives paycheck to paycheck. That‘s a pretty crappy situation to be in.”

So MSPs need to realize that backup is deal and instead have to think about business continuity, Bennett said.

“You also have to think about simplifying the tech stack,” he said. “You have to think about how to simplify the services. Whether we like it or not, Azure, public clouds, things like that are going to eat the world. And then you have to simplify your economics as well. How you make it easy to do business with you. And if it‘s not profitable, why the hell are you doing it? Yeah, we want to make friends. But you’re in business to save your end clients and for you to make money.”

Research done by Axcient shows that 70 percent of MSPs use more than three technology providers for their backup and recovery services. One of Axcient‘s partners was actually using 25 different services, Bennett said. That happened as the partner acquired clients from other MSPs, and took over the licensing models of multiple tech stacks from multiple vendors, he said.

That partner, working with Axcient, solidified its tech stack with the Axcient portfolio and technology from four other vendors, and saw a 50-percent reduction in support tickets and a 30-percent reduction employee on-boarding, he said.

Doing business with backup vendors can be complex, Bennett said. Some require payment up-front for a contract, or charge for the capacity, he said.

“We give you unlimited storage capacity,” he said. “We won‘t charge you for retention period. As long as you subscribe with us, we’ll keep it forever. So one subscription price, flat fee, super easy. And then with our Direct-to-Cloud technology, you don‘t need local large appliances.”

Axcient says backup is dead is because it delivers full business-class business continuity for the price of backup without restrictive contracts or covenants, Bennett said. The company provides endpoint backups, full-service business continuity and disaster recovery, and appliances for companies which require them for compliance, he said.

Bennett was trying to communicate is that the traditional way of thinking about backup is dead, said Luis Alvarez, president of Alvarez Technology Group, a Salinas, Calif.-based solution provider which has partnered with Axcient for 13 or 14 years and sits on the vendor‘s partner advisory council.

“And you have to really be more cognizant of the importance of all the elements of backing up,” Alvarez told CRN. “A lot of people, and not just competitors of Axcient, but a lot of people who do backups don‘t take the time to check backups. And when they are forced to try to restore, they discover that the data is corrupt or they can’t restore. I talk to a lot of my peers, and their biggest fear is having to restore because they‘re like, ’God, I hope I never have to restore from backup ‘cuz who knows?‘

The reality is that that MSPs need to be comfortable and confident that the systems that they‘re backing up can be restored and people can get back up and running, and that they have technology able to defeat modern threats , Alvarez said.

“Because too many times, we get called in by somebody who got hit by ransomware, for example, and the first thing the bad guys do now is they look for your backups and they corrupt them,” he said. “They encrypt them first. Then they target you. Now they know that you can‘t restore.”

One of the more innovative things that Axcient introduced was its air gap technology which ensures an immutable copy of the data is available even if the local backup appliance is corrupted, Alvarez said.

“I like it because it‘s an additional level of protection against us doing something boneheaded,” he said. “We’ve been partners for a long time, and we believe in Axcient‘s product stack. It is easy to use. It is easy to be a partner. We’re making way more money today than we were 10 years ago on it.”