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Asigra, never shy about trying new licensing models, has added an unlimited pricing structure for its data protection software.
Asigra sells its backup software mostly through managed service providers (MSPs). This month it added an Unlimited Use Subscription License.
Under the new model, Asigra backup customers pay a fixed rate based on usage from the previous year plus an increase based on estimated growth. Asigra and the customer will negotiate the growth cost upfront. The costs over the life of the contract will not change, even if the customer's usage goes above its projection.
Metrics used to determine usage include capacity, virtual machines, physical machines, sockets and users.
"Asigra tends to be first in a lot of these licensings -- they were the first to license by capacity [in 1992]," said Marc Staimer, president of Dragon Slayer Consulting. "This is the first all-you-can-eat license based on a commitment of growth and the length of the contract."
Other licensing options remain
Asigra added a Recovery License Model in 2013, charging customers according to the amount of data they recover rather than the amount they back up. Asigra still offers capacity and recovery license models, although Asigra executive vice president Eran Farajun said he expects most customers to use the new unlimited model over time.
Staimer said Asigra is the first vendor he knows of to adopt unlimited use licensing, but he expects others to introduce similar pricing models.
The new licensing model should most benefit MSPs who can reliably grow their usage as they add customers. It's also easier for these organizations to budget for a license when it's a fixed cost.
But not every Asigra backup customer is a service provider or can reliably grow its usage.
"You as a service provider have to be fairly confident that you're going to be consuming a lot more," Farajun said.
Not recommended for everyone
Staimer said the unlimited licensing is an excellent way to license Asigra backup software for backup as a service (BaaS) or disaster recovery as a service (DRaaS) providers. However, not every type of MSP will want to switch over to this pricing model, as it puts pressure on the organization to maintain growth.
Marc Staimerpresident, Dragon Slayer Consulting
"If BaaS or DRaaS is a primary business for you, it makes perfect sense," Staimer said. "It's going to grow all the time because everybody's data grows at a certain rate no matter what. But if you're a service provider that sells primarily [colocation], infrastructure as a service or [software as a service], it's probably a tougher play. You're probably not willing to commit to a specific growth target."
Staimer said it's important for an organization to understand its growth pattern to avoid biting off more than it can chew. High customer turnover or a decline in sales will result in the provider overpaying for an unlimited license.
But for those who do have a good handle on their growth and strong stomachs, the all-you-can-eat model has a smorgasbord of benefits. Staimer said this model allows for accurate, stable budgeting thanks to its prix fixe arrangement, and directly leads to cost savings if an organization overshoots its projected usage.
"This gives them a certainty of cost. And when you have a certainty of cost, it means you can make great profits if you can grow more than your commitment," Staimer said.
When an Asigra backup customer saves money using this new pricing model, the vendor will lose money in the short term. However, Staimer sees this as a long-term play on Asigra's part, satisfying customers with savings now and enticing them to extend their contracts or even commit to longer ones.
"They're gambling that they will make their customers so happy that they won't change to another software provider down the road," Staimer said. "The retention rate for them is higher; therefore, they make more money in the long run."