In this article

Why do MSPs need SaaS backup?
SaaS backup challenges for MSPs
Turning data protection challenge into an opportunity

Why MSPs Should Back up Customers’ SaaS Data

14 Dec 2024

3 min read

Anju George

Blog Articles

Article at a glance

• SaaS data loss is inevitable: Accidental deletions, sync errors, version history limits, and cyber threats like ransomware can result in permanent data loss.

• Limited recovery options: SaaS providers like Google and Microsoft offer basic recovery tools, but these are time-bound, temporary, and don’t guarantee full recovery of lost files or overwritten data.

• Compliance and costs: Regulations like GDPR and HIPAA mandate data recoverability. Without proper backups, data loss can lead to hefty fines and downtime costs — the average cost of a data breach reached $4.88 million in 2024.

What is the solution?

SysCloud provides automated SaaS backups, enabling MSPs to ensure data protection, quick recovery, and compliance. Partnering with SysCloud helps MSPs safeguard client data while driving recurring revenue growth.

The SaaS (Software as a Service) market is expanding rapidly, with more businesses than ever relying on cloud-based apps for day-to-day operations. But with this growth comes an increase in risk. Today, 82% of data breaches involve data stored in the cloud, and the average cost of a data breach reached a record $4.88 million in 2024.

Despite this, most SaaS providers make it clear that they aren't responsible for backing up customer data.

This puts the onus on businesses—and, by extension, Managed Service Providers (MSPs)—to ensure business-critical SaaS applications are regularly backed up. Without a reliable backup strategy, businesses risk losing access to essential files, client data, and operational records when disaster strikes.

This article addresses three key questions:

Why do MSPs need SaaS backup?
What are the data protection challenges for SaaS applications?
How can MSPs turn these challenges into opportunities?

Why do MSPs need SaaS backup?

Here are six compelling reasons why MSPs need a cloud backup solution for their customers.

1. Protect your customers from SaaS data loss

Data loss in SaaS applications is inevitable due to accidental deletions, sync errors, version history limits, and threats like ransomware and phishing attacks.

SaaS providers like Google Drive and OneDrive have default version limits (which admins can customize), automatically deleting older versions once the limit is reached. Additionally, sync conflicts can overwrite critical file changes, while ransomware attacks encrypt files, often replacing clean versions with encrypted ones.

53% of organizations experienced data loss in SaaS applications over the past year, yet more than half of these organizations have not implemented measures to protect that data.

ESG survey

These incidents are hard to prevent, and without a cloud backup solution in place, it would be impossible to recover your customers’ valuable data. Native recovery methods are tedious and time-bound, so much so that most SaaS platforms themselves recommend using third-party cloud-backup solutions to back up your data.

2. Ensure regulatory compliance

Compliance with state, federal, and international laws and industry-based regulations is essential to eliminating risks and protecting consumers.

A cloud backup solution with compliance data insights can help fulfill legal and litigation requirements.

Compliance laws like GDPR, HIPAA, FINRA, CCPA, and SOX mandate that data protection is a shared responsibility and expect you to have "the ability to restore the availability and access to personal data in a timely manner in the event of a physical or technical incident."

Given the potential consequences of non-compliance such as fines, lawsuits, revenue losses, or losing hard-earned trust, meeting compliance is an organization's duty.

3. Minimize your customers’ data loss costs

SaaS backup solutions for MSPs can help minimize the impact and cost of data breaches on their customers. Even the shortest of downtimes can severely impact your customers’ businesses. The longer it takes to recover from a data loss, the more it will cost you and your customers.

Having a proper cloud backup solution in place can minimize your customer’s Recovery Point Objective (RPO) and Recovery Time Objective (RTO), thus ensuring faster disaster recovery. An optimal RPO and RTO will mitigate the monetary impact and business downtime consequences of data loss, while facilitating business continuity.

The global average cost of a data breach reached $4.88 million in 2024, marking a 10% increase from the previous year and setting a new record high.

Cost of a Data Breach Report 2024, IBM

4. Data protection can be a differentiator for MSPs

While offering data protection capabilities along with other services is a clear revenue opportunity, it has also become one of the most important MSP differentiators, as clients tend to favor and migrate to MSPs offering them complete data protection.

Offering a cloud backup solution that provides automated backup, ransomware protection, and point-in-time restore completes your MSP suite and differentiates you from the rest of the market. Providing a data protection safety net for your customers’ SaaS data can be one of your Unique Selling Propositions (USP).

Back up SaaS data or risk losing customers, partners, and employees.

Forrester

5. SaaS providers aren’t responsible for customer data (Shared responsibility model)

Many clients assume SaaS providers like Google and Microsoft protect their data — but that’s not the case. The truth is, they’re only responsible for the platform’s uptime and availability — not the data itself.

Under the shared responsibility model, data protection falls on the customer. While SaaS platforms offer basic recovery options, they’re often limited, temporary, and don’t guarantee full recovery of lost or overwritten files.

For MSPs, this presents an opportunity to educate clients and offer comprehensive backup solutions that ensure critical files are always recoverable.

6. Boost your revenue

SaaS backup isn’t just a service — it’s a revenue growth engine for MSPs. By offering regular backup subscriptions, you create a steady stream of monthly recurring revenue (MRR) while providing essential protection for your clients’ critical business data.

The surge in remote work, phishing scams, and accelerated digital transformation has made SaaS data protection a top priority for businesses.

By including SaaS backup in your MSP suite, you don’t just protect client data — you strengthen client relationships, boost retention, and drive new revenue growth. Don’t miss out on your share of the growing SaaS backup market.

SaaS backup challenges for MSPs

1. Limited SaaS backup coverage

Most SaaS backup vendors back up a limited number of SaaS applications. There is no unified solution to manage backup for diverse SaaS applications, making SaaS backup complex and expensive. Having a single pane of glass to manage all SaaS applications will save time and effort.

SysCloud backs up most SaaS applications compared to any other backup vendor. SysCloud backs up Google Workspace, Microsoft 365, Slack, HubSpot, Salesforce, QuickBooks Online, Google Classroom, Box, and Xero — with plans to add support for dozens of other SaaS applications (including Zendesk and Shopify) in the coming months.

2. Cybersecurity threats

Ransomware and phishing attacks targeting SMBs and enterprises are on the rise. Third-party cloud backup applications that offer out-of-the-box ransomware and phishing threat detections will help administrators and MSPs quickly recover from security threats and malicious attacks.

Learn more about SysCloud’s backup data insights feature.

3. Expensive

Very few vendors have the capability to back up multiple SaaS applications from a single platform, but their services are restricted to enterprise customers and are not available for small-to-medium-businesses (SMBs). Even if they are open to non-enterprise customers, their service costs are too high for SMBs.

Thus, small and mid-sized companies have limited options when it comes to unified SaaS backup on the cloud.

Turning data protection challenge into an opportunity

Partner with SysCloud backup to secure your customers’ SaaS data while increasing revenue.

Assume an MSP implements the SysCloud Microsoft 365 backup for 500 users. This translates into a yearly billable amount of $19,000 per the list price. If the MSP also backs up Salesforce, HubSpot, Quickbooks Online, and Slack, the topline increases by 230%. Managing backup for all critical clouds using a single pane of glass removes complexity and offers MSPs a faster path to ramping up revenues.